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Online product reviews, new ACCC guidelines released

More and more consumers are heading online to check reviews of products and services before making a purchase. The recent Sensis Social Media Report 2013 provides that 74% of social media users read online reviews before making a purchase. However, while online reviews play an important role in consumer decision-making, there has been growing concern over misleading conduct by review providers and reviewed businesses. In particular, the Australian Competition and Consumer Commission (ACCC) have raised concerns about three categories of conduct related to online reviews, namely:

  • Fake reviews;
  • Results manipulated by a review provider as part of a commercial arrangement between the review provider and the reviewed business; and
  • Businesses artificially inflating their review results by incentivising consumers to write reviews for their products or services.

In response to these concerns, the ACCC has released a set of best practice guidelines titled What You Need To Know About: Online reviews – a guide for business and review platforms. The guidelines are for businesses and review providers and they set out three core principles for businesses to follow:

  • Be transparent about commercial relationships;
  • Don’t publish misleading reviews; and
  • Omitting negative reviews can be as misleading as posting fake reviews.

It is clear from the ACCC guidelines that the posting or commissioning of fake reviews by businesses will be in breach of the Australian Consumer Law. Penalties of up to $1.1million are available to the courts for such breaches and the ACCC has previously undertaken successful court action against businesses in relation to misleading reviews. The new guidelines provide practical guidance for businesses looking to ensure they comply with the requirements of Australian Law.