Building on ACL enforcement: ACCC action on online reviews

Published On 21/03/2017 | By Isabelle Youssef | Consumer protection, Enforcement, Litigation

The ACCC’s commencement of proceedings against Western Australian building company Aveling Homes Pty Ltd (Aveling) reflects the ACCC’s growing concern with the misuse of online reviews of goods and services.

Aveling allegedly:

  • created misleading review websites that were designed both to appear independent of Aveling and to be associated with third party review website, Product Review (Product Review is an independent website that publishes consumer reviews on Australian products and services); and
  • cultivated these review websites by concealing or removing negative reviews.

The ACCC’s proceedings relate not only to Aveling but also to Aveling’s marketing manager, Sean Quartermaine, on the basis that he was knowingly involved in the company’s conduct. Aveling has issued a statement that the company and Quartermaine “deny any wrongdoing, and will fiercely defend all the allegations made against them in court.” Aveling’s role as a home building company clearly influenced the ACCC’s decision to prosecute, with ACCC Deputy Chair Dr Michael Schaper stating:

We believe the potential for harm from the conduct alleged in this case is significant, as buying or building a home is one of the biggest purchasing decisions for Australians

Previous ACCC proceedings

The Aveling case is not the first time the ACCC has examined conduct regarding online reviews:

  • In early 2016, the ACCC targeted solar energy company True Value Solar for offering an incentive (a free solar panel service worth $199) only to customers likely to write positive reviews. The investigation was triggered by a complaint made by a consumer to the ACCC about an increase in positive reviews of True Value Solar on Product Review sparked the ACCC investigation. As a result, True Value Solar discontinued its program of incentivising customers to publish online reviews.
  • In November 2016, the ACCC commenced legal action with respect to online reviews against Meriton for breach of s 18 of the Australian Consumer Law (see our blog post about these proceedings here). The ACCC alleged that it was misleading and deceptive for Meriton to provide incorrect customer email addresses to TripAdvisor (who would then email customers asking them to provide a review) where the customer might write a negative review. The case is ongoing.

ACCC guidance on online reviews

As previously blogged, in November 2013 the ACCC released a guide about online reviews.

The ACCC guide targets both businesses and the review platforms themselves, and emphasises:

  • the need for transparency as to any commercial relationships (including with reviewers and the review platform;
  • the importance of the accuracy of reviews; and
  • the obligations obligations that apply to both companies and review platforms (such as Product Review and TripAdvisor) to remove fake reviews.

The rules in the guide apply to reviews published on company websites and to reviews on blogs or discussion threads. Companies are advised to disclose any relationship between the business and review platform that may impact upon the reviews, are prohibited from writing their own reviews and are provided with guidance on lawfully incentivising consumers to write reviews.

The ACCC’s action against Aveling signals the ACCC’s continued focus on online reviews. Such prosecutions are unsurprising given the importance of online information to modern consumers, and companies should be cautious in their dealings with review platforms and prospective reviewers.

Written by Isabelle Youssef and Peta Stevenson

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About The Author

is a law clerk in the competition litigation team in the Sydney office of King & Wood Mallesons

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