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PWC: Product rating systems come under the sights of competition authorities

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MeetMilk.ro

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The analysis of consumer product and service rating systems highlights the growing influence of these systems on consumer choices and business practices. While these systems are not yet widely adopted or officially recognized in Romania’s legislative framework, they are becoming a common practice, particularly in e-commerce and the FMCG (Fast-Moving Consumer Goods) sector.

The French Competition Authority (ACF) has launched an investigation into these systems in 2024, which has spurred further attention from other European competition authorities. The investigation culminated in the publication of Opinion 25-A-01 in January 2025, which identifies both the benefits and the potential competitive risks associated with the adoption of rating systems. These risks include issues in both the development and implementation stages of rating systems.

Risks in the Development Stage:

  1. Choosing Evaluation Criteria: A key concern is the proper and transparent selection of evaluation criteria and their weighting. Misleading or unfair ratings can occur if these criteria are chosen improperly, as seen in the case of the Nutri-Score system in Romania, which was removed from the market in 2022.
  2. Collaborative Development by Competitors: There is a risk when competitors collaborate on creating rating systems, especially when products within the same market receive unjustifiably similar ratings. Such practices could skew results to favor certain companies.

Risks in the Implementation Stage:

  1. Abuse of Dominant Market Position: The refusal of a dominant player to provide access to essential databases could be seen as an abuse of power, particularly if access is critical for developing or implementing rating systems.
  2. Unfair Competition Practices: The French Competition Authority raised concerns about the possibility of rating systems being used to unfairly harm products by awarding them unfavorable ratings, particularly when these ratings are based on subjective or unverified criteria.
  3. Selective Display of Ratings: Some businesses may display only favorable ratings for their products, leaving out those with lower scores. The algorithms used by rating systems must prevent collusion between competitors to avoid manipulating which ratings are visible.
  4. Imposition of Rating Systems: In cases where dominant players impose rating systems on their partners, there could be competitive risks, especially if the rating system lacks transparency or fair evaluation methods.

The risks are more pronounced in sectors with numerous rating systems, such as DIY product markets, where suppliers may have to comply with multiple, potentially conflicting rating standards, leading to increased costs.

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