Australian regulator comes down hard on fake online reviews

The Australian Competition and Consumer Commission (ACCC) has released a new major set of guidelines to eliminate fake online reviews.

The guidelines are intended for any Australian business that has reviews in their website, and also for review platforms.

They provide practical steps for brands to reduce the risk of misleading consumers, because many consumers believe that reviews on various review platforms are the genuine experience or views of other consumers.

According to a recent Social Media Report 2013 by Sensis, a whopping 74% of social media users read online reviews before making a purchase.

ACCC says that it is concerned about:

  • The increase in paid-for and fake-reviews
  • The manipulation of review results by review platforms as part of a commercial relationship between the platform and the reviewed business
  • Businesses artificially inflating their review results by offering consumers generous incentives in exchange for reviews of their products or services

The commission has in effect defined three core principles of conduct for businesses to abide by:

  • Be transparent about commercial relationships
  • Don’t post or publish misleading reviews
  • Remember that omitting negative reviews can be as misleading as posting fake reviews
[Detailed guideline can be accessed here]

For brands failing to comply by the guidelines, a penalty of up to $1.1 million is applicable.

ACCC deputy chair Michael Schaper says:

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

“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.

“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.”

Recently, Samoa Tourism Authority (STA) announced that users (if found guilty) who publish any false information that intends to harm the reputation of Samoa as a tourism destination can be fined not less than 50 penalty units, or an imprisonment term not exceeding three months, or both.

Tnooz spoke to Feedback Loop founder Sam Johnson about this new online review guidelines. Feedback Loop helps businesses promote trusted reviews and testimonials on their website an via social media.

Q&A with Johnson below.

Before this guideline, there was no rule on Australian businesses’ online review process?

Australian Consumer had a rule that businesses should not engage in misleading and deceptive conduct for a long time. The authorities have fined companies under this rule for using fake reviews.

However, there weren’t any specific guidelines about what the Australian Competition and Consumer Commission considers misleading, and best practices in relation to online review processes.

The new rule says businesses have to disclose commercial relationship with a review platform. For example: A hotel advertising in TripAdvisor should now disclose their commercial deal in the hotel’s website?

Under the guidelines, if the business’s commercial relationship with the review platform effects review results then there should be disclosure otherwise the business and/or platform risks misleading consumers.

We have seen lots of complaints about removals of negative reviews on TripAdvisor, but it’s unclear whether this happens more or less with hotels that also advertise with TripAdvisor.

Travel brands can tackle this new guideline by simply restricting the review section to people who bought products from the site?

Not necessarily, under the new guidelines these buyers can’t for example be friends or family, marketing agencies or people offered undisclosed incentive.

We know that in New York marketing companies have been caught writing fake reviews on behalf of companies.

A traveller booking a hotel from an OTA will be sent a customized link to their email after the stay, so that the person can write review about the hotel. A number of global OTAs do this. Why do you think travel brands aren’t implementing this?

Travel brands such as hotels and airlines should be encouraging their customers to give them feedback first.

Quite often they don’t do this due to technical challenges in automating the process.

Let me take my own example. Travel businesses clients of Feedback Loop love it because they get to deal with upset customers through feedback collected on their website first, rather than have them rant on social media or blast a negative review on TripAdvisor.

Feedback Loop connects reviews to social profiles, and detect fake reviews, so consumers know they’re more trusted. By doing this, we help make the whole review process easy and more authentic.

What other actions you think should be taken by the government to eliminate fake reviews?

Encourage review platforms to publicly disclose the efforts they undertake to detect fake reviews.

A lot of consumers are frustrated with sites like TripAdvisor as their efforts seem very inconsistent, fake reviews can remain, yet genuine negative reviews can be deleted.

Australia has been proactive introducing these guidelines, but we are yet to see guidelines about reviews released from other governments including the UK and US.

The most significant enforcement action around fake reviews has been in New York (19 companies fined for a total of $350,000) but this is still little in comparison to the detriment that fake reviews can cause.

We know from our tests that visibly linking reviews to a social identity can increase sales a lot. Fake reviews mean that consumers are less likely to make the right decision, and gives the wrong business an unfair advantage.

Governments alone can’t solve the problem, however,  review platforms and services like Feedback Loop play an important role in using technology to prevent and detect fake reviews.

NB: Review image via Shutterstock.

Share on FacebookTweet about this on TwitterShare on LinkedInEmail to someone
Karthick Prabu

About the Writer :: Karthick Prabu

Karthick was general manager for Tnooz in Asia until September 2014.



Comments are closed.


Newsletter Subscription

Please subscribe now to Tnooz’s FREE daily newsletter.

This lively package of news and information from Tnooz’s web site provides a convenient digest of what’s happening in technology that drives the global travel, tourism and hospitality market.

  • Cancel