Just Eat and Autotrader are among five firms under investigation by the competition watchdog as part of a crackdown on fake and misleading reviews.

The Competition and Markets Authority (CMA) said it would probe whether the handful of companies, which span sectors including funerals, food delivery and car sales, had broken consumer laws.

Other companies under investigation include funeral firm Dignity, feedback firm Feefo, and pasta firm Pasta Evangelists.

Last April, the CMA was granted new powers to fine firms for violating consumer laws. This includes obtaining and posting fake reviews, as well as paid-for-reviews that are not clearly marked as incentivised.

Sarah Cardell, chief executive of the CMA said: ‘Fake reviews strike at the heart of consumer trust - with many of us worrying about misleading content when looking at reviews online.

‘With household budgets under pressure, people need to know they're getting genuine information - not reviews or star ratings that have been manipulated to push them towards the wrong choice.

‘We've given businesses the time to get things right. Now we're deploying our new powers to tackle some of the most harmful practices head on.’

The CMA said it was looking into whether Just Eat’s ratings system had inflated certain certain restaurants and grocers, giving consumers ‘a potentially misleading picture of quality’.

Autotrader and Feefo – which handles reviews for the site - are under investigation for their treatment of one-star reviews, and whether they were either hidden on the platform.

The CMA is investigating Dignity for ‘misleading’ reviews written by staff, while Pasta Evangelists is being probed over allegations it offered customers discounts for leaving five-star reviews without it being disclosed.

Autotrader shares dipped 1.3 per cent this morning, while the other firms under investigation are not listed on the London stock market. 

The regulator said it had ‘not reached any conclusions about whether consumer has been broken.’

If the firms are found to have broken the law, the CMA can order them to change their practices and impose fines of up to 10 per cent of their annual global sales.

Autotrader said: ‘We endeavour always to operate as a responsible and compliant business and will co-operate fully with the CMA's investigation.’

A spokesperson for Just Eat said: 'We are working closely with the Competition and Markets Authority to ensure the reviews and ratings on our platform are clear, transparent and easy to use for all our customers and partners.

'Our goal has always been to create a platform that works for everyone - from the people ordering their favourite meals to our restaurants and retail partners serving their communities. We will continue to engage constructively with the CMA throughout their investigation.'

The investigation comes after Google and Amazon were forced to improve their systems to identify and remove fake reviews.

Last June, Amazon said it had agreed to put in place ‘robust processes’.