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A best practice guideline on online reviews and testimonials is being developed by the Australian Competition and Consumer Commission.
It comes as health insurance fund nib has launched its Whitecoat website, which includes patient reviews ranking service and prices of ancillary health providers.
An ACCC spokesperson said the guideline would be developed in consultation with industry and consumer groups, and would be directed towards review platforms, reviewed businesses, and marketing and public relations companies that seek to use reviews for promotional purposes.
‘The use of fake online reviews as a marketing tool is a priority issue for the ACCC,’ the spokesperson said.
‘The ACCC is engaging with key stakeholders in the online space, and where appropriate, using its powers to investigate and take action against businesses engaging in this conduct.
‘Australian consumers are increasingly relying on online consumer reviews to inform their purchasing decisions. A great deal of trust is often placed on these reviews, particularly when they are on websites that purport to be independent from product manufacturers or retailers.’
The spokesperson said that fake reviews pretended they were the honestly held opinion of a purchaser of the product or service, when they were not.
‘They may be made by the manufacturer or retailer of the product, or by a business engaged to market the product,’ the spokesperson said.
‘The use of fake reviews also harms competitors who do the right thing by not manipulating user reviews of their products. Review platforms should have appropriate mechanisms in place to deal with the concerns of consumers and reviewed businesses.’
The ACCC’s focus is on fake reviews that are used to enhance the reputation of a business, particularly in situations in which a website ranks businesses based on customer rankings, and are used by businesses to gain a competitive advantage by placing online negative reviews about their competitors.
‘If a business uploads reviews about itself or about its competitors and presents those reviews as having been written by impartial consumers, the business is engaging in misleading and deceptive conduct in contravention of the Australian Consumer Law,’ the spokesperson said.
Under the Australian Consumer Law, the ACCC can issue an infringement notice where it has reasonable grounds to believe that a person has contravened certain consumer protection laws.
For serious conduct, the ACCC can seek court penalties. The maximum penalty is $220,000 for an individual and $1.1 million for a body corporate, per breach of the Australian Consumer Law.
Related reading:
How to turn Bad reviews in social media into Good news