Consumers are increasingly turning to online reviews to help them make purchasing decisions. Due to this growing trend, the Australian Competition & Consumer Commission (ACCC) has produced an online review best practice guide for businesses and review platforms. The ACCC's key concern is that businesses and review platforms manage online reviews to prevent consumers from being misled, in particular by fake online reviews.
Positive online reviews can help promote a business and potentially help that business reach new clients. For businesses in need of a low-cost marketing strategy, encouraging clients to write genuine online reviews – their customers' "word of mouth" – may be the only means to promote their services or goods.
Consumers are also increasingly relying on online reviews for information before making a decision to purchase. Because of this trend, the Australian Competition & Consumer Commission (ACCC) has released a guide for businesses and review platforms on online reviews.
The best practice guide aims to address a key concern of the ACCC: misleading conduct relating to fake online reviews. Some unscrupulous businesses are taking advantage of customer trust in online reviews, the ACCC said. As more consumers are relying on these reviews, it is important that there is accurate and reliable information for consumers.
The publication, Online reviews: a guide for business and review platforms is the result of extensive consultation with a wide range of consumer and industry representatives. In particular, the guide provides practical suggestions to platforms and businesses to help them reduce the risk of misleading consumers.
The guidelines set out three core principles of conduct for businesses:
- be transparent about commercial relationships;
- don't post or publish misleading reviews; and
- omitting negative reviews can be as misleading as posting fake reviews.
"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," said ACCC Deputy Chair Dr Michael Schaper.
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 said it 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.
In addition to fake online reviews, the ACCC said it was also concerned about:
- 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.
The guide (published on 3 December 2013) is available on the ACCC website .
Tips for businesses
The ACCC considers conduct such as the following to be misleading.
- Don't encourage family and friends to write reviews about your business without disclosing their personal connection with your business in that review;
- Don't write reviews when you have not experienced the goods or services reviewed or which do not reflect a genuinely held opinion;
- Don't solicit others to write reviews about your business or a competitor's business if they have not experienced the goods or services.
Need to know more?
If you would like to know more, please don't hesitate to contact Robert Goodman Accountants on 07 3289 1700.
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