A steady stream of favourable guest reviews on the TripAdvisor website is a proven way to build a hotel business.
Hotel managers will do whatever it takes to encourage guests to post positive reviews on the TripAdvisor website by providing excellent service and accurate descriptions of the room and facilities. They will apologise, upgrade the room and compensate guests to avoid negative reviews, but will not try to block bad reviews so long as the reviews are fair.
Meriton Serviced Apartments provides accommodation at its 13 high rise properties in Queensland and New South Wales.
To avoid negative reviews, Meriton manipulated the TripAdvisor review system by supplying wrong email addresses to TripAdvisor if the guest was unhappy or had complained, and by not supplying any guest email addresses at all if there was a major service disruption.
In Australian Competition and Consumer Commission v Meriton Property Services Pty Ltd  FCA 1305 (10 November 2017), Justice Moshinsky in the Federal Court of Australia found that Meriton’s practice of selectively blocking guest reviews was misleading and deceptive and contravened the Australian Consumer Law. The decision is analysed in this article.
How does the TripAdvisor review system work?
The TripAdvisor website platform is the world’s largest review site for accommodations, restaurant and attractions: it contains 570 million reviews which are read by 455 million unique visitors each month. It is a free service.
Each of the 7 million properties reviewed has their own page. Guests and visitors post written reviews online, with ratings for value, location, room quality and cleanliness. From these reviews, TripAdvisor compiles for each property:
- An overall rating with 5 ‘bubbles’ the highest.
- A ranking of properties of a given type in a particular area, using a property ranking algorithm, based on the quality, recency and quantity of reviews.
TripAdvisor warns businesses against ‘fraudulent practices’, particularly posting their own reviews or offering incentives in exchange for good reviews. In its usage terms, it warns against ‘Selectively soliciting reviews only from guests who have had a positive experience’ and ‘Prohibiting guests from posting negative or critical views of their experience’.
TripAdvisor imposes penalties for failing to observe its usage terms, ranging from a warning, to reducing the ranking, to adding a red badge to the property listing (to warn the public).
How did Meriton manipulate the TripAdvisor review system?
TripAdvisor has a ‘Review Express’ service which is a free service designed to prompt guest reviews. The hotel sends the guest email addresses to TripAdvisor, who then emails review ‘prompts’ to those guests who have consented to receive emails. When the review is received it is posted with the notation “Review collected in partnership with this hotel”. According to TripAdvisor, ‘Review Express’ can boost numbers of reviews by 33 per cent on average.
The ‘Review Express’ guidelines state: avoid selectively e-mailing only the guests you believe will write positive reviews; ‘Review Express’ emails should be consistently sent to all guests.
Meriton used ‘Review Express’. It was a great success. On average, each property received 55 reviews per month, a large increase from 23 reviews per month before ‘Review Express’ was introduced. As a result, there was an increase in ranking: for example, Meriton World Tower increased from a rank of 7 out of 188 to 3 out of 183, and 5 of its properties were ranked # 1 in their area.
Meriton management was concerned that unfavourable guest reviews would bring down the rankings of its properties. Instead of using recognised channels to remove unfair reviews (refer to my article What law applies to remove fake online travel reviews?), Meriton decided to manipulate the ‘Review Express’ service by selectively withholding from TripAdvisor, the email addresses of guests likely to complain of poor service.
It implemented two practices:
1. The MSA-masking practice
Meriton’s standard operating procedure at check-out was:
Ask guest if they enjoyed their stay, if positive pass a Trip advisor feedback card to guest requesting them to post feedback online and if negative mask guest email by adding MSA to the beginning of guest email address and discuss concerns. (Emphasis added.)
The check-out form the staff signed stated:
I understand that should I not follow this standard correctly that disciplinary action will occur.
Note: adding ‘MSA’ (i.e. Meriton Serviced Apartments) to the guest’s email address made it invalid: the guest would not receive the ‘prompt’ email from TripAdvisor.
Later on, Meriton introduced a new property management system. The staff were required to mark the ‘TA Mask’ field in the booking:
if the guest mentions any issue during their stay even if we have resolved it prior to checkout.
The email addresses for guests marked in ‘TA Mask’ field were not passed on to TripAdvisor.
Examples of service ‘issues’ are: credit card surcharge fees, aircon not working, lost property, room moves (noise complaints), Wifi connection issues/limit, room not ready and key card not working.
Between 1 April 2015 and 31 December 2015, 14,584 email addresses were masked, overwhelmingly of guests who were unhappy at check-out or who had complained.
2. The bulk withholding practice
Meriton withheld from TripAdvisor the email addresses of all guests who had stayed at a particular property during a period when there was a major service disruption.
Examples of major service disruptions are: lifts out of service (due to heavy rain), lift delays, phone lines down, no hot water in the hotel, computer issues affecting service for guests, evacuation of a floor due to gas leak, lost power, excessive construction noise next door.
The Meriton staff admitted that these practices were implemented because they were instructed to do so, to reduce the likelihood of negative reviews appearing on TripAdvisor.
The Australian Consumer Law proceedings
In October 2015, Meriton’s practices became public. TripAdvisor contacted Meriton about “Review Express Usage Anomalies”. Meriton obfuscated by explaining the masking policy applied in “extreme” circumstances only. TripAdvisor suspended Meriton from using ‘Review Express’ for breaching its usage terms/guidelines. By January 2016, the fall in numbers of reviews posted led to drops in rankings. ‘Review Express’ was reinstated in March or April 2016.
In December 2015, the Australian Competition and Consumer Commission (ACCC) became involved, as the regulator responsible for enforcing the Australian Consumer Law. It instituted the proceedings on 24 November 2016.
The Court held that Meriton had contravened sections 18 and 34 of the Australian Consumer Law, from November 2014 to October 2015, for these reasons:
- The reviews of Meriton’s properties were concerned with quality or amenity, such as cleanliness of the rooms, the quality of the service, as well as location, bedroom layout and availability of parking. Section 34 deals with these issues because it prohibits misleading conduct ‘as to the nature, the characteristics, the suitability for their purpose … of any services’.
- The MSA-masking and the bulk withholding practices were likely to mislead or deceive consumers who ‘consult the TripAdvisor website to … obtain information about accommodation options’ because although ‘Meriton was soliciting reviews from many guests who had stayed at its properties’ it was not soliciting reviews ‘from those considered likely to write negative reviews.’
- The practices improved ‘the relative number of favourable reviews compared to unfavourable reviews’ which ‘created a more positive or favourable impression of the quality or amenity of the Meriton properties on the TripAdvisor website’.This was misleading conduct because the website pages were ‘incomplete and inaccurate, or unduly favourable’.
- ‘The vast scale of the MSA-masking’ accentuated this impression and created ‘an actual probability that members of the public were misled as to the characteristics and suitability for purpose of the accommodation services provided by Meriton at the properties’, and to choose them in preference to others.
This is the first time an Australian company has been pursued for ‘gaming’ TripAdvisor reviews.
The Federal Court’s decision means that the Australian Consumer Law can be used to maintain the integrity of travel, hotel, restaurant, airline, travel insurance and other review sites, by penalising businesses who ‘game’ these sites, independently of any penalties that the website host may choose to impose for breach of their usage terms.
The ACCC Media Release states:
“Many consumers base their purchasing decisions on reviews they get through sites like TripAdvisor. It’s therefore vital the reviews on these review sites are not manipulated and accurately reflect all customers’ opinions – the good and the bad,” Ms Court said.
“This decision sends a strong message that businesses must not undermine the integrity of third party review processes in order to mislead or deceive consumers, as this conduct risks breaching the Australian Consumer Law,” Ms Court said.
The fact that the practices were deliberate and were systematically applied will weigh against Meriton when the Court decides upon the civil penalties, declarations and orders to be made (at a later hearing).