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Online reviews affect platform operators in the sharing economy and consumers looking to scope out a business’ credibility. Importantly, Australia’s competition and consumer laws apply to online reviews, and businesses should understand their obligations regarding the moderation or commission of reviews. We guide through the principles that govern the online realm of ratings, reviews and feedback.

1. Disclosing the Online Review Processes

Explaining the process in which your business publishes and moderates reviews provides consumers with a better understanding of the source and circumstances in which someone posts a review. Consumers can then avoid purchasing a mediocre service or product and businesses can limit the possibility of any claims against misleading or deceptive conduct.

2. Publishing Reviews

Businesses who publish false or misleading reviews are potentially liable, even if they did not make the false or misleading claim. The law may associate a business who publishes a review with the same representation the reviewer made, particularly if they are the moderator. Some businesses may disclose the review process, as noted above, and include disclaimers as a way to limit their responsibility for third party reviews. All businesses should be wary that the effect of a disclaimer may not be enough to absolve their responsibilities.

3. Tactics to Undermine Competitors

A competitor can undermine a business through fake online reviews (e.g. encouraging a consumer to use their business instead). However, the law will consider this behaviour misleading or deceptive because it may influence a consumer’s mind to choose one business over another based on false information. In the same way, the law will consider a fake review written about your own business as misleading or deceptive conduct.

4. Moderation of Reviews

Ultimately businesses should know their obligation to moderate reviews and put in place systems and processes to ensure that they undertake this moderation on a regular basis. Failing to moderate your reviews exposes you to the risk of unintentionally endorsing misleading and false information. When moderating reviews, you should also take care not to paint a fake picture of your goods and services. For example, it is not advisable to delete all negative reviews, or only prioritise positive reviews.

Here are some tips to take into consideration to ensure your business avoids claims of any misleading or deceptive conduct:

  • Publish reviews according to the time at which you receive them;
  • Do not amend, delete or re-order reviews so that a consumer will get a false impression of the product or service;
  • Remove fake reviews and do not publish fake reviews against other businesses;
  • Work out a process whereby you can analyse reviews to determine their validity;
  • Provide details of how your rating system works and how a consumer may come to the rating; and
  • Moderate any disputes (in the case where a platform allows traders and consumers to interact directly).

The above points are best practice tips to ensure that online businesses are not set up to mislead or deceive consumers. As online businesses become a prominent method for consumers to interact and assess businesses, the justification behind 5-star reviews will need to be equally scrutinised.

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Are you operating a business and unsure whether you meet your compliance requirements? Get in touch with our consumer lawyers on 1300 544 755 or fill out the form on this page.

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