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Online Reviews: What You Need To Know

As published by MyBusiness Magazine
The increasing prevalence of online reviews and their use by consumers has led the Australian Competition and Consumer Commission (ACCC) to release a set of best practice guidelines for businesses titled What You Need To Know About: Online reviews – a guide for business and review platforms.
While the ACCC has noted that the increasing use of online reviews is a positive development in releasing the guidelines to highlight its commitment to ensuring online reviews are compliant with Australian Law.  Specifically the ACCC is responsible for enforcing the Competition and Consumer Act 2010 (the Act), which includes the Australian Consumer Law (ACL). The Act prohibits misleading, deceptive and anti-competitive conduct by corporations carrying on business in Australia.
The ACCC has released the best practice guidelines in response to concerns that the actions of some businesses in relation to online reviews may be in contravention of the Act.
The guidelines set out three core principles to help businesses comply with their obligations under the Act:

  • Be transparent about commercial relationships;
  • Don’t publish or post misleading reviews; and
  • Omitting or editing negative reviews may be misleading.

While disclosure of commercial relationships is not specifically prohibited under Australian law, commercial relationships between review platforms and reviewed businesses and/or reviewers may lead to an unfair competitive advantage between competing businesses. Improper constraint of competition in the market for reviews or related markets will be in contravention of the Act and likely to attract enforcement action from the ACCC.
Furthermore, reviews may mislead consumers when they are presented as impartial, but were in fact, written by an individual who has a relationship with the reviewed businesses. In these circumstances, prominent disclosure of any relationship is likely to improve the potential for such reviews to mislead. Importantly, the ACCC has also indicated that omitting or editing reviews, particularly when this has an effect on the aggregate rating given by a review platform, may also amount to misleading conduct.
The ACCC highlights a range of businesses in the guidelines that need to be aware of the requirements of Australian Law. Internet sites or software tools (e.g. apps) that publish reviews about goods, services or businesses, and whose primary audience are consumers seeking information to inform purchase decisions, must ensure their practices are compliant with Australian Law. The ACCC has also indicated that blogs or other sites that publish reviews as part of discussion threads, or in other non-traditional formats, are often used by consumers to inform decisions. Therefore, compliance with the ACL is required in these circumstances also.
The ACCC has previously taken action against companies for the posting of fake and misleading customer testimonials and has indicated its intention to continue to do so. The recently published guidelines provide online business’s with a valuable reminder that Australian Law follows them into the online space and that no-compliance brings with it significant risk.
Are your online reviews guiding you in to legal trouble?