ACCC says rise in fake online reviews

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The Australian Competition and Consumer Commission (ACCC) has recorded an increase in bogus online reviews.

Specifically it has noted an increase in paid for and fake reviews. It says this conduct is potentially ill-informing consumers who believe reviews on various platforms are the genuine experiences of other consumers.

As a result, the ACCC has announced it will release a set best practice guidelines for conducting online product reviews.

“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,” ACCC Deputy Chair Dr Michael Schaper said.

The recent Sensis Social Media Report 2013 found that more consumers than ever are reading online reviews before making a purchase. The research suggested that some 74 per cent of social media users actively seek online reviews.

“Many businesses rely on these reviews to promote their businesses, however, some unscrupulous businesses are taking advantage of consumer trust in online reviews,” Schaper said.

The new resource is published by the ACCC and is called Online reviews: a guide for business and review platforms, and sets our 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 have been dolled out by the Courts in relation to breaches of the Competition and Consumer Act 2010 for misleading reviews and testimonials.

“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,” Schaper said.

As well as fake reviews, the ACCC has cautioned businesses around other types of misleading behaviour connected with online reviews:

  • 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.

Further information on managing online reviews is available here.

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