Online reviews: Do not fake it until you make it

While good online reviews can be a boon for businesses faking them can cost them more than just their reputation, Alison Eveleigh warns.

Online consumer reviews have changed the way in which we make purchasing decisions. A planned trip to new restaurant might be curtailed by a quick visit to Yelp or Urban Spoon. An entire holiday might be booked based only on Trip Advisor reviews. Understandably, brands and their marketing teams are concerned about online reputation. A recent Sensis Social Media Report 2013 suggests that 74% of social media users read online reviews before making a purchase.

With the rise of online reviews comes the temptation for brands to post fake reviews, pay for positive reviews or otherwise manipulate online content to ensure the best possible image in the minds of consumers. Even large organisations such as Samsung have fallen victim to this temptation, with the company fined by Taiwan’s Fair Trade Commission in October 2013 for paying individuals to post fake negative reviews about a competitor’s devices on the internet.

For this reason, the Australian Competition and Consumer Commission (ACCC) has placed a focus on maintaining the integrity of reviews and review platforms. In December, the ACCC released a set of best practice guidelines entitled ‘What You Need to Know About: Online Reviews – a guide for business and review platforms’. The guidelines set out three guiding principles:

  1. Be transparent about commercial relationships;Alison Eveleigh (1)
  2. Do not post or publish misleading reviews; and
  3. The omission or editing of reviews may be misleading.

Under the Competition and Consumer Act 2010 (Cth), organisations face penalties of up to $1.1 million if they are seen to be engaging in misleading or deceptive conduct, and the ACCC has demonstrated that it is serious about targeting fake of misleading reviews. A number of Australian companies have been already been fined.

In 2011, removalist company Citymove Pty Ltd, owner of the review website www.movingreview.com.au, knowingly published reviews on this site that purported to be prepared by genuine consumers when in fact they were not. The ACCC found the testimonials were copied from an unrelated review website, and details such as the username of the consumer, the star rating and the name of the removalist company were altered. Citymove failed to have in place procedures to ensure the accuracy of the copied testimonials and allowed the website to go live in the knowledge that errors existed on the website. The company was fined $6,600.

Most recently, in January this year, the Federal Court ordered that P & N Pty Ltd and P & N NSW Pty Ltd (trading as Euro Solar) and Worldwide Energy and Manufacturing Pty Ltd (WEMA, formerly trading as Australian Solar Panel) pay combined penalties of $125,000 for publishing fake testimonials and making false or misleading representations about the country of origin of the solar panels they supply.

These examples demonstrate that business must exercise extreme caution when dealing with online review content. The ACCC publication provides specific guidance for both businesses and review platforms, so that they can avoid engaging in misleading and deceptive conduct.

Reviewed Businesses

As Samsung learnt the hard way, businesses should refrain from soliciting others to write reviews about their business or a competitor’s business if they have not experienced the goods or services. This conduct is considered misleading. Further, business should exercise caution in offering incentives in exchange for reviews. If there is a commercial arrangement in place between the business and the reviewer/review platform, this should be clearly disclosed to consumers to avoid been seen as misleading or deceptive.

Review Platforms

Equally, review platforms must disclose any commercial relationships between the review platform and reviewed businesses, and any incentives offered to reviewers. Review platforms also have an obligation to maintain the integrity of the content posted to their sites. For example, the platform should remove reviews known to be fake, and also remove any offensive, defamatory or irrelevant reviews as soon as they are detected. However, the platform must not selectively remove or edit negative reviews because of a commercial relationship with a reviewed business. Instead, the ACCC recommends providing reviewed businesses with an opportunity to post a public response to negative reviews.

The ACCC guidelines are available here.

Alison Eveleigh is a solicitor at von Muenster Solicitors & Attorneys



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