Online web sites selling technology and appliance products off the back of a so called “good review” that are often based on an unknown user name or questionable email address are now under investigation by the Australian Competition and Consumer Commission.
The move is part of a crackdown on dodgy reviews generated by small business, large Corporations who use staff to write questionable reviews and rankings for products as well as organisations who approach vendors selling favourable reviews.
The ACCC said that they are now assessing the review policies of sharing economy platforms as part of an international initiative targeting online reviews and endorsements.
The reviews involves over 50 consumer protection agencies around the world.
This year the focus of the sweep is ‘Online Reviews and Endorsements’ and the ACCC will be focusing on the way in which reviews operate in the sharing economy.
The Australian Consumer Law prohibits businesses from making or inducing false or misleading representations through testimonials or reviews. The ACCC has produced guidance for businesses regarding online reviews and has taken enforcement action against businesses that have done the wrong thing.
In July 2015, Citymove Pty Ltd paid penalties totalling $30,600 following the issue of three infringement notices relating to allegations that Citymove used fabricated customer identities to post two testimonials on Google+ and one testimonial on YouTube.
In December 2015, the Federal Court in Sydney ordered the franchisor of the Electrodry Carpet Cleaning business, A Whistle & Co to pay total penalties of $215,000 for its involvement in the publishing of fake testimonials on the internet.
“The ACCC has three clear messages for businesses handling online reviews. Be transparent about commercial relationships and don’t let these influence the order in which reviews are published, don’t post or publish misleading reviews, and editing or deleting unfavourable reviews may be misleading,” ACCC Deputy Chair Delia Rickard said.
The ACCC has also looked closely at the consumer law issues involved in the sharing economy, where a platform connects providers and users, both of whom are usually individuals or small businesses. Reviews and ratings can play a large role for both providers and users in the sharing economy.
“The sharing economy is a fantastic development and offers a range of benefits for consumers and businesses. However, operators of sharing economy platforms must make sure that they have appropriate policies to regulate the use of reviews to avoid misleading consumers,” Ms Rickard said.
The ACCC is sweeping a range of platforms to find out what platforms are disclosing about their policies for publishing reviews and ensuring that reviews, and the way they are presented, are accurate and don’t mislead consumers.
The sweep will provide information to assist the ACCC’s engagement with the sector, including guidance for businesses and individuals involved in the sharing economy which will be released later this year. The information will also be shared with the ACCC’s ICPEN partners, as well as to the Australian state and territory consumer protection agencies.
