The Australian Competition and Consumer Commission is addressing misleading conduct related to fake online reviews, by releasing best practice guidance about online product reviews for businesses and review platforms.
"Online reviews are an increasingly popular resource for consumers purchasing goods or services. Many businesses rely on these reviews to promote their businesses, however, some unscrupulous businesses are taking advantage of consumer trust in online reviews," ACCC Deputy Chair Dr Michael Schaper said.
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% of social media users read online reviews before making a purchase.
The publication, Online reviews: a guide for business and review platforms follows extensive consultation with a wide range of consumer and industry representatives.
"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," Dr Schaper said.
The ACCC is concerned that there is an increase in paid for and fake reviews. Many consumers believe that reviews on various review platforms are the genuine experience or views of other consumers.
"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," Dr Schaper said.
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, and
- 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 which 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 will continue to monitor the online reviews sector for contraventions of the Act.
The guidelines are intended to provide practical suggestions to platforms and reviewed businesses to help them reduce the risk of misleading consumers.
"Fake online reviews are in breach of the Australian Consumer Law and businesses are advised not to write or commission reviews about their own business or a competitor's business which are misleading," Dr Schaper said.
As well as fake reviews, the ACCC is concerned about two other categories of misleading behaviour connected with online reviews. These are:
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- the manipulation of review results by review platforms as part of a commercial relationship between the platform and the reviewed business; and
- businesses artificially inflating their review results by offering consumers generous incentives in exchange for reviews of their products or services.