March 23 (Reuters) - Italy's Competition Authority on Monday fined online review platform Trustpilot and its units 4 million euros ($4.61 million) for failing to adequately verify the authenticity of
UK's Trustpilot fined $4.6 million by Italian regulator for misleading consumers
Italian Regulator's Actions and Trustpilot's Response
Background of the Fine
March 23 (Reuters) - Italy's competition regulator on Monday slapped a fine of 4 million euros ($4.6 million) on online review platform Trustpilot and its units for failing to adequately verify the authenticity of reviews and for misleading consumers about how their services work.
Issues with Review Collection and Verification
Handpicked Review Invitations
The platform's review collection services allowed businesses to handpick which consumers received review invitations, undermining the representativeness of published ratings even when reviews were labelled as "verified", the Italian Competition Authority said.
Trustpilot's Statement
"We strongly disagree with the conclusions reached in this finding by the AGCM (regulator) and will be appealing it robustly," Trustpilot said in a statement.
Allegations and Additional Findings
Short Seller Accusations
The fine comes months after short seller Grizzly Research accused Trustpilot of creating fake profiles that gave negative reviews and then pressuring companies to pay for subscriptions - allegations which the company rejected.
Use of "Dark Patterns"
Obscuring Key Information
The watchdog found that Trustpilot also used interface design techniques typical of "dark patterns" to obscure key information about its platform's functioning and which businesses paid for services, in breach of Italy's consumer code.
Financial and Market Impact
The company said it does not expect the fine to have any material impact on its operations or finances. Its shares, which fell as much as 2.7% in early trading, were trading up 4.2% as of 1416 GMT.
($1 = 0.8670 euros)
(Reporting by Yamini Kalia and Prerna Bedi in Bengaluru; Editing by Mrigank Dhaniwala and Arun Koyyur)
