Online Reviews: Do Not Fake it Until You Make it

January 28, 2014 Published by

It’s Saturday night and you’re looking to try a new local restaurant, but which one? Smartphone in hand, you jump onto Yelp to assess the nearby options. You follow your app’s suggestion and try that new Japanese place with rave reviews.

A few weeks later you’re dreaming of a weekend escape, but where to stay? A quick visit to TripAdvisor and you know the top 10 accommodation options at your destination. You know which hotel has the plushest pillows and which serves the crispiest bacon at the breakfast buffet. You make your decision accordingly (you choose the bacon, obviously).

Image: Phil Campbell

Online consumer reviews have changed the way in which consumers make purchasing decisions. We increasingly rely on these review platforms to inform our buying habits. A recent Sensis Social Media Report 2013 suggests that 74% of social media users read online reviews before making a purchase. For this reason, the 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
  2. Do not post or publish misleading reviews
  3. The omission or editing of reviews may be misleading

The publication also provides more specific guidance for businesses and review platforms to follow, so that they can avoid engaging in misleading and deceptive conduct.

Review Platforms should:

  • disclose any commercial relationships between the review platform and reviewed businesses;
  • remove reviews known to be fake;
  • disclose any incentive which the platform offers in exchange for a review;
  • remove offensive, defamatory or irrelevant reviews;
  • refrain from selectively removing or editing negative reviews because of a commercial relationship with a reviewed business; and
  • provide reviewed businesses with an opportunity to post a public response to negative reviews.

Reviewed 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;
  • refrain from using platforms as a forum for personal reprisals against staff or business owners; and
  • follow the guidelines and exercise caution when offering incentives in exchange for reviews.

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 is serious about targeting fake or misleading reviews. 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.

The ACCC guidelines are available here.

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