Australia: Online guarantees: ACCC releases guidelines for businesses and online review platforms addressing fake, incentivised and misleading reviews

Last Updated: 16 January 2014
Article by Justine Munsie and Kate Eaglen

Consumer confidence in online information is at the centre of guidelines recently released by the Australian Competition and Consumer Commission (ACCC) for reviews for businesses and consumer review platforms (Guidelines). The Guidelines are a response to the ACCC's concerns regarding the increase in paid for and fake reviews and testimonials which can mislead consumers who are becoming increasingly reliant on online reviews for goods and services.

In 2012, the issue of sponsored tweets was brought to light by ABC's Media Watch program. It reported on a number of Australian celebrities being paid by the South Australian Tourism Commission to tweet positive messages about Kangaroo Island, to coincide with the launch of a TV advertisement campaign for the island. Soon after the sponsored tweets were revealed, the ACCC released a statement that celebrities did not need to disclose that they are being paid for such endorsements, but their comments must be truthful and a genuinely held opinion. The ACCC's chairman Rod Sims subsequently identified online reviews and false testimonials as one of the ACCC's compliance and enforcement priorities for 2013.

The ACCC has previously taken action against misleading reviews. In 2011, it took action against a removalist business Citimove which published reviews on its website that were purportedly written by genuine customers when they were not. Citimove admitted to misleading conduct and paid a $6,600 infringement notice. In May 2013, the ACCC issued proceedings against Euro Solar and Australian Solar Panel for misleading testimonials appearing on their website. The ACCC alleges that the testimonials were not made by genuine customers.

The new Guidelines set out three core principles of conduct for consumer review platforms and businesses to abide by:

  • Be transparent about commercial relationships;
  • Don't post or publish misleading reviews; and
  • Remember that omitting negative reviews can be as misleading as posting fake reviews.

Commercial Relationships

Some consumer review platforms allow paying businesses to advertise on the site, promote positive reviews, or prevent negative reviews from being uploaded automatically. The Guidelines reinforce that failure to disclose such commercial relationships may risk breaching the Australian Consumer Law contained in the Competition and Consumer Act 2010. The Guidelines suggest that consumer review platforms have a disclosure that includes:

  • a prominent explanation of the nature and extent of the commercial relationship and its impact, if any, on the review page of the affected business; and
  • distinguishing review results which are in any way promoted or improved because of a commercial relationship through shading or other means so that their content is not confused with 'organic' review results.

Misleading Reviews

Misleading reviews are those which are presented as impartial, but are in fact written by the reviewed business, its competitor, a paid third party, or a consumer who has provided an inflated review because they were given a benefit of some kind by doing so.

The Guidelines state that businesses should not write, or engage another individual to write, reviews what do not reflect a genuinely held opinion. The ACCC will consider such conduct to be misleading.

The Guidelines recommend that consumer review platforms remove reviews which they know are fake, and take steps to identify fake reviews. A best practice approach is seek out fake reviews reactively (relying on complaints information) and proactively (using automated or manual internal systems). Where a business provides a well substantiated reason that a review is fake, the review platform should, following investigation, remove the review as soon as possible.

The amount of effort required under the Guidelines to detect fake reviews will depend on a range of circumstances, including the platforms systems, size and whether verification of purchase is required to post a review.

The guidelines state that incentives should only be offered in exchange for reviews if the incentives are offered equally to customers who are likely to be complimentary as customers who are not, the reviewer is expressly told that the incentive is available whether the review is positive or negative and the incentive is promptly disclosed to users who rely on affected reviews. Online review platforms are also advised to be alert to the use of incentives and actively seek to identify reviews that may be affected. Where incentives have been offered, the review should disclose this fact.

Omitting Negative Reviews

The Guidelines state that platforms which selectively remove or edit negative reviews because of commercial relationships with the reviewed business risk creating an overall picture of consumer opinion which is misleading.

To avoid providing a misleading impression, consumer review platforms should have content moderation policies to ensure that users and businesses have a clear understanding of when and why online consumer reviews will be removed. These policies should be made available to platform users.

A business or consumer review platform which is found to have engaged in misleading or deceptive conduct is liable for penalties of up to $1.1 million.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Justine Munsie
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