Trusting consumer data in digital age

In today’s highly connected world, the primary source of information about products has shifted from radio and television to the Internet. However, are seemingly credible online reviews based on genuine experiences, or are they part of a carefully orchestrated information scam?

Marketplace competition is facing a crisis of trust. Malicious online competitive tactics are increasingly prevalent, with unscrupulous actors manipulating consumers’ perceptions and purchasing decisions. Recent cases in Taiwan can be classified into three broad categories:

The first is fraudulent marketing. In June last year, police uncovered an investment advertising scam involving the alleged impersonation of Nvidia chief executive officer Jensen Huang (黃仁勳). The suspects used fake accounts on Facebook and paid advertisements to create the illusion of celebrity endorsement, luring people to fraudulent Web sites and causing nearly 100 to lose more than NT$13 million (US$396,729) combined.

The second is exaggerated and misleading marketing. In March, the Fair Trade Commission ruled that international financial management company Ju Li’s claim of being “No. 1 in online reputation” in its Google Business Profile lacked objective evidence, contravening Article 21 of the Fair Trade Act (公平交易法). The company was fined NT$100,000.

The third category to watch for is keyword-based disparagement advertising. Civil judgement No. 272 issued by the High Court in September last year and a subsequent Supreme Court ruling in September issued for the same lawsuit said that Evertrust Rehouse Co, Taiwan’s largest property broker by number of offices, and online property service HouseFun purchased keyword advertisements using terms such as “Sinyi Realty Inc” and deliberately linked them to negative news reports and disparaging content.

People searching online for their competitors were exposed to negative information and redirected to the advertisers’ own platforms. The courts ruled that the practice constituted deceptive or manifestly unfair conduct, which is prohibited under Article 25 of the Fair Trade Act. They ordered the companies to jointly bear the cost of publishing portions of the judgement on the front pages of the national editions of the China Times, the United Daily News and the Liberty Times (sister paper of the Taipei Times).

Like the 2013 Samsung scandal — in which Samsung Taiwan hired writers to pose as ordinary consumers online who would praise Samsung products and criticize competitors without disclosing their paid connections — the property advertising case is a notable example of unethical marketing by major companies.

Although the courts ultimately ruled in Sinyi Realty’s favor, the reality of modern commerce is that false information spreads six times faster than the truth. By then serious harm has already been done. Most misled consumers will not see clarifications, and their distorted impressions are difficult to correct.

Such cases serve as a collective reminder to consumers in the digital age that seeing is not believing and reports might be fabricated. Aside from relying on court investigations, digital information governance requires that regulatory authorities take a proactive approach to improving oversight, and that platforms implement source disclosure and identity verification to eliminate malicious and shady marketing tactics.

In the digital age, what consumers truly need is not more information, but information they can trust, and the right to make informed judgements free from deception and manipulation.

Lo Cheng-chung is a professor at Southern Taiwan University of Science and Technology and director of its Institute of Financial and Economic Law.