The Federal Court held that manipulating online reviews may amount to misleading and deceptive conduct in breach of Australian Consumer Law (ACL).

Background facts

In Australian Competition and Consumer Commission (ACCC) v Meriton Property Services Pty Ltd (Meriton) (2017) 350 ALR 494 the ACCC argued that Meriton, who operated serviced apartments in Queensland and NSW, had manipulated TripAdvisor’s review process in such a way that it contravened sections 18 and 34 of the ACL. Section 18 prohibits misleading and deceptive conduct while section 34 prohibits conduct that is liable to mislead the public as to the nature, suitability or quantity of any services.

Meriton’s tampering was done through the Review Express function of TripAdvisor. Review Express asks accommodation providers to send the email addresses of recent guests to TripAdvisor and then TripAdvisor emails those guests inviting them to review their stay. To avoid any negative reviews, Meriton manipulated the Review Express function by inserting “MSA” in the email addresses of any guest who were unhappy with the service or complained. Meriton also withheld email addresses of guests who stayed at the property that experienced major fault or service disruption (eg lifts that were not working).

In its defense, Meriton argued that it was not enough for the ACCC to establish that its conduct caused a more positive impression of the Meriton properties to be presented on TripAdvisor website and that the ACCC had failed to show that it was a false or misleading positive impression in breach of the ACL.

Findings

The court found that Meriton was essentially soliciting reviews from guests who has stayed at its properties but not from those considered likely to write negative reviews. The expert called by Meriton described the conduct as gaming the website. The scale of these practices was extensive. There were 14,584 instances of Meriton masking email addresses by inserted letters “MSA” to the guests email addresses during the period 1 April to 31 December 2015.

The court emphasized that sections 18 and 34 of the ACL were concerned with conduct, which includes conduct outside of making a representation. Simply because the relevant statements on TripAdvisor were made by guests, and not by Meriton itself, was not an obstacle to the application of these provisions. Accordingly, the court held that the ACCC had established that Meriton created a false or misleading positive impression in breach of the ACL because Meriton’s conduct had caused the TripAdvisor website to be “incomplete and inaccurate, or unduly favourable” towards Meriton.

Conclusion

This case is a key development in the application of the misleading and deceptive conduct provisions for conduct relating to online reviews. Although Meriton did not actively remove negative reviews or offer incentives for positive reviews, its deliberate failure to prompt selected customers for reviews was sufficient to breach the ACL. This case illustrates that the ACL captures parties who have in any way gamed or manipulated online review forums in a way which is liable to mislead the public.