Employees must be transparent when posting reviews about their employer or its competitors
Employee reviews of a company that give a false or misleading impression to consumers and do not disclose the employee’s connection to the business could be liable under the Competition Act.
In line with this, the Competition Bureau has issued a warning for businesses to watch out for reviews posted by their employees that don't properly disclose their relationship.
When posting online reviews about their company or its competitors, employees must disclose all connections to the business, product or service, even if they're providing their honest opinion, as these connections have the potential to affect how consumers evaluate the reviewer's independence. This applies to all types of reviews, including testimonials on social media, said the bureau.
Reviews must be transparent and truthful to allow consumers to make informed shopping choices.
"Online reviews often strike at the heart of a consumer's buying decision. Shoppers trust that reviews are from real unbiased customers, just like them. When employees post reviews without disclosing their relationship with the business, consumers are misled. We will not hesitate to vigorously pursue enforcement action against problematic reviews," said Matthew Boswell, commissioner of competition.
Recommendations to employers
The Bureau has recommended that employers:
- Train employees to properly disclose their business connection when posting reviews about the company or its competitors. If it is not possible for the employee to clearly state their connection to the business within the review, they should avoid posting it.
- Put in place a compliance program to prevent misleading reviews by employees and build an effective monitoring system to detect misconduct.
Implications for misleading reviews
The deceptive marketing practices provisions of the Competition Act apply to anyone who promotes a product, service, or any business interest. Those who do not comply may face significant penalties.
The consequences associated with being found to have engaged in deceptive marketing practices depend on whether the conduct falls under the civil or criminal provisions of the Competition Act, according to the Government of Canada.
Civil provisions regard making false or misleading representations, and the court may order the person to stop engaging in such conduct, to publish a corrective notice, and/or pay an administrative monetary penalty. The court may also require the person to compensate consumers who bought products based on the false or misleading representation and, in certain cases, may issue an interim injunction to freeze assets.
Criminal provisions regard knowingly or recklessly making a false or misleading representation contrary to section 52 of the Competition Act and could result in both fines and imprisonment.
