BREAKING NEWS:Actions Of CE & Appliance Industry Questioned By ACCC 73% Of Influencer Tech & Gaming Reviews Dodgy

Consumer electronics and appliance, Companies as well as their PR Companies and digital engagement agencies, who have engaged dodgy influencers, who tend to spruik anything they are paid for in a positive light, have caught the attention of the ACCC who today released a report that exposes massive problems as well as the credibility of marketers working for CE gaming and appliance Companies.

Most of the exposed influencers were dobbed in by consumers who after seeing an influencer review, bought a product and then found it was not as good as the influencer claimed.

The sectors with the highest proportions of potentially fake or misleading online reviews were household appliances and consumer electronics companies, beauty products, and home improvement and household products.

As for PR and digital marketing Companies the ACCC reviewed 24 businesses that offered services to create fake reviews, remove negative reviews and prevent or edit negative reviews.

The ACCC’s recent internet sweeps of social media influencers, and online reviews, has found some seriously dodgy practises with several brands including Samsung, LG Electronics, HP, Hisense, in the past flying in influencers they have paid, for local and international launches in the expectation of a favourable review of a product which in some cases professional reviewers have found to have problems.

“The next steps in our continuing scrutiny of these important parts of the online economy include developing strong guidelines for online operators so they clearly know what we expect, before a renewed focus on enforcement,” ACCC Acting Chair Catriona Lowe said.

“Influencers and businesses need to review their practices and improve compliance with the Australian Consumer Law to ensure consumers can trust the information they find online.”

Of the 118 social media influencers reviewed in the ACCC’s influencer sweep, 81 per cent were found to be making posts that raised concerns under the Australian Consumer Law for potentially misleading advertising.

At this stage, the brands many of them leading global Companies have not been exposed by the Australian Competition & Consumer Commission.

The ACCC sweep reviewed influencers across seven sectors including consumer electronics and appliances, with most influencers in each sector making concerning posts.

73 per cent of gaming and technology influencer posts were found to be questionable.

Brands such as Sony PlayStation, Nintendo and Microsoft’s Xbox have not commented on whether the ACCC has spoken to them regarding their use of influencers.

“Influencers often cultivate an image of themselves as being relatable and genuine, which can create an element of trust with their followers when it comes to recommendations,” Ms Lowe said.

“Based on the findings of our sweep, we are concerned that influencers, brands and advertisers are taking advantage of consumers’ trust through hidden advertising in social media posts by influencers.”

The sweep reviewed influencers on Instagram, TikTok, Snapchat, YouTube, Facebook, and the livestreaming service, Twitch.

The majority of influencers reviewed had large followings, however the sweep included some influencers with smaller followings.

The most common issue identified in the sweep was influencers not disclosing brand relationships in their posts.

“Many of the influencers we reviewed did not make adequate disclosures in their posts where it appeared they were receiving payment, gifts or other incentives to promote brands, products or services,” Ms Lowe said.

Another common issue was influencers using vague or confusing language to disclose advertising, such as ‘sp’ and ‘spon’ instead of ‘sponsored.’

“We found that many influencers were formatting their posts to hide their advertising disclosure or make it difficult for consumers to notice it.”

“Under the Australian Consumer Law, businesses must not mislead or deceive consumers.

This applies to influencers engaging in trade or commerce, as well as brands and marketers using influencers to advertise online.”

“Influencers and brands may break the law if they do not take reasonable steps to ensure consumers are not misled to believe that sponsored posts are genuine.”

As a result of the investigation brands are set to face new laws and regulations relating to the use of influencers.

The ACCC said that they release guidance in early 2024 for influencers and businesses to remind them of their obligations under the Australian Consumer Law.

Influencers many who are seen as being questionable at the best of times have been reminded by the ACCC that they should:

Ensure they clearly disclose a promotional post in a way that is immediately obvious to consumers. This includes instances where the influencer has received free products, tickets or any other gifts or incentives.

Never make misleading claims about a product. This means that influencers cannot misrepresent their experience with a product.
Not use manipulative or deceptive advertising practices.

As for brands in the consumer electronics audio, gaming, and appliance markets, the ACCC has warned that these businesses need to be aware of their Australian Consumer Law obligations when promoting their products or services.

The issue also applies to public relations Companies who are charging hundreds of dollars an hour to find and then engage with influencers, and then write their scripts and in many cases the copy appearing in an influencers blogs and social media feeds.

Both brands and PR Companies have been warned to be careful when providing influencers with scripts to follow when making posts.

Scripts should never require influencers to misrepresent their experience or views on a product.

“The ACCC will continue to monitor influencers and businesses and where we see continued non-compliance we may take enforcement action,” Ms Lowe said.

Businesses found to be manipulating online reviews.
In a separate internet sweep to identify fake or misleading online reviews, the ACCC found that 37 per cent of the 137 businesses reviewed had engaged in concerning conduct.

“Our sweep indicates that some businesses are manipulating online reviews to present a more favourable impression of their business to consumers,” Ms Lowe said.

“Misleading reviews cause considerable harm to consumers who increasingly seek out and rely on online reviews to help them make a purchase.”

The sectors with the highest proportions of potentially fake or misleading online reviews were household appliances and electronics, beauty products, and home improvement and household products and services.

The sweep found a prevalence of businesses using third-party professional reviewers and review removalists as a tool to manage their online reputation.

The ACCC reviewed 24 of these businesses that offer services to create fake reviews, remove negative reviews and prevent or edit negative reviews.

The sweep found that some third-party review management services enable review manipulation by encouraging businesses to choose which reviews to publicly display. This includes directing customers with positive experiences to post a public review, while referring those with negative experiences directly to the business.

“Businesses that seek to create fake reviews or edit or remove genuine negative reviews, with the intention of inflating their own ratings, lowering their competitors’ ratings, or hiding genuine negative reviews from the public, are in breach of the Australian Consumer Law,” Ms Lowe said.

“Whilst it may be important to businesses to manage their online reputation, they need to ensure that in doing so they are not misleading consumers.”

“The ACCC will continue to monitor businesses that offer services to facilitate the manipulation of consumer reviews, including the removal, blocking or prevention of legitimate consumer reviews about a product, service or business.”

The sweep also found that most businesses and third-party review platforms were not disclosing whether reviews were incentivised and did not require reviewers to disclose whether they had received a benefit or incentive for submitting a review.

“Businesses that do not disclose incentivised reviews are likely to mislead consumers as it presents incentivised reviews as impartial when they are not,” Ms Lowe said.

“Many businesses reviewed also appear to have fake positive reviews on their website or third-party review platforms, which is in contravention of the law.”

Some signs for consumers that positive reviews may be fake include:

• a spike in highly positive reviews about the business over a short period of time
  multiple reviews written by the same reviewer.
  generic reviews without individualised or specific detail about the business or product
  reviews written in similar language as other reviews for the same business or product.
  reviews on the business’ website being overwhelmingly positive while on third-party platforms there’s a mix of reviews for the business.
  “The findings of our online reviews sweep will inform our education, compliance and enforcement activities with businesses, including producing updated guidance material for businesses and review platforms.”

“We will also develop educational material for consumers to help them identify potentially fake or misleading online reviews,” Ms Lowe said.