Following a year-long investigation, the ACCC on Thursday commenced proceedings against Meriton in the Federal Court in Melbourne. Meriton is alleged to have breached s18 of the Australian Consumer Law by engaging in misleading or deceptive conduct in relation to online reviews published on the TripAdvisor travel website. No allegation is made against TripAdvisor.
TripAdvisor offers a service for businesses where it sends automated emails to their recent customers inviting them to post a review. This service requires businesses to send TripAdvisor the email addresses of their customers who have consented for their details to be passed on.
The ACCC alleges that Meriton provided incorrect email addresses for those customers who it suspected would give negative reviews by inserting additional letters into the email addresses so that TripAdvisor was unable to contact them.
It is alleged that by engaging in this conduct, Meriton sought to tamper with TripAdvisor’s review process to limit the number of negative reviews it received and artificially inflate its overall review rating.
The ACCC is applying for a range of orders including pecuniary penalties, declarations, injunctions and corrective advertising. The maximum pecuniary penalty per contravention is $1.1m for corporations and $220,000 for individuals. It is open to the court to find that each instance of conduct (each time Meriton provided an incorrect email address) was a separate contravention, thus leading to a much higher theoretical maximum.
Meriton has stated that it intends to defend the proceeding. The case will first go before the Court on 9 December 2016.
Online reviews and testimonials continue to be a priority area for the ACCC. As we have previously blogged, the ACCC recently published guides for online platform operators and traders in the sharing economy. The ACCC and state ACL regulators all stress that businesses should not seek to manipulate the online reviews that are published about them, whether by posting fake reviews about themselves or their competitors, offering incentives for positive reviews or rejecting negative reviews.
Huge reliance is placed on online reviews by consumers. These proceedings make clear that the ACCC will not accommodate any review-related conduct by businesses which gives them an unfair advantage over their competitors.