AMZN Amazon.com Inc

--UK antitrust watchdog opens probe into US tech giants

--Investigation motivated by concern companies aren't properly addressing issue

--Amazon said it will continue to assist with the enquiries

By Adria Calatayud and Joe Hoppe

The U.K.'s antitrust watchdog said Friday that it has launched an investigation into whether Amazon.com Inc. and Google are doing enough to crack down on fake reviews, adding a new layer to regulatory scrutiny of U.S. tech giants.

The Competition and Markets Authority said the move stems from concerns Amazon and Alphabet Inc.'s Google hasn't been doing enough to address fake reviews on their sites, but added that it hasn't yet reached a view on whether the companies have broken the law.

The move comes amid recent investigations into tech giants' market power and privacy practices, turning the spotlight to misleading online reviews. The coronavirus pandemic has prompted a shift to online consumption, increasing consumers' reliance on online reviews to decide on product purchases.

In February, U.K. consumer group Which? said it found review-manipulation services that sold positive-review campaigns, offered free or discounted products in exchange for reviews or sold contact details for Amazon reviewers.

The CMA said it will gather information to determine whether the companies have broken consumer law by not taking enough action to protect shoppers from fake reviews for online products.

The CMA's decision follows an initial investigation, opened in May 2020, assessing several platforms' internal systems and processes for spotting and dealing with fake reviews. The work raised concerns that Amazon and Google weren't doing enough to detect fake and misleading reviews and suspicious behavior, investigate and promptly remove fake reviews, or impose adequate sanctions on reviewers or businesses to deter them.

The CMA also said it was concerned Amazon's systems were failing to adequately stop or deter sellers from manipulating product listings--like co-opting reviews from other products.

"It is important that these tech platforms take responsibility and we stand ready to take action if we find that they aren't doing enough," CMA Chief Executive Andrea Coscelli said.

Amazon said it devotes significant resources to preventing fake or incentivized reviews from appearing in its store and to ensure reviews accurately reflect customers' experience.

"We will continue to assist the CMA with its enquiries and we note its confirmation that no findings have been made against our business," an Amazon spokesman said.

Amazon says it stopped more than 200 million suspected fake reviews last year before they were seen by customers, and that it is taking action against reviews and customer accounts sold on external social-media sites. In the first quarter of 2021, it reported more than 1,000 social-media groups.

Google didn't immediately respond to requests for comment.

Facebook Inc. and eBay Inc. last year committed to combat trading in fake and misleading reviews on their sites, in response to concerns raised by the CMA. In April, the regulator said Facebook had removed 16,000 groups that sold fake reviews on both Facebook and Instagram.

The regulator said its probe into fake reviews is part of a broader program to establish a new regulatory regime for digital markets. Last week, the CMA said it was launching a study into Apple Inc. and Google's mobile ecosystems and earlier in June said it would have oversight over Google's removal of user-tracking technology from its Chrome browser under a set of commitments from the company to settle an antitrust investigation.

European Union regulators are also ramping up scrutiny for U.S. tech giants. The European Commission, the EU's top antitrust enforcer, on Tuesday opened an antitrust investigation into allegations that Google is abusing its leading role in the advertising-technology sector.

Early in June, the EU and the U.K. opened formal antitrust investigations into Facebook Inc.'s classified-ads service, Marketplace. On April 30, the European Commission charged Apple with antitrust violations for allegedly abusing its control over the distribution of music-streaming apps.

Write to Adria Calatayud at adria.calatayud@dowjones.com and Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

June 25, 2021 05:04 ET (09:04 GMT)

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