Legal

Real action needed on fake online reviews

Cara Waters /

The competition watchdog has once again signalled its intention to crack down on fake online reviews but it’s hard not to yawn at this latest announcement.

Australian Competition and Consumer Commission deputy chair Delia Rickard told an industry forum yesterday that businesses paying individuals to write false positive of malicious reviews is something the watchdog has identified as “a priority going forward”.

“There are so many businesses organising fake online reviews that there is now a site that rates fake online review services,” she told the Australian Securities and Investment Commission annual forum.

Talking to many owners of hospitality and tourism businesses it is clear that fake online reviews are rampant.

One notable example was a new cafe opening in Melbourne recently which managed to garner online reviews on review site Urbanspoon before it had even opened its doors.

Fake online reviews are a real problem for businesses but once again, the watchdog’s bark is worse than its bite.

ACCC chairman Rod Sims flagged this issue last year and there does not seem to have been any progress since then.

In order to retain credibility review sites need to have systems for flagging fake reviews and penalising businesses which use them.

Review site Yelp has tried to do this by slapping a warning on the page if it discovers companies are buying reviews in order to pump up their ratings.

But the ACCC also needs to step in and take a more aggressive approach rather than simply talking about the problem.

It should take a leaf out of the Advertising Standard Authority’s book in the UK which took review site TripAdvisor to court over its claims its reviews were real, honest and trusted or the Federal Trade Review Commission in America which can fine businesses that buy fake reviews more than $250,000.

At the moment fake reviews in Australia continue to go unpunished and they are harming honest small businesses.

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Cara Waters

Cara Waters is a former SmartCompany editor. Previously, Cara was a senior reporter for the Financial Times' website and worked for The Sunday Times in London.

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