Is Google Review Management Illegal? Explaining the Relationship with the Fair Trade Display Act and Its Penalties
Reviews and ratings posted on platforms like Google Maps are a vital source of information for consumers. Nowadays, it’s becoming commonplace to choose businesses based on online reviews. It’s no exaggeration to say that for business owners and companies, “reviews” are the lifeline of their business.
Consequently, some companies turn to review management services to boost their online ratings and attract more customers.
However, hastily gathering reviews through illegal review services can lead to violations of laws and guidelines set by Google. In the worst-case scenario, this could result in the suspension of your account.
This article will explain the circumstances under which using a review management service becomes illegal, to help you avoid such risks.
Four Types of Review Management Services
Review management services refer to the practice of posting reviews on behalf of store owners or product vendors for specific stores or products.
The main services provided by review management are as follows:
High-Rating Review Posting Service
When you think of review management, the first service that comes to mind is review posting. To convey the appeal of products or services, the agency posts positive reviews on behalf of customers.
In today’s world, where review ratings are crucial to consumers, strategies to improve ratings are effective as part of a company’s marketing strategy.
SEO Measures
For businesses, the ranking of search results when consumers search is extremely important.
Some review management agencies offer services aimed at improving search engine rankings by posting reviews with a focus on keywords, thereby enhancing the company’s visibility in search results. These services are provided by specialists in SEO (Search Engine Optimization), which aims to optimize for search engines.
Reputation Management
For companies, low-rating reviews can be more concerning than high-rating ones. Not only do low-rating reviews stand out, but they can also give a negative impression to consumers who see them.
Therefore, when low-rating reviews become prominent, strategies to increase high-rating reviews are implemented to bury the negative feedback.
Targeted Review Posting
Targeted review posting involves creating reviews specifically tailored to a certain target demographic, addressing their needs and interests.
Instead of simply praising a product or service, the content is crafted with expressions that resonate with the target audience and address challenges they are likely facing. By incorporating specific episodes that the target audience can relate to and emphasizing benefits, the product or service can seem more suitable for them, potentially leading to a highly effective promotional impact.
Is Proxy Review Management Illegal Under Japanese Law?
Up to this point, we have introduced the specifics of proxy review management services. You might wonder if all attempts to boost ratings through these services are illegal. Are they?
To answer succinctly, the act of proxy review management does not necessarily violate the law.
However, when agents who are not actual users perform review management alone (commonly known as “shills”), it constitutes false review postings and therefore violates the policies set by Google.
What Constitutes Prohibited Fake Reviews on Google Under Japanese Law
Google prohibits the use of review services to post fake reviews or spam activities, which it defines as “false engagement,” in order to prevent fraudulent rating manipulation. This includes reviews not based on actual experiences and posts to the same establishment using multiple accounts.
The following types of content are considered false engagement:
- Content that is not based on actual experience and does not accurately represent the target location or product.
- Content posted as a result of incentives provided by a company (such as monetary compensation, discounts, free products or services), including content posted in response to requests to modify or remove negative reviews in exchange for incentives.
- Content posted from multiple accounts to manipulate the ratings of a location.
- Content posted to disrupt or confuse normal operations by using emulators, other device tampering services, modified operating systems, or other means to mimic actual engagement or manipulate sensor data or analysis results.
Additionally, it is prohibited for sellers to engage in the following actions:
- Soliciting or encouraging the posting of content not based on actual experience.
- Offering incentives (such as monetary compensation, discounts, free products or services) in exchange for posting reviews or modifying or removing negative reviews.
- Preventing or prohibiting the posting of negative customer reviews, or selectively soliciting positive reviews.
- Posting content that damages the reputation of a competitor’s store or location.
Risks of Violating Policies
Google utilizes advanced automated detection systems to monitor these fraudulent activities, and if a violation is detected, not only may the review be automatically deleted and hidden, but the account that posted it could also be suspended.
Furthermore, there is a risk that your search ranking may drop due to a Map Search Engine Optimization (MEO) penalty.
In the worst-case scenario, your Google Business Profile account for your store or service could be subject to suspension.
Such penalties can have a significant impact on a business’s online reputation and credibility, and once lost, trust can be extremely difficult to regain. Therefore, as an operator of a store or service, it is crucial to provide honest and sincere services while adhering to the guidelines.
Reference: Google Maps | Prohibited and Restricted Content
When Paid Reviews Constitute a Violation of the Japanese Fair Trade Display Law
While we have previously discussed cases where paid reviews violate Google’s policies, there are also instances where such activities become illegal under Japanese law. Specifically, this occurs when they violate the Japanese Fair Trade Display Law (Act against Unjustifiable Premiums and Misleading Representations).
Word-of-Mouth Marketing and the Japanese Premiums and Representations Act
The purpose of the Japanese Premiums and Representations Act is to protect the interests of general consumers by regulating “false representations” and the provision of “excessive premiums” that could prevent consumers from making voluntary and rational choices regarding products and services.
The following two practices are prohibited under the Japanese Premiums and Representations Act:
- Restrictions and prohibition of excessive premium offerings
- Prohibition of unfair representations in advertising, etc.
Word-of-mouth marketing becomes illegal when it relates to the regulation of “unfair representations.”
(Prohibition of Unfair Representations)
Article 5: Business operators must not make any of the following representations in transactions of goods or services they supply:
1. Representations about the quality, standards, or other aspects of goods or services that significantly mislead the general consumer into believing they are superior to the actual goods or services, or that they are significantly superior to those supplied by other business operators offering similar goods or services, and which are likely to unjustly attract customers and hinder the voluntary and rational choice of general consumers.
2. Representations about the price or other transaction conditions of goods or services that mislead the general consumer into believing they are significantly more favorable than the actual conditions or those offered by other business operators supplying similar goods or services, and which are likely to unjustly attract customers and hinder the voluntary and rational choice of general consumers.
3. In addition to the representations listed in the preceding two items, any representations regarding the transaction of goods or services that are likely to mislead the general consumer and are designated by the Prime Minister as likely to unjustly attract customers and hinder the voluntary and rational choice of general consumers.
Japanese Premiums and Representations Act
The Applicability of ‘Misleading Representation’ in Paid Review Practices Under Japanese Law
‘Representation’ refers to advertising or displays aimed at consumers, including information about the quality, standards, or price of products or services. Reviews written by consumers themselves do not typically fall under the ‘representation’ defined by the Japanese Premiums and Representations Act, as they are not considered a form of advertising.
However, when a business that provides goods or services posts reviews on review sites as a means of attracting customers, or when it commissions a third party to do so, this principle does not apply. Such actions may constitute ‘misleading representation’ under the Premiums and Representations Act. There are three types of misleading representations, which we will explain individually.
1: Superiority Misrepresentation
Superiority misrepresentation includes the following cases:
- Representations that suggest the product or service is significantly superior to the actual one
- Representations that falsely suggest the product or service is significantly superior to those offered by competing businesses
Paid reviews that falsely represent a product or service as superior to the actual one, or as superior to a similar product sold by another company, violate the Premiums and Representations Act as superiority misrepresentation.
For example, posting reviews for a beauty salon or spa that claim “guaranteed to lose ⚪︎ kilos” could be considered illegal as a violation of superiority misrepresentation.
2: Advantage Misrepresentation
Advantage misrepresentation includes the following cases:
- Representations that mislead the general consumer into believing the transaction is significantly more advantageous than it actually is
- Representations that mislead the general consumer into believing the transaction is significantly more advantageous than those involving competing businesses
For instance, posting reviews that claim “a special price of 〇〇 yen available only now” or falsely stating “it was the lowest price” could be considered advantage misrepresentation.
3: Potential Violation of Stealth Marketing Regulations
Stealth marketing (stealth marketing) refers to advertising that is disguised as non-advertising content, where celebrities or influencers pretend to be neutral third parties to promote or introduce products or services, or where advertisers pay agents to post favorable reviews or comments while pretending to be ordinary consumers.
Starting from October of Reiwa 5 (2023), stealth marketing regulations have imposed an obligation to clearly indicate ‘advertising’. In the context of paid review practices, violating these regulations can result in penalties, necessitating caution.
Related article: Mandatory ‘Advertising’ Disclosure from October Reiwa 5 (2023). Explaining the Operational Standards for Stealth Marketing Regulations
The Risks of Soliciting Illegal Reviews Under Japanese Law
The Consumer Affairs Agency in Japan takes various actions to protect consumer rights and ensure fairness in the marketplace when there is suspicion of a violation of the Act against Unjustifiable Premiums and Misleading Representations. If unfair representations or excessive premiums are suspected, investigations and measures are implemented to resolve the issue.
Investigations and Measures by the Japan Consumer Affairs Agency
When there is suspicion of a violation of the Japanese Premiums and Representations Act, the Japan Consumer Affairs Agency first scrutinizes the problematic advertisements and promotional materials and collects related documents. It also conducts hearings with the businesses involved to ascertain the intent and background of the actions.
During this process, businesses are guaranteed an opportunity to present their defense.
If the investigation concludes that a violation has occurred, the Japan Consumer Affairs Agency will take the following actions against the business:
Corrective Orders Under Japanese Consumer Protection Law
To eliminate misunderstandings caused by false advertising among the general public, specific corrective actions are mandated.
These typically include:
- Notifying the general public of the misconception
- Developing measures to prevent recurrence
- Ensuring that similar violations will not occur in the future
Furthermore, the names of businesses that commissioned the advertisements are published on the websites of the Consumer Affairs Agency and prefectural governments in Japan. This publication alone does not constitute ‘notifying the general public of the misconception,’ so businesses may be ordered to publish an acknowledgment of their false advertising under the Act against Unjustifiable Premiums and Misleading Representations in daily newspapers to ensure thorough awareness.
In addition, violating a corrective order can result in imprisonment for up to two years or a fine of up to 3 million yen.
Businesses may also face fines of up to 300 million yen, and their corporate representatives can be fined up to 3 million yen as well.
Administrative Surcharge Payment Orders Under Japanese Law
The Consumer Affairs Agency in Japan may issue an order for the payment of an administrative surcharge to businesses that have engaged in unfair representations, excluding the provision of excessive premiums as per Article 5, Paragraph 3 of the Premiums and Representations Act, provided other requirements are met.
An administrative surcharge is a type of administrative penalty, which does not result in a criminal record but can decrease a company’s value due to its public disclosure.
The amount of the administrative surcharge is intended to recoup profits gained from unfair practices and is set at 3% of the sales revenue generated during the period of the unfair representation. Consequently, the higher the company’s sales, the larger the surcharge can be.
Introduction of Assurance Procedures
Even in cases where there is suspicion of violations of Article 4 (Misleading Representations) or Article 5 (Unjust Provision of Prizes) of the Japanese Premiums and Representations Act, businesses may demonstrate a willingness to voluntarily resolve the issues. In such instances, the Consumer Affairs Agency of Japan will seek rehabilitation of the following matters through “assurance procedures”:
- Correction of the violating actions
- Concrete measures to prevent recurrence
Reference: What happens if you violate the Premiums and Representations Act? (Consumer Affairs Agency)
Penalties Based on Consumer Information
Furthermore, if consumers purchase products or use services based on reviews generated by review manipulation, which violates the Japanese Premiums and Representations Act, they may consult with the Consumer Affairs Agency, potentially leading to administrative penalties.
In addition to the possibility of being sued for damages due to false advertising, if there is evidence of an intent to actively deceive, it could be recognized as fraud under the Japanese Penal Code, exposing the perpetrator to criminal penalties.
Violation of the Unfair Competition Prevention Act in Japan
Furthermore, if a business utilizes review management services to manipulate rankings, such actions may constitute deceptive conduct regarding quality, potentially violating Article 2, Paragraph 1, Item 20 of the Japanese Unfair Competition Prevention Act, and could lead to claims for damages.
In fact, a ruling by the Osaka District Court on April 11, 2019 (Heisei 31) (2019), recognized that an exterior remodeling company manipulated rankings on a review site for SEO purposes using false reviews, and the court granted a claim for damages.
Reference case law: Osaka District Court, April 11, 2019 (Heisei 31) (2019) Decision
The Risks of Engaging in Illegal Review Solicitation Services
The risks associated with violations of the Premiums and Representations Act are primarily borne by the party that requested the solicitation services. Therefore, the actual service providers who write the reviews are less likely to face sanctions for violations of the Premiums and Representations Act.
However, it may seem that the service providers bear no risk, but their actions could potentially constitute a violation of the Unfair Competition Prevention Act.
Article 2: For the purposes of this Act, “unfair competition” refers to the following:
(20) Acts of making representations that could mislead others regarding the origin, quality, content, manufacturing method, purpose, or quantity of goods or services, or the quality, content, purpose, or quantity of services in documents or communications used for advertising or transactions, or transferring, delivering, displaying for the purpose of transfer or delivery, exporting, importing, or providing through telecommunication lines goods with such representations, or providing services with such representations.
Unfair Competition Prevention Act
Since the actions of the service providers may fall under the category of misleading representations, it is possible to make claims based on the Unfair Competition Prevention Act for:
- Demand for cessation of infringement
- Preventive demand against those who are likely to commit an infringement
- Demand for necessary measures to stop or prevent infringement, such as disposal of the items constituting the infringement
(Article 3).
Additionally, there is a possibility of claims for damages and measures to restore trust.
Furthermore, there is a potential for criminal penalties under the Penal Code, such as defamation (Article 230), damage to credit, and obstruction of business by deception (Article 233).
In cases involving exaggerated advertising of pharmaceuticals or medical devices, there is also a risk of administrative penalties under the Pharmaceuticals and Medical Devices Act (PMD Act).
Related article: Are Reviews Subject to Regulation Under the PMD Act? Explaining Related Laws
In addition, in cases of exaggerated representations related to health foods, there is also a risk of measures being taken under the Health Promotion Act.
Reference: Consumer Affairs Agency | Management of Consumer Reviews to Ensure Consumer Trust
Conclusion: Consult a Lawyer About the Legality of Review Management Services Under Japanese Law
We have discussed the precautions regarding the use of review management services. Customer reviews are a crucial marketing metric for businesses and store owners, and naturally, there is a desire to obtain high ratings to attract more customers.
However, casually employing review management companies to increase reviews that do not reflect reality and aiming for high ratings can violate Google’s policies and various regulations, including the Japanese Premiums and Representations Act. It is necessary to consider these actions carefully. If an order for corrective measures or a fine is imposed, it could significantly damage the company’s credibility, image, and management.
At the same time, it is also essential to take measures against low ratings, malicious defamation, harassment, and reputation damage aimed at causing public outrage. If you are troubled by defamation in Google Maps reviews, please refer to this article.
Related Article: How to Delete Reviews from Google Maps (My Business)
Guidance on Measures by Our Firm
Monolith Law Office is a law firm with extensive experience in both IT, particularly the internet, and legal matters. In recent years, violations of the Act against Unjustifiable Premiums and Misleading Representations, such as deceptive advertising on the internet, have become a significant issue, and the need for legal checks has been increasingly recognized. Our firm offers services such as legal reviews of advertisements and landing pages (LPs), and the creation of guidelines, taking into account various Japanese legal regulations. Please refer to the article below for more details.
Areas of practice at Monolith Law Office: Review of Articles & LPs under the Pharmaceutical and Medical Device Act, etc.
Category: IT
Tag: ITTerms of Use
