$3M penalty for manipulating customer reviews

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In Australian Competition and Consumer Commission v Meriton Property Services Pty Ltd (No 2) [2018] FCA 1125, Meriton Property Services Pty Ltd (Meriton) has been penalised $3 million for manipulating their customer reviews on the third party review website, TripAdvisor.  This penalty follows the Federal Court’s 2017 finding that Meriton had breached sections 18 and 34 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (ACL), which concern misleading or deceptive conduct and conduct that is likely to mislead the public as to the nature of any services.

Meriton was found to have engaged in deceptive practices which prevented guests from posting potentially negative reviews on TripAdvisor, thus creating an overall unduly favourable impression of Meriton accommodation, which primarily supplies serviced apartments for short-term stays.

Meriton’s Conduct

In 2017, the Federal Court found that between November 2014 to October 2015, Meriton had reduced the number of negative reviews of its properties on TripAdvisor, a popular travel and accommodation review platform, in two ways:

  1. inserting additional letters into and, as a result, invalidating the email addresses of guests who had complained or seemed likely to have had a negative experience with Meriton, so that those guests would not receive an email prompt from TripAdvisor to provide a review of Meriton; and
  2. withholding from TripAdvisor the email addresses of guests who had stayed at Meriton properties during periods when the properties were affected by major service disruptions.

The Consequences

In addition to a $3 million penalty, Meriton were also restrained from filtering, selecting or limiting the guest email addresses it supplies to TripAdvisor (unless the guest consents to or requests this), and ordered to implement a range of measures to prevent the recurrence of similar deceptive conduct, for example, through the establishment of a Compliance and Education/Training Program.

The $3 million penalty reflects the importance of third party review websites remaining unbiased so that consumers can make accurate and informed purchasing decisions, and accordingly, the Australian Competition and Consumer Commission’s (ACCC) stringent efforts to enforce this and the severe monetary penalties that may ensue for any company that misleads consumers as to the quality of its goods or services.

As ACCC Commissioner Sarah Court states, “This case sends a strong message that businesses can expect ACCC enforcement action if they’re caught manipulating feedback on third party review websites”.

As such, this decision highlights the need to ensure your business has in place training and education so that all staff are fully aware of their obligations under the ACL and the consequences that may ensue from non-compliance.

At Bryks Lawyers, we have extensive experience in dealing with the Competition and Consumer Act and the Australian Consumer Law. Contact our team today for group training programs, individualised compliance programs and easy-to-read manuals about the competition and consumer law.

Dorota Bryks, Principal Lawyer +61 2 9098 8088 dbryks@bryks.com.au

This information is for information purposes only and is not legal advice. You should obtain advice that is specific to your circumstance and not rely on this publication as legal advice. Please contact us if you wish for us to advise you on any issue you may have arising from this publication.

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