18 Aug 2016

New guidelines for online reviews and testimonials

By Richard Hoad

The guiding principles for businesses using online reviews as part of their marketing toolkit are openness, consistency and honesty.

The ACCC has had a strong focus on consumer law compliance in the online marketplace over recent years. The instant nature and relative informality of activity online has tended to result in a more relaxed attitude towards compliance with the law, including the Australian Consumer Law (ACL). Of course, this attitude is misplaced ‒ the ACL applies to online transactions and communications in exactly the same way as it applies to more traditional exchanges. There is, however, some useful guidance for anyone using online reviews as part of their marketing toolkit.

ACCC issues guidelines in 2013

One area of focus in the ACCC's monitoring of the online environment has been product reviews and testimonials.

In 2013, the ACCC published guidelines for businesses which publish reviews online. While such guidelines do not necessarily represent the law as it stands, they are invaluable as they indicate the ACCC's views on best practice, and also when certain conduct may attract unwanted attention from the regulator.

For example, the guidelines recommended that businesses should only offer incentives for posting reviews online if:

  • incentives are offered regardless of whether the consumer is likely to post a positive or negative review;
  • reviews are treated equally, regardless of whether they are complimentary or critical;
  • the reviewer is expressly told that the incentive is available whether the review is positive or negative; and
  • the incentive is prominently disclosed to users.

Earlier this year, the ACCC pursued True Value Solar, which had been offering customers a free solar panel service (valued at $199) if they placed a review on one of the leading online review platforms, http://www.productreview.com.au. The offer was only made to customers who had indicated that they were happy with True Value Solar's service (who could therefore reasonably be expected to post a positive review). The customers who submitted reviews did not indicate that an incentive had been provided. As a result of the investigation, True Value Solar discontinued its incentive program.

New ICPEN guidelines

Last month, the ACCC announced the development of new guidelines by the International Consumer Protection and Enforcement Network (ICPEN), an informal collaboration between consumer law regulators around the world, including the ACCC. Recognising the growing reliance consumers place on online reviews and testimonials, for example when booking travel and accommodation, ICPEN has published separate sets of guidelines for review administrators, digital influencers, and traders and marketing professionals.

"Compliance with these guidelines will build consumer confidence in online reviews, and help review platforms, traders and digital influencers avoid regulatory action." (ACCC Deputy Chair, Delia Rickard) 

A review administrator is someone who collates and publishes product reviews. This includes suppliers of products which collect and publish reviews of their own products, as well as the publishers of aggregated review platforms (eg. Trip Advisor, CNET, DP Review, Epinions and Product Review). The guiding principles for review administrators are:

  • be equal and fair in the collection of reviews;
  • be alert and proactive in the moderation of reviews; and
  • be transparent in the publication of reviews.

Digital influencers are essentially people who blog, vlog or tweet. The guiding principles for digital influencers are:

  • disclose the payment of any incentive;
  • disclose other relevant commercial relationships; and
  • provide genuinely held views.

For the suppliers of products generally (and the marketers that assist them), the guiding principles are:

  • do not prevent consumers from seeing the whole picture of genuine, relevant and lawful reviews;
  • do not write, commission or publish fake reviews or testimonials;
  • disclose the payment of any incentive; and
  • disclose other relevant commercial relationships.

The guidelines contain a number of more granular recommendations. If, for example, you are a marketer or digital influencer, the guidelines say that you should protect yourself by refusing to deal with businesses that sail too close to the wind.

One of the more difficult issues which businesses have confronted in this area has been how to moderate reviews. In this regard, the guidelines say that review administrators should:

  • maintain appropriate procedures for moderating reviews;
  • remove, or tag as suspicious, reviews where the content is reasonably suspected of being fake, offensive or defamatory (the guidelines include some indicia of fake reviews);
  • give businesses whose products are reviewed the opportunity to challenge user reviews in the same place where the reviews are published;
  • investigate complaints about reviews but only remove them if there appears to be a proper foundation for the complaint;
  • ·not apply disproportionately more rigorous processes in moderating negative reviews than positive reviews; and
  • implement procedures to stop negatively reviewed businesses from "phoenixing" under a different name.

 So watch out!

There is a lot of overlap between the ACCC's 2013 guidelines and the new ICPEN guidelines. Much of it is common sense, though both sets of guidelines are certainly essential reading for any business contemplating collecting or publishing reviews of products online. As can be seen, the guiding principles are really about openness, consistency and honesty.

Or, in other words, don't mislead consumers. The ACCC is watching.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.