Monday 9 December 2013

The new ACCC guidelines: Australian law and online reviews

Last week the ACCC released its first guidance materials relating to online product reviews for businesses and review platforms. The arrival of the guidelines was warmly welcomed by those of us concerned with disclosures and misleading conduct online - in the absence of specific guidance in the Australian legal context, we'd had to look to equivalent guidelines in the US (see the FTC's 2009 Guidance on Endorsements and Testimonials and the updated-for-2013 Dot Com Disclosures guidance for digital advertising) and the UK (see the ASA's recent publication Blurring advertising and blogs – why it pays to know the ad rules).

In light of the confusion surrounding the ACCC guidelines from some people online ('So if I only post positive reviews of my wines on my site, is that in violation?!' one wine person tweeted to me) I thought I'd write this post setting out the guidelines, as they intersect nicely between my blogging and my professional expertise relating to consumer law.

A couple of initial points:

- Contrary to what you may have heard, these are not 'new laws' that the ACCC is introducing. Misleading or deceptive conduct continues to be prohibited under the Competition and Consumer Act 2010 (CCA) incorporating the Australian Consumer Law (ACL), punishable by penalties of up to $1.1 million. What the guidelines do is help to identify misleading conduct in the specific context of online reviews.

- The ACCC guidelines relate to 'review platforms', which are defined as 'sites, sections of sites or software tools (eg apps) which publish reviews about a range of goods, services or businesses and whose predominant audience are consumers seeking product or business information to inform a prospective purchase. Review platforms generally publish reviews on their own site. Sometimes review platforms are engaged to collect and publish reviews on another’s site.' The guidelines confirm that the principles equally apply to blogs and discussion threads. It also makes no difference whether the reviews are by experts or 'everyday' consumers (eg Urbanspoon, Yelp, TripAdvisor).

The quotes below come from the ACCC guidance and the summary for businesses on the ACCC website.

Disclosing commercial arrangements with reviewed businesses
Commercial relationships between review platforms and businesses may influence the overall rating of a business on the site. For example, a review platform may allow businesses that advertise on the site to select a review to appear at the top of the page or prevent negative reviews from being automatically uploaded. This may mislead consumers by creating an impression that the business received more favourable reviews than it actually has. Disclosing commercial relationships between review platforms and businesses helps consumers make better informed decisions about the business and its products or services.

Platforms which allow commercial relationships with reviewed businesses to impact upon the content or presentation of reviews, in particular the inflation of review results, risk breaching the CCA. In circumstances where a commercial relationship does not affect the review results, it is recommended that there is disclosure of this relationship to consumers using the review platform.

For platforms opting to rely on disclosure, suggestions as to how this disclosure may be made include:
- a prominent explanation of the nature and extent of the commercial relationship and its impact, if any, on the review page of the affected business
- distinguishing review results which are in any way promoted or improved because of a commercial relationship with the platform through shading or other means so that their content is not confused with ‘organic’ review results.

If you have a commercial relationship: disclose it.

The guidance goes beyond the obvious point of disclosing advertorials to include the ways in which commercial relationships between the business and the reviewer or review platform may influence in subtler ways, such as the business being able to manipulate review results.

This excellent article on the guidelines in the Fin Review by Cha's Kitchen points to @stickifingers' commendable use of the #myclient hashtag when tweeting about her clients.

‘Consumer reviews’ written by businesses or on behalf of businesses
The writing of reviews by a business about itself as though it were a consumer is misleading; as is writing negative reviews about a competitor when the author has not experienced the product or service. Engaging an individual, a search engine optimisation firm or other public relations firm to deliver reviews by persons who are purporting to be, but who are not in fact, genuine consumers is misleading.

You should not write reviews when you have not experienced the good or service reviewed or reviews which do not reflect a genuinely held opinion. You should not solicit others to write reviews about your business or a competitor’s business if they have not experienced the good or service. The ACCC considers such conduct to be misleading.

You should not encourage family and friends to write reviews about your business without disclosing their personal connection with your business in that review.

Re that last point: undisclosed personal connections can also mislead, even if there's no commercial relationship. When I write about places that are run by mates of mine I always err on the side of disclosing our connection (even if it risks making me sound like a pretentious name-dropper).

Detecting and removing fake consumer reviews
Businesses and review platforms that do not remove reviews that they know to be fake risk breaching the CCA.

Whilst it is not always possible to detect every fake review, review platforms should have appropriate processes and procedures in place to detect and remove fake reviews. A best practice approach is to reactively (relying on complaints information) and proactively (using automated or manual internal systems) seek out fake reviews, including after they have been posted.

There is no precise formula for identifying fake reviews. In relation to the detection of suspected fake material, reviews which may warrant attention include those:
- which are part of a significant ‘spike’ in reviews about a particular business over a limited period of time
- written from the same email or IP address as each other or as the business reviewed
- written about the same business, good or service where the accounts of those who wrote reviews demonstrate abnormal similarities, e.g. similar email addresses, user names, passwords or IP addresses
- which use overly positive or ‘marketing-speak’ writing styles
- which do not make sense
- which use the same exact language as other reviews of the same business or product.

Reviews may mislead consumers if they are presented as impartial, but were written by:
- the reviewed business
- a competitor
- someone paid to write the review who has not used the product
- someone who has used the product but written an inflated review to receive a financial or non-financial benefit.

Tips for businesses:
The ACCC considers conduct such as the following to be misleading. You should not:
- encourage family and friends to write reviews about your business without disclosing their personal connection with your business in that review
- write reviews when you have not experienced the good or service reviewed or which do not reflect a genuinely held opinion
- solicit others to write reviews about your business or a competitor’s business if they have not experienced the good or service.

In their online advice for consumers, the ACCC also warns consumers to 'be wary of reviewers or online contributors whose profile indicates that they have only ever written one review. The profile may have been created to write a fake review.' To their credit, websites like Yelp are going to considerable lengths to try to weed out fake reviews.

Incentivised consumer reviews
Incentives should only be offered in exchange for reviews of your business (its products or services) if:
1) incentives are offered equally to consumers likely to be complimentary and consumers likely to be critical, and positive and negative reviews are treated the same
2) the reviewer is expressly told that the incentive is available whether the review is positive or negative
3) the incentive is prominently disclosed to users who rely on affected reviews.

When an online review platform offers an incentive, it should do so in accordance with the three recommendations set out under the guidance for reviewed businesses relating to incentivised reviews. It is recommended that disclosure of any incentive which the platform offers in exchange for a review be placed by the platform prominently on the review page of the business whose reviews are affected by the incentive.

When provided with an incentive, many people tend to write a positive review: as Phil Lees notes, the Norm of Reciprocity is strong.

The ACCC's use of the term 'incentives' is sufficiently broad to cover perks like free meals, samples for giveaways and other non-financial benefits.

An incentive disclosure case study: when Third Wave Cafe in Prahran opened in October, the owner wrote to just about every food blogger in Melbourne, inviting them to come in and have a free meal. Of the 32 blog posts listed on Urbanspoon reviewing Third Wave Cafe over the last two months, 27 make some form of disclosure about the incentive they received (ranging from the specific - 'sponsored post: our meal was paid for by TWC' - to the vague - 'we were invited to visit TWC'). Five of the blog posts are silent as to whether they received incentives (it is unclear whether or not they received the incentive). Of the 27 that did disclose, a handful did not do so until the end of the post (often in the form of an italicised disclaimer). The US FTC has suggested that disclosures of this nature may not be sufficiently clear and conspicuous.

In its media release announcing the guidelines, the ACCC said it was also concerned about businesses artificially inflating their review results by offering consumers generous incentives in exchange for reviews of their products or services. Promotions of this nature may need to be reviewed in the future to ensure they meet the three recommendations set out above.

The omission of credible consumer reviews, inflated (average) reviews and the ‘big picture’
The removal of review content is a regular feature of consumer review platforms and is warranted where it prevents fake, offensive, defamatory or irrelevant reviews from being published. Deleting or hiding reviews suspected of being fake or reviews which are offensive, defamatory or irrelevant is not misleading as consumer review platform users anticipate limited removals to improve the quality of reviews.

Online review platforms should ensure that the overall impression created by a body of reviews on a review platform is not misleading. Platforms which selectively remove or edit negative reviews because of a commercial relationship with a reviewed business risk creating an overall picture of consumer opinion which is misleading.

If the total body of reviews doesn’t reflect the opinions of consumers who have submitted the reviews consumers may be misled.

Content moderation policies of review platforms ensure users and businesses have a clear understanding of when and why online consumer reviews will be removed. It is recommended that consumer review platforms make their policy for publishing and removing consumer content accessible to platform users.

Note here that the guidelines are referring to reviews on review platforms, rather than reviews of a product on the product's own website.

The guideance confirms that if you're a blogger who only writes positive reviews then that's your prerogative; if however you went back to edit/remove your old blog posts that were critical of a business because you now have a commercial relationship with that business, that's a problem which may be misleading.


One issue that is indirectly touched upon in the guidelines is the question of bloggers who solicit freebies. Provided that disclosure is made, solicitation probably isn't misleading (just tacky as hell, in the eyes of several who think such behaviour gives bloggers a bad name).

RELATED: I'm going to be speaking on a panel at next year's Chef Jam at the Melbourne Food and Wine Festival. I'll be on a panel with Lucky Peach editor-in-chief Chris Ying and Fool magazine's Per-Anders Jörgensen, debating 'the rise, and rise, of the food blogger'. Wish me luck!


Sofia said...

Really well written Claire, and love that your legal background gives you the knowledge and expertise to comment confidently about this, alongside being a prominent blogger yourself.

Phil said...

I think one of the interesting parts of the guidelines is the disclosure of commercial relationships, especially that it suggests disclosing advertiser relationships. I'd love to see review platforms like newspapers and magazines have to clearly disclose on a review that the product is also an advertiser. If these were disclosed, you could also have a shot at statistically proving whether advertising did impact on review score.

Kenny Consider said...

Thanks for this analysis!

Francesca said...

Thanks for this. Really informative and I will definately change the way I reference products or retail stores on my blog. I am now wondering how much disclosure is made by some of our 'big' bloggers in Australia.

John Lethlean said...

Wise words Claire, a thoroughly recommended article to anyone who eats out and uses online media.

Cara @ Gourmet Chick said...

Enjoyed getting your perspective on these guidelines Claire. It's interesting that you think a disclosure at the end of the post may not be sufficient as forget blogs, most newspapers and websites do not give any disclosure at all. For example, in newspaper travel sections the most you get is the line at the end. Would like to see the ACCC run a test case on this.

Personally, I mention any freebie at both the start and end of a post. Despite some of the poor (and at times hilarious) examples of bloggers you have highlighted I think many blogs are actually leading the way in terms of disclosure wen you compare blogs with traditional media. It's the smart way to go as when everyone and anyone can have their say on the internet establishing trust with readers through full disclosure is key.

Becca said...

I never thought there is issue like this for online bloggers. Good to know about it, thanks for this informative post.

Morgan said...


Elisa said...

Thank you so much for this! It's really useful to have you decipher the guidelines... and interesting that this whole debate has opened.

Elliot and Sandra said...

I've come to this very late as I was o'seas most of Dec, Jan and early Feb. Recently I suffered the indignity of having Dimmi remove a review i wrote because they felt (under pressure from the restaurant owner/chef that it was unfair. After some thought I now think this is outrageous. He even made a veiled threat to me telling me he had spoken to his lawyers.
There were many good aspects about his restaurant but the food was not one of them. What do you think?
I also blog on