Reputation Systems Between Market Needs and Consumer Protection

In a market, such as the digital one, in which information can persuade consumers of the reliability of a business owner or the quality of a product or service, as well as on the contrary, reputation became the main asset for economic operators: an asset on which to invest time and money. It is thus essential to analyze the market position of the company or of its products, comparing it with that enjoyed by competitors; also, there is the need to guarantee the completeness and the constant updating of the information regarding the company, and to create, if the reputation is definitively compromised, a new social identity, on which to build a renewed good reputation in time. Reputation is abstracted from the person (or from the product or service) to which it refers and has become a new specific asset: a tool for the functioning of the market and, at the same time, a market tool. The exponential growth of reputational systems is linked to this assumption. Based on technologies that collect and process information about company reputation within a specific context, these systems help building trust reducing information asymmetry. As stated in literature, reputational systems “improve decision-making by consumers and help developing well-functioning markets”. Nevertheless, they are the source of several new problems, already noted by the national and international Courts. The risk of information manipulation is high, with negative consequences that reverberate both on consumers, misleading their decision-making process, and on economic operators who see the advantages of being subjected to others’ judgment turning into a failure. Furthermore, these systems raise a broad problem relative to the privacy and personal data protection. Emblematic is the case of false or misleading users’ reviews from which emerges the need for a regulatory intervention, considering that the reputational systems cannot be left entirely to market forces; a regulatory intervention which must consider all the subjects involved in the processes of creation and sharing information and the general need of the person protection. This article explores the impact of the reputational systems on the global markets, analyzing arising problems and challenges on the legal point of view.