ACCC warns businesses against fake online product reviews

The Australian Competition and Consumer Commission is addressing misleading conduct related to fake online reviews with the release new best practice guidance about online product reviews for businesses and review platforms.

The Australian Competition and Consumer Commission is addressing misleading conduct related to fake online reviews with the release of best practice guidance about online product reviews for businesses and review platforms.

Online reviews help consumers make informed decisions based on a range of third party consumer opinions. More consumers are relying on these reviews and a recent Sensis Social Media Report 2013 suggests that 74 per cent of social media users read online reviews before making a purchase. The ACCC says its new publication, Online Reviews: A Guide For Business And Review Platforms, follows extensive consultation with a wide range of consumer and industry representatives.

ACCC Deputy Chair Michael Schaper said many businesses rely on online reviews to promote their businesses, but some unscrupulous businesses are taking advantage of consumer trust in online reviews. The ACCC is concerned of an increase in paid for and fake reviews, with many consumers believing that reviews on various review platforms are the genuine experience or views of other consumers.

“Australian consumers have more choice than ever before, however with more options available, it is important that there is accurate and reliable information available to help consumers choose,” Schaper said. “Fake online reviews mislead consumers and hurt Australian businesses. Businesses that pay for or post fake reviews can gain an unfair advantage or damage their rivals.”

The new ACCC guidelines are intended to provide practical suggestions to platforms and reviewed businesses to help them reduce the risk of misleading consumers. The guidelines set out three core principles of conduct for businesses to abide by:

  • Be transparent about commercial relationships.
  • Don’t post or publish misleading reviews.
  • Remember that omitting negative reviews can be as misleading as posting fake reviews.

Penalties of up to $1.1 million are available to the Courts for misleading or deceptive conduct that breaches the Competition and Consumer Act 2010 (the Act). The ACCC has previously taken enforcement action against businesses in relation to misleading reviews and testimonials and the watchdog says it will continue to monitor the online reviews sector for contraventions of the Act.

As well as fake reviews, the ACCC is concerned about two other categories of misleading behaviour connected with online reviews. These are:

  • The manipulation of review results by review platforms as part of a commercial relationship between the platform and the reviewed business.
  • Businesses artificially inflating their review results by offering consumers generous incentives in exchange for reviews of their products or services.

 For further information, visit this ACCC webpage.

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