Australia: Consumer watchdog targets hotel over online reviews

Last Updated: 29 November 2016
Article by Murray Thornhill

The ACCC launched an unprecedented legal action against Meriton Serviced Apartments for allegedly manipulating its ratings and reviews on the Trip Advisor website.

The ACCC is arguing in the Federal Court of Australia that Meriton's practice of selecting guests and prompting them to complete a Trip Advisor review amounts to misleading or deceptive conduct.

While it is certainly unlawful for hoteliers to submit fraudulent reviews on behalf of people who were never guests, or to offer incentives for either positive reviews or removing unfavourable reviews, this current case is testing whether it is actually dishonest to select which customers to ask for their opinion.

We foresee potential difficulties with the argument the ACCC is running because businesses have long been permitted to publish testimonials and positive reviews without having to balance such opinions by also publishing complaints. Selecting customers to ask for a review does not seem very different to the common practice of selecting only positive reviews to publish on a business's website and screening out negative reviews. The distinction here appears to be that the requested reviews are for the Trip Advisor site and not the Hotel's own website, so it could be said Meriton is exploiting the public perception of Trip Advisor ratings and reviews as being unbiased. But does a perceived lack of bias and independence also mean that the public believe or expect Trip Advisor reviews are unsolicited or don't involve review targeting by the businesses being reviewed?

The Trip Advisor website and its terms and conditions of use reveals that it proactively combats fraud and maintains the integrity of the reviews it receives. Its Content Integrity Policy notes:

"Unfortunately, we have seen over our 15 years that some unscrupulous businesses will try to cheat in order to attract more customers. We define "cheating" as positively reviewing their own business (or finding others to do so on their behalf) or negatively reviewing their competitors."

Trip Advisor clearly does not consider only encouraging reviews from guests who will provide positive reviews to be "cheating". Trip Advisor discourages such practices by providing the following advice to businesses:

"avoid selectively e-mailing only the guests you believe will write positive reviews. Review Express emails should be consistently sent to all guests"

However it is not a Trip Advisor requirement that businesses send prompt emails for reviews to all guests. Nowhere does Trip Advisor hold out to the public that the reviews are unsolicited or unselected by the businesses themselves.

The ACCC is no doubt bringing this action against Meriton because the business of online reviews – especially in relation to travel destinations - is big business and consumers are clearly influenced to spend money at businesses that have received a positive rating from other consumers via review sites like Trip Advisor.

Investigation and/or criticism may have been more usefully brought against Trip Advisor itself for not requiring that the businesses it engages promise not to selectively solicit reviews. It is Trip Advisor that advertises itself as an independent and trusted source of accurate reviews for consumers while consumers are used to businesses like Meriton promoting their satisfied clients without mentioning their critics.

Interestingly the Trip Advisor website seems to have recently removed any reference to the reviews it publishes as being 'unbiased' – and instead the language it is currently using to promote its services has changed to focus on the reviews being 'candid' or 'genuine'. However, when Trip Advisor is inputted into the Google search engine the summary that is displayed still claims the following:

"World's Largest Travel Site. 385 million+ unbiased traveller reviews. ... possible itineraries and finds you the lowest fares the most often of any online flight finder."

The fine print in the Trip Advisor Terms of Use includes extensive disclaimers including:

"TripAdvisor takes no responsibility and assumes no liability for any Content posted, stored or uploaded by you or any third party, or for any loss or damage thereto, nor is TripAdvisor liable for any mistakes, defamation, slander, libel, omissions, falsehoods, obscenity, pornography or profanity you may encounter."

Despite the disclaimers there is no doubt that Trip Advisor represents itself to consumers as a source of reliable information about the quality of the businesses it publishes reviews about. Where consumers are relying on those reviews money is necessarily being directed away from one business toward another.

It appears arguable that it is Trip Advisor which has engaged in misleading consumers by not clearly requiring hotels like the Meriton to promise to send prompts for reviews to ALL of its guests.

The public interest the ACCC no doubt believes it is serving by policing the accuracy of online reviews would perhaps be better served if it took aim at the large online review businesses like Trip Advisor rather than making an example of one accommodation provider.
We will wait to see whether the cost and effort of this ACCC prosecution results in any real gains for consumers as we browse online trying to avoid staying at sub-standard hotels.

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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Murray Thornhill
 
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