Court hammers builder over online reviews


Posted By on 20/12/17 at 8:45 AM

The Federal Court has ordered Perth builder, Aveling Homes Pty Ltd, to pay penalties totalling $380,000 for engaging in misleading and deceptive conduct regarding the manipulation of online reviews of its products and services.

What happened?

Aveling Homes owned and controlled two websites for customers to post reviews about their experiences with both it and associated company the First Home Owner’s Centre.  Aveling Homes represented to customers that the websites were independent of it.

The Court found that:

  • the sites were made to look like independent product review sites which were affiliated with the well-known, when this was not the case; and
  • Aveling Homes “managed” the sites to remove or obscure negative reviews, leaving only positive reviews visible.

More than 100 reviews of 3 stars or less were not published, thereby artificially inflating the company’s overall star rating.

The court further found that the company’s Marketing Manager was “knowingly concerned” in these matters, and was fined $25,000.

Why is this a problem?

Manipulating or distorting reviews to create a more favourable impression of your goods is a big no‑no.  As this case (and others) clearly shows, it’s liable to amount to misleading and deceptive conduct.  The court recently found that Meriton Serviced Apartments engaged in misleading and deceptive conduct regarding online reviews of its properties posted on the TripAdvisor website (read our separate post on the case).

ACCC Chairman, Mr Rod Simms, said “Consumers are increasingly relying on online review sites to assist with their purchasing decisions.  They are entitled to expect that review sites are independent and unbiased.  Companies publishing customer reviews online must be clear with consumers whether or not they accurately reflect the full range of consumer feedback – the good and the bad”.

The takeout

When dealing with or managing online reviews, it’s imperative that you follow these basic guidelines:

  • Don’t publish fake reviews.
  • Don’t delete negative reviews or only publish positive reviews.
  • Incentives (if offered) must be disclosed where the reviews are published, and must be given regardless of whether the review is good or bad.

The ACCC has published a handy guide to managing online reviews.  If you have any questions or concerns about how your company is managing online reviews, please don’t hesitate to contact us.

Naomi Stephens Paralegal

Naomi is a paralegal in the Competition Law & Regulatory Compliance team, focusing on marketing activations, advertising review and trade promotions compliance.  She joined KHQ after having spent... Read More