Trustpilot Fined in Italy for Failing to Verify Reviews

Trustpilot is facing a €4 million fine imposed by the Italian competition authority, AGCM, for allegedly misleading consumers. The online review platform has stated its intention to robustly appeal this ruling.

The investigation by AGCM found that Trustpilot did not adequately verify the authenticity of reviews published on its platform. This includes reviews labelled as verified, which the authority claims are not representative due to the manner in which reviews are collected. Businesses can choose which customers receive review invitations, potentially skewing the overall ratings.

AGCM’s findings also allege that Trustpilot employed “dark patterns”, user interface designs that encourage specific user actions. Users were reportedly directed towards indicators like the number of verified reviews, without clear disclosure of the influence of paid services offered to businesses on these indicators.

AGCM remarked that Trustpilot failed to provide consumers with necessary information regarding the platform’s operations. In a statement, Trustpilot’s CEO, Adrian Blair, disputed these claims, arguing that they misrepresent how the platform functions. He highlighted the strict prohibition against businesses selecting favourable reviews and noted that the percentage of one-star reviews removed is consistent across both paid and free profiles.

Trustpilot has previously been the target of criticisms regarding its business model. A recent short-selling report from Grizzly Research accused the company of engaging in mafia-style extortion against non-paying customers by creating unsolicited review profiles designed to attract negative feedback. Trustpilot dismissed these claims as categorically false.

Despite these challenges, Trustpilot’s share price has rebounded following strong financial results, with pre-tax profit reaching $14.1 million last year, a significant increase from $5.2 million the previous year. The firm has also intensified its efforts to combat fake reviews, removing 7.8 million false reviews in a single year.

The company remains a significant player in the online review sector, despite the ongoing scrutiny by regulatory authorities.