ACCC to clamp down on fake reviews

The state's peak hospitality lobby has welcomed a commitment by the competition watchdog to enforce penalties against businesses that post fake online reviews.

The Australian Competition and Consumer Commission today published best practice guidance on online product reviews for businesses and review platforms.

Businesses are warned not to post or publish misleading reviews, to be transparent about commercial relationships and to remember that omitting negative reviews can be as misleading as posting fake reviews.

Misleading or deceptive conduct which breaches the Competition and Consumer Act can be punished with fines of up to $1.1 million.

ACCC deputy chair Michael Schaper said the commission had taken action against businesses in relation to misleading reviews and would continue to monitor websites for breaches of the Act.

"Fake online reviews mislead consumers and hurt Australian businesses," Mr Schaper said.

"Businesses that pay for or post fake reviews can gain an unfair advantage or damage their rivals."

The latest Sensis Social Media report revealed 74 per cent of social media users read online reviews before making a purchase. 

Food and wine review websites such as Urbanspoon have become a highly popular source of information for consumers but provide few safeguards to ensure reviews are not misleading. 

Australian Hotels Association (WA) chief executive Bradley Woods said patrons and visiters to Western Australia should have the most accurate and relevant data on hospitality venues available to them.

"Fake or misleading reviews are unacceptable and industry will work closely with the ACCC to identify and stamp out any practices as they are uncovered," he said.

"Whether these reviews are positive or negative, the integrity of transparent and honest consumer reviews is critically important to the hotel and hospitality industry."