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Consumer Law Update – November 2017

Home Insights Consumer Law Update – November 2017

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Contributed by: Sarah Keene, Troy Pilkington, Joe Edwards and Hannah Loke

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Published on: November 13, 2017

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Hindering consumers from posting negative online reviews is misleading conduct

In an age where consumers increasingly rely on online reviews in deciding which businesses to purchase from, it has been recognised for some time that it could amount to misleading/deceptive conduct for businesses to:

  • post fake favourable reviews online;
  • offer consumers incentives for favourable reviews; and/or
  • selectively delete unfavourable consumer reviews.

In an extension of that theme, the Australian Federal Court has found that a serviced apartment provider (Meriton Property Services Pty Ltd (Meriton)) engaged in misleading/deceptive conduct by taking steps to prevent guests it suspected would give an unfavourable review from receiving a prompt from TripAdvisor to provide online feedback.

Over a period of almost a year, Meriton's management directed staff, in relation to guests it suspected would give an unfavourable review (for example, if the hot water wasn’t working during their stay), to either:

  • change the guests' email addresses before they were provided to TripAdvisor; or
  • not send the email addresses to TripAdvisor.

Selected guests would therefore not receive an email prompt from TripAdvisor encouraging them to provide online feedback.

The Court concluded that these actions had created a more favourable impression of Meriton's accommodation on TripAdvisor, and was therefore likely to mislead the public as to the nature, characteristics and suitability of purpose of the accommodation.

This decision reinforces the nature and scope of conduct that can be regarded as misleading or deceptive conduct, and the importance of businesses not taking steps to try to skew the nature of their online feedback.

For more information, the Australian Competition & Consumer Commission's media release is accessible here.

If you have any questions about this update, or would like to discuss the implications for your business, please get in touch.

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