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Information Systems Research (2025) AI Processed Human Reviewed
Can Regulation Restore Authenticity? Evidence from Policies Against Online Review Suppression
This study evaluates the impact of the Consumer Review Fairness Act (CRFA), a federal U.S. law designed to prevent businesses from using legal threats to suppress negative online feedback. Employing a difference-in-differences design on data from TripAdvisor and Google Places, the authors examine shifts in review valence, sentiment, and length following the regulation.
Problem
Businesses increasingly suppress negative online reviews through legal threats and non-disparagement clauses, severely biasing consumer perceptions and creating a chilling effect among reviewers. Despite increasing policy responses, empirical evidence on whether regulations effectively curb review suppression and restore rating authenticity has been lacking.
Outcome
- Following the CRFA enactment, U.S. hotel reviews became systematically more negative in both star ratings and textual sentiment.
- Reviews became significantly longer on average, indicating that consumers shared more detailed feedback once legal risks were mitigated.
- Rating declines were most concentrated among less reputable hotels and those in highly competitive local markets, which previously suppressed negative reviews more aggressively.
- The policy's effects were strongest among American reviewers and users with longer platform tenure.
- Reviews became significantly longer on average, indicating that consumers shared more detailed feedback once legal risks were mitigated.
- Rating declines were most concentrated among less reputable hotels and those in highly competitive local markets, which previously suppressed negative reviews more aggressively.
- The policy's effects were strongest among American reviewers and users with longer platform tenure.
What it means for you
- CIO / IT Executive: On Monday morning, initiate a review of our internal policies and legal contracts to ensure no clauses inadvertently threaten or discourage customers from providing honest feedback on public review platforms.
- IT Manager: On Monday morning, task your team with monitoring online review platforms for any patterns of review suppression tactics being used by our competitors, specifically looking for increases in negative reviews that are quickly removed or challenged.
- Business Strategist: On Monday morning, analyze recent customer feedback data, particularly any negative reviews received in the last quarter, and assess if there are opportunities to engage with these customers to improve our offerings and address concerns openly.
- Researcher: On Monday morning, identify and gather publicly available datasets on consumer review sentiment and volume for companies in sectors known for aggressive review suppression prior to recent regulatory changes, to replicate or extend the findings on the CRFA.
- Policymaker: On Monday morning, schedule a meeting with your legislative staff to discuss potential avenues for expanding regulatory protections to cover other forms of consumer feedback, such as social media comments or product testimonials, building upon the success of the CRFA.