Customer reviews can be a great way to establish your brand credibility. But do you know how to manage the legal risks associated with soliciting and publishing those reviews online?
In October 2022, the ACCC commenced a “sweep” of online reviews and testimonials across a range of business websites, Facebook pages, and third-party review platforms. At least 100 businesses will be covered in the sweep, which will target popular sectors such as household appliances, electronics, fashion, beauty products, food and restaurants, travel services, sport, home improvement, kitchenware, health products, as well as furniture and bedding.
According to then ACCC Deputy Chair, Delia Rickard, the regulator is “looking to identify businesses, review platforms or sectors where there is a pattern of misleading online reviews and testimonials that have the potential to cause significant consumer or small business harm”.
This will form part of a series of internet sweeps by the ACCC focusing on misleading practices in the digital economy. Also in October 2022, the ACCC commenced a sweep of “greenwashing” claims across at least 200 company websites. Once these sweeps are concluded, next in the firing line will be social media influencers who fail to clearly disclose advertising or sponsorship arrangements.
The ACCC has warned that the sweeps will be followed up with compliance, education, and potential enforcement activities.
What does this mean for you?
The obligations under the Australian Consumer Law in respect of misleading and deceptive conduct apply to online advertising the same way they do to other types of advertising. That means you can’t make any false or misleading claims and all claims in your online reviews need to be capable of substantiation.
Below are some quick tips to help you and your team navigate the different stages of preparing a customer review marketing strategy.
Stage 1: How to solicit reviews
- No fake reviews: A number of businesses have landed themselves in hot water in the past by posing as “genuine customers” and posting reviews about their own products or services or, in some cases, even a competitor’s products or services. Reviews should only ever be posted by genuine consumers who have used the product or service. The reviews must also accurately reflect the consumers’ independently held opinions. In July 2020, an online tasking platform, Service Seeking, was fined $600,000 in relation to its “Fast Feedback” feature. This feature allowed businesses which advertised their services on the platform to rate and review themselves after completing each job, thereby creating a false impression about the number of favourable reviews and star ratings which those businesses had received from actual consumers.
- No strings attached: If you are planning on providing incentives to reviewers in return for their reviews, then you need to make clear upfront that all reviewers will be entitled to receive an incentive regardless of whether they provide you with a positive or negative review. You then also need to follow through with that promise by delivering those incentives to all of your reviewers.
- Everybody gets a say: You cannot selectively solicit reviews by only offering the opportunity to review your product or service to individuals whom you believe will provide you with positive reviews. The Federal Court issued a $3 million fine to serviced apartments accommodation provider Meriton in July 2018 for “masking” email addresses of unhappy guests. This prevented guests whom Meriton suspected would provide negative reviews from receiving a follow-up prompt email from TripAdvisor to provide feedback on their experience.
- Prepare and maintain a substantiation dossier: When it comes to making any kind of marketing claims, substantiation is always key. Wherever possible, we recommend getting a written acknowledgment from each of your reviewers confirming that they have in fact used your product or service and that the review which they have provided reflects their genuine and independently held views about the product or service.
Stage 2: How to publish and monitor reviews
- Think twice before republishing: In certain circumstances, you can be held liable for claims made in customer testimonials which are false or misleading – even if they are genuine customer testimonials. This applies to all testimonials which are “republished” by your business either on your website or Facebook page or any other online forum over which your business has reasonable control (e.g. a sponsored article). This means that if a customer believes and states that your product or service provided them or their family member with a particular benefit for which you have no substantiation (e.g. “This air purifier stopped my family from getting sick this winter”), then you should not republish that review – no matter how flattering it may be. If the customer has already published the review (e.g. by leaving a comment on your Facebook page), then you need to take steps to remove that review or respond publicly in order to correct the review (e.g. by posting a reply to the comment on your Facebook page). The golden rule to apply is: If you cannot make a particular claim about your product or service because you know that it is false or misleading or cannot be substantiated, then you cannot simply sit back and allow someone else to say it in a customer review.
- Be transparent about incentives: If you have provided your reviewers with an incentive in return for their review (e.g. freebies or a gift voucher), then you need to clearly disclose that upfront in connection with the customer’s review.
- No cherry picking: You cannot selectively remove or edit any negative (but genuine) customer reviews which have been published on your website or Facebook page or a third party review website in order to try to create a better impression of how your product or service is viewed by the public.
Got any questions? Contact the Addisons Competition, Consumer & Antitrust team.