Can Regulation Restore Authenticity? Evidence from Policies Against Online Review Suppression

Anecdotal evidence suggests that businesses threaten consumers with legal action to suppress negative online reviews, creating a chilling effect that undermines transparency and trust online. Although policymakers increasingly recognize this issue and have taken steps to curb it, academic research exploring the effectiveness of regulatory interventions remains surprisingly scarce. This paper addresses that gap by providing a systematic evaluation of the Consumer Review Fairness Act (CRFA), a federal law enacted in the United States in December 2016 to curb review suppression. Leveraging detailed data from TripAdvisor, we demonstrate that the CRFA has had measurable impacts; following the law’s enactment, hotel reviews in the United States have become systematically more negative, as indicated by both star ratings and textual sentiment. Furthermore, reviews have grown systematically longer. These results demonstrate that, following passage of the CFRA, reviews have become generally more informative but systematically more negative. Examining heterogeneity, we find that these declines in ratings have been most concentrated among less reputable hotels and hotels facing stronger competition, indicating that such businesses had been more heavily engaged in review suppression before the CFRA’s passage. Furthermore, we see that these effects have accrued most heavily to reviews involving American consumers and long-tenured users, highlighting the role and influence of legal jurisdictional boundaries and platform experience. Finally, supplemental analyses speak to the prevalence of review censorship on TripAdvisor and the chilling effects of legal threats on consumers’ subsequent reviews. We discuss the implications for policy, practice, and scholarship related to consumer protection and online transparency.

History: Juan Feng, Senior Editor; Yixin Lu, Associate Editor.

Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2023.0436.