Online tasking platform ServiceSeeking will be taken to court by the competition watchdog following a nine-month investigation into its self-written review system.
The ACCC will allege in Federal Court proceedings ServiceSeeking allowed businesses to rate and review themselves without input from customers with its “fast feedback” feature.
The system lets businesses on the platform propose self-written reviews, along with star ratings, to customers for approval.
However, if customers don’t respond to emails seeking approval within three days, the self-written review is published anyway on the business’s profile.
The ACCC alleges the feature breached Australian Consumer Law and at least 80% of the ‘Fast Feedback’ reviews were not approved by customers.
“We know that online reviews and testimonials are important for consumers when they choose which business to buy goods or services from” ACCC deputy chair Delia Rickard said in a statement.
“Businesses are warned that online reviews need to accurately reflect the independent views and feedback of genuine customers or the business risks breaching the Australian Consumer Law”.
The ACCC began an investigation into ServiceSeeking in March, at which time the business said more than a quarter (27%) of its reviews came from the Fast Feedback system.
ServiceSeeking was founded in 2007 and has listed over 18,000 pieces of feedback on its website to date.
Joint chief executive Jeremy Levitt said his company doesn’t agree with the ACCC’s position.
“We don’t agree with the ACCC’s position although we can’t comment specifically on matters before the court,” he said in a statement on Friday.
The company said back in March it developed the system after businesses complained not enough customers were rating them.
“If a customer doesn’t agree with the rating, it won’t be published. If they comment, it will be published,” the company said at the time.
The case is the latest move by the ACCC to curb online reviews and ratings it sees as breaches of consumer law, following action taken last year against hotel chain Meriton.