As an important part of digital economy, platform economy received extensive attention. As a tool of unfair competition, review manipulation seriously disturbed platform economy market. Based on the framework of “Awareness-Motivation-Capability”, this paper studies the antecedents, consequences, and boundary conditions of review manipulation from the perspective of dynamic competition. Based on a panel data of 4626 hotels on Expedia and TripAdvisor from April 2018 to November 2020, this study uses the threshold effect model to test the proposed hypothesis. We show that: 1) When product rating is lower than that of its rivals, the rating has a significant negative impact on the review manipulation; nevertheless, when product rating is higher than that of its rivals, it has no significant effect on review manipulation. 2) When review manipulation intensity is lower than that of its rivals, it has a negative impact on product sales; when it is higher than that of its rivals, it has a positive effect; with continued increase in review manipulation intensity, the positive impact of review manipulation on product sales will be weakened. 3) Heterogeneity analysis reveals that the influence of product rating on the review manipulation intensity and the impact of review manipulation on product sales are more intense for merchants in climbing period (vs. mature period), economy merchants (vs. premium merchants) and the off season (vs. peak season). Our findings have theoretical implications for understanding the internal motivations and decision-making logic of merchants who engage in review manipulation, as well as policy implications for platform supervision and governance in the digital economy.