Markets and Innovation

The emergence of generative artificial intelligence tools that allow people to efficiently produce novel and detailed online reviews with almost no work has put merchants, service providers and consumers in uncharted territory, watchdog groups and researchers say.

Phony reviews have long plagued many popular consumer websites, such as Amazon and Yelp. They are typically traded on private social media groups between fake review brokers and businesses willing to pay. Sometimes, such reviews are initiated by businesses that offer customers incentives such as gift cards for positive feedback.

But AI-infused text generation tools, popularized by OpenAI’s ChatGPT, enable fraudsters to produce reviews faster and in greater volume, according to tech industry experts.

The deceptive practice, which is illegal in the U.S., is carried out year-round but becomes a bigger problem for consumers during the holiday shopping season, when many people rely on reviews to help them purchase gifts.

Where are AI-generated reviews showing up?

Fake reviews are found across a wide range of industries, from e-commerce, lodging and restaurants, to services such as home repairs, medical care and piano lessons.

The Transparency Company, a tech company and watchdog group that uses software to detect fake reviews, said it started to see AI-generated reviews show up in large numbers in mid-2023 and they have multiplied ever since.

For a report released this month, The Transparency Company analyzed 73 million reviews in three sectors: home, legal and medical services. Nearly 14% of the reviews were likely fake, and the company expressed a “high degree of confidence” that 2.3 million reviews were partly or entirely AI-generated.

“It’s just a really, really good tool for these review scammers,” said Maury Blackman, an investor and advisor to tech startups, who reviewed The Transparency Company’s work and is set to lead the organization starting Jan. 1.

In August, software company DoubleVerify said it was observing a “significant increase” in mobile phone and smart TV apps with reviews crafted by generative AI. The reviews often were used to deceive customers into installing apps that could hijack devices or run ads constantly, the company said.

The following month, the Federal Trade Commission sued the company behind an AI writing tool and content generator called Rytr, accusing it of offering a service that could pollute the marketplace with fraudulent reviews.

The FTC, which this year banned the sale or purchase of fake reviews, said some of Rytr’s subscribers used the tool to produce hundreds and perhaps thousands of reviews for garage door repair companies, sellers of “replica” designer handbags and other businesses.

It’s likely on prominent online sites, too

Max Spero, CEO of AI detection company Pangram Labs, said the software his company uses has detected with almost certainty that some AI-generated appraisals posted on Amazon bubbled up to the top of review search results because they were so detailed and appeared to be well thought-out.

But determining what is fake or not can be challenging. External parties can fall short because they don’t have “access to data signals that indicate patterns of abuse,” Amazon has said.

Pangram Labs has done detection for some prominent online sites, which Spero declined to name due to non-disclosure agreements. He said he evaluated Amazon and Yelp independently.

Many of the AI-generated comments on Yelp appeared to be posted by individuals who were trying to publish enough reviews to earn an “Elite” badge, which is intended to let users know they should trust the content, Spero said.

The badge provides access to exclusive events with local business owners. Fraudsters also want it so their Yelp profiles can look more realistic, said Kay Dean, a former federal criminal investigator who runs a watchdog group called Fake Review Watch.

To be sure, just because a review is AI-generated doesn’t necessarily mean its fake. Some consumers might experiment with AI tools to generate content that reflects their genuine sentiments. Some non-native English speakers say they turn to AI to make sure they use accurate language in the reviews they write.

“It can help with reviews (and) make it more informative if it comes out of good intentions,” said Michigan State University marketing professor Sherry He, who has researched fake reviews. She says tech platforms should focus on the behavioral patters of bad actors, which prominent platforms already do, instead of discouraging legitimate users from turning to AI tools.

What companies are doing

Prominent companies are developing policies for how AI-generated content fits into their systems for removing phony or abusive reviews. Some already employ algorithms and investigative teams to detect and take down fake reviews but are giving users some flexibility to use AI.

Spokespeople for Amazon and Trustpilot, for example, said they would allow customers to post AI-assisted reviews as long as they reflect their genuine experience. Yelp has taken a more cautious approach, saying its guidelines require reviewers to write their own copy.

“With the recent rise in consumer adoption of AI tools, Yelp has significantly invested in methods to better detect and mitigate such content on our platform,” the company said in a statement.

The Coalition for Trusted Reviews, which Amazon, Trustpilot, employment review site Glassdoor, and travel sites Tripadvisor, Expedia and Booking.com launched last year, said that even though deceivers may put AI to illicit use, the technology also presents “an opportunity to push back against those who seek to use reviews to mislead others.”

“By sharing best practice and raising standards, including developing advanced AI detection systems, we can protect consumers and maintain the integrity of online reviews,” the group said.

The FTC’s rule banning fake reviews, which took effect in October, allows the agency to fine businesses and individuals who engage in the practice. Tech companies hosting such reviews are shielded from the penalty because they are not legally liable under U.S. law for the content that outsiders post on their platforms.

Tech companies, including Amazon, Yelp and Google, have sued fake review brokers they accuse of peddling counterfeit reviews on their sites. The companies say their technology has blocked or removed a huge swath of suspect reviews and suspicious accounts. However, some experts say they could be doing more.

“Their efforts thus far are not nearly enough,” said Dean of Fake Review Watch. “If these tech companies are so committed to eliminating review fraud on their platforms, why is it that I, one individual who works with no automation, can find hundreds or even thousands of fake reviews on any given day?”

Spotting fake AI-generated reviews

Consumers can try to spot fake reviews by watching out for a few possible warning signs, according to researchers. Overly enthusiastic or negative reviews are red flags. Jargon that repeats a product’s full name or model number is another potential giveaway.

When it comes to AI, research conducted by Balázs Kovács, a Yale professor of organization behavior, has shown that people can’t tell the difference between AI-generated and human-written reviews. Some AI detectors may also be fooled by shorter texts, which are common in online reviews, the study said.

However, there are some “AI tells” that online shoppers and service seekers should keep it mind. Panagram Labs says reviews written with AI are typically longer, highly structured and include “empty descriptors,” such as generic phrases and attributes. The writing also tends to include cliches like “the first thing that struck me” and “game-changer.”

SHANGHAI, Dec 5 (Reuters) – Automakers in China are ramping up exports of hybrid vehicles to Europe and planning more models for the key market, exposing the limits of the European Union’s electric vehicle tariff scheme.

The bloc’s latest EV tariffs to protect its auto industry from a flood of cheap Chinese imports do not apply to hybrid cars. That could see major brands such as China’s top EV maker BYD (002594.SZ), opens new tab continue expansion in the region, analysts say.

Some manufacturers are also shifting production and assembly to Europe to lower the cost around tariffs.

“The increase is driven by Chinese OEMs shifting toward PHEVs (plug-in hybrids) as a way to sidestep the new EU tariffs on BEV (battery-powered EVs) imports from China,” said Murtuza Ali, an analyst at Counterpoint Research.

He expects China’s hybrid exports to Europe to grow 20% this year and even faster next year.

EU tariffs of up to 45.3% on Chinese EV imports came into effect in late October to counter what the European Commission says are unfair subsidies that helped create spare production capacity of 3 million EVs per year in China, twice the size of the EU market.

The anti-subsidy investigations on Chinese EV imports, which began in October 2023, and slowing car sales in China from an economic slowdown, have led some automakers to change their European strategy to focus more on hybrid exports, the data shows.

That helped exports of plug-in hybrids and conventional hybrids account for 18% of China’s total vehicle sales to Europe in the third quarter, doubling from 9% in the first quarter. The proportion of EV shipments, however, fell to 58% from 62% during the same period.

The trend is likely to gain further momentum.

China, which overtook Japan as the world’s biggest auto exporter last year aided by its dominance in EVs, is stepping up its export drive to address overcapacity at home, analysts say.

Given 100% tariffs on Chinese-made EVs in the United States and Canada, Europe is also one of the most obvious outlets for Chinese auto makers.

The European Commission did not immediately reply to a request for comment on rising hybrid imports from China.

MORE HYBRID MODELS

Major Chinese automakers could upend the European plug-in hybrid market dominated by European and Japanese firms as they meet rising demand for affordable cars with better fuel economy amid rising inflation.

BYD is taking on Volkswagen (VOWG_p.DE), opens new tab and Toyota (7203.T), opens new tab in Europe with its first plug-in hybrid model for the region, the Seal U DM-i.

The model is priced from 35,900 euros ($37,700), 700 euros lower than VW’s best-selling PHEV model Tiguan and 10% cheaper than Toyota’s C-HR PHEV.

It is also considering production of both EVs and hybrids in its Hungarian plant, Chinese official media China Auto News reported.

“The segment could see bigger growth potentials with Chinese automakers bringing more affordable options to Europe that are attractive to cost-sensitive consumers,” said Yale Zhang, managing director at Automotive Foresight.

SAIC (600104.SS), opens new tab, whose EV exports to the EU face the highest additional rate of 35.3%, has said it plans products with various powertrain systems for the European market.

Geely (0175.HK), opens new tab, China’s second-largest automaker by sales, launched a new plug-in hybrid under its brand Lynk & Co for Europe last month.

“The recent increased introduction of electrified hybrid models to markets around the world by global automakers is in line with consumer demands and purchasing trends,” Geely said in response to Reuters questions. It did not comment on trade restrictions.

Japanese automakers too are taking advantage of the growth of conventional hybrids in Europe this year and addressing their overcapacity problems in China.

Honda (7267.T), opens new tab, which suffered a 29% slump in China vehicle sales in the first nine months of this year, exports two conventional hybrids, one plug-in hybrid and one pure EV model from China to Europe.

While increasing exports from China could trigger intense price competition in Europe’s hybrid vehicle market, some experts caution Chinese firms are likely to tread more carefully for fear of sparking another round of EU tariffs.

“If BYD takes Qin Plus to Europe at a price of 20,000 euros, I am sure it would trigger another earthquake,” Zhang said, referring to its hybrid sedan.

President-elect Donald Trump in late November pledged tariffs on the United States’ three largest trading partners – Canada, Mexico and China – detailing how he will implement campaign promises that could trigger trade wars.

Here are companies that may be affected (by sector, in alphabetical order):

AUTOMAKERS

AUDI

Volkswagen’s (VOWG_p.DE), opens new tab Audi plant in San Jose Chiapa, Mexico, makes the Q5, employing just over 5,000 people. It produced nearly 176,000 cars in 2023, its website showed. In the first half of 2024, nearly 40,000 were exported to the U.S., according to the Mexican Automotive Manufacturers Association.

BMW

BMW’s (BMWG.DE), opens new tab plant in San Luis Potosi, Mexico, produces the 3 Series, 2 Series Coupe and M2, with nearly all the output going to the U.S. and other markets worldwide, according to the carmaker. From 2027, it will produce the all-electric ‘Neue Klasse’ model line.

BYD

Chinese EV maker BYD (002594.SZ), opens new tab has been scouting for locations to build a plant in Mexico but has said repeatedly that the factory will serve the domestic market and not produce cars to be sold in the U.S.

HONDA MOTOR

Honda Motor (7267.T), opens new tab sends 80% of its Mexican output to the U.S. market and its chief operating officer Shinji Aoyama warned on Nov. 6 that it would have to think about shifting production if the U.S. were to impose permanent tariffs on vehicles imported from the country.

JAC MOTORS

JAC Motors (600418.SS), opens new tab has since 2017 had a joint venture in Mexico with Giant Motors to assemble JAC brand vehicles. SAIC-owned (600104.SS), opens new tab MG in August announced plans to build a plant in the country.

KIA CORP

South Korea’s Kia Corp (000270.KS), opens new tab has a factory in Mexico that makes its own vehicles and a small number of Santa Fe SUVs for its affiliate Hyundai Motor (005380.KS), opens new tab for U.S. exports.

MAZDA

Mazda (7261.T), opens new tab exported around 120,000 vehicles from Mexico to the United States in 2023. Mazda President Masahiro Moro said on Nov. 7 that the tariff issue is “not a problem that can be solved by individual companies” and it would carefully examine the details before deciding its response.

NISSAN MOTOR

Nissan Motor (7201.T), opens new tab has two plants in Mexico where it makes the Sentra, Versa and Kicks models for the U.S. market. It produced nearly 505,000 vehicles in Mexico in the first nine months of 2024. The company does not disclose how many of those were exported to the U.S. market.

STELLANTIS

Stellantis (STLAM.MI), opens new tab operates two assembly plants in Mexico: Saltillo, which makes Ram pick-ups and vans, and Toluca, for the Jeep Compass mid-sized SUV. The Franco-Italian group also owns two assembly plants in Ontario, Canada: Windsor, where it makes Chrysler models, and Brampton, currently under retooling and scheduled to resume production in 2025 with a new Jeep model.

TOYOTA MOTOR

Toyota Motor (7203.T), opens new tab builds its Tacoma pick-up truck at two plants in Mexico. It sold more than 230,000 of them in the U.S. in 2023, representing about 10% of its total sales in that market. Toyota used to produce the Tacoma in the U.S. but now ships all of them from Mexico, which accounts for most of the production at the plants.

VOLKSWAGEN

Volkswagen’s (VOWG_p.DE), opens new tab factory in Puebla is the largest auto plant in Mexico and one of the largest in the VW Group, according to the carmaker’s website. Nearly 350,000 cars were made there in 2023, including the Jetta, Tiguan and Taos, all for export to the U.S.

AUTO SUPPLIERS

AUTOLIV

Sweden’s Autoliv , the world largest maker of airbags and seat belts, said it employs around 15,000 staff in Mexico, declining to comment on exports into the U.S. from there.

MICHELIN

Tyre maker Michelin (MICP.PA), opens new tab has two plants in Mexico — Queretaro and Leon — and three in Canada: Pictou, Bridgewater and Waterville.

YANFENG

Chinese seat maker Yanfeng Automotive Interiors have been producing in Mexico for years to supply automakers including General Motors (GM.N), opens new tab and Toyota, which had relocated their capacity to Mexico to lower costs.

OTHERS

Other part makers with plants in Mexico serving automotive production for the U.S. market include Italian tyremaker Pirelli (PIRC.MI), opens new tab, Italian premium brake maker Brembo (BRBI.MI), opens new tab and Italy’s Eurogroup Laminations (EGLA.MI), opens new tab.

Eurogroup Laminations, which has Tesla (TSLA.O), opens new tab among its clients, specialises in stators and rotors, two key components of electric motors and generators.

U.S. automaker Tesla encouraged its Chinese suppliers to set up plants in Mexico in 2023 to mainly supply its planned factory in Mexico.

Tesla originally planned to start production in Mexico in early 2025 but has largely shifted to an expansion plan for its Texas plant.

Tech giant Apple plans to invest in a manufacturing plant in Indonesia that produces components for smartphones and other products, Indonesia’s investment minister said on Thursday.

Rosan Roeslani told reporters that Apple (AAPL.O), opens new tab and Indonesia are still ironing out details of the planned investment.

The minister had said earlier this week that Indonesia was expecting a $1 billion investment from the tech company.

Bitcoin catapulted above $100,000 for the first time on Thursday, a milestone hailed even by sceptics as a coming-of-age for digital assets as investors bet on a friendly U.S. administration to cement the place of cryptocurrencies in financial markets.

Once it broke $100,000 in Thursday’s Asian morning, boosted by U.S. President-elect Trump’s nomination of pro-crypto Paul Atkins to run the Securities and Exchange Commission, it was soon at an all-time high of $103,619, a surge of about 6% on the day. It was last fetching $102,650.

The total value of the cryptocurrency market has almost doubled over the year so far to hit a record just shy of $3.8 trillion, according to data provider CoinGecko. By comparison, Apple (AAPL.O), opens new tab alone is worth about $3.7 trillion.

Bitcoin’s march from the libertarian fringe to Wall Street has minted millionaires, a new asset class and popularised the concept of “decentralised finance” in a volatile and often controversial period since its creation 16 years ago.

Bitcoin has more than doubled in value this year and is up more than 50% in the four weeks since Donald Trump’s sweeping election victory, which also saw a slew of pro-crypto lawmakers being elected to Congress.

“We’re witnessing a paradigm shift,” said Mike Novogratz, founder and CEO of U.S. crypto firm Galaxy Digital.

“Bitcoin and the entire digital asset ecosystem are on the brink of entering the financial mainstream – this momentum is fuelled by institutional adoption, advancements in tokenisation and payments, and a clearer regulatory path.”

Trump embraced digital assets during his campaign, promising to make the United States the “crypto capital of the planet” and to accumulate a national stockpile of bitcoin.

“We were trading basically sideways for about seven months, then immediately after Nov. 5, U.S. investors resumed buying hand-over-fist,” said Joe McCann, CEO and founder of Asymmetric, a Miami digital assets hedge fund.

Bitcoin’s proponents cheered Trump’s nomination of Atkins to the SEC.

A former SEC commissioner, Atkins has been involved in crypto policy as co-chair of the Token Alliance, which works to “develop best practices for digital asset issuances and trading platforms,” and the Chamber of Digital Commerce.

“Atkins will offer a new perspective, anchored by a deep understanding of the digital asset ecosystem,” said Blockchain Association CEO Kristin Smith.

“We look forward to working with him … and ushering in – together – a new wave of American crypto innovation.”

A slew of crypto companies including Ripple, Kraken and Circle are also jostling for a seat on Trump’s promised crypto advisory council.