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November 29, 2011

Groupon Korea Gets Caught Writing Phony Reviews

By Michelle Amodio, TMCnet Contributor

An employee of Groupon Korea has been caught writing phony reviews on the Groupon site, a South Korea antitrust watchdog is saying.

On Monday, the employee-in-question reportedly wrote 147 false reviews of products, posing as an actual customer who purchased said items. The Fair Trade Commission (FTC (News - Alert)) has fined Groupon South Korea 17 million won, equivalent to $14,773 USD.



The Korea Herald reported that Groupon Korea has since corrected the wrongdoings of the false reviews, as the incidents happened before August of this year.

In spite of that, daily deal services are on the rise in South Korea, so much that Groupon is up against more popular companies Coupang and Ticket Monster.

This isn’t the first time daily deal services have been under fire for sketchy practices.

Thumbtack, a community marketplace, recently conducted its own study on daily deal sites, particularly when it comes to prices offered through sites such as Groupon and LivingSocial (News - Alert). Their study found that regular prices quoted by those sites in particular were “strikingly high.”

In 8 of the 10 deals they reviewed, the “regular” prices quoted by Groupon and LivingSocial were higher than the prices quoted by the same merchants when they contacted them.

Of five Groupon merchants that were called, all quoted prices lower than the merchant’s regular price advertised by Groupon.

Of five LivingSocial merchants that were called, three quoted prices lower than the merchant’s regular price advertised by LivingSocial.

For each deal reviewed, the merchant was contacted and asked for their regular price on the same service offered by the daily deal. For example, if a house cleaning deal was limited to two hours of routine cleaning in a well-taken-care-of home in zip code 98765, then that’s exactly the bid asked for. Not once was a discount or deal asked for.




Michelle Amodio is a TMCnet contributor. She has helped promote companies and groups in all industries, from technology to banking to professional roller derby. She holds a bachelor's degree in Writing from Endicott College and currently works in marketing, journalism, and public relations as a freelancer.

Edited by Jennifer Russell
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