The Federal Court has found that accommodation provider Meriton engaged in misleading or deceptive conduct by implementing a strategy to minimise the number of negative reviews its guests posted on the TripAdvisor website.
In November 2016, the Australian Competition & Consumer Commission (ACCC) instituted proceedings against Meriton in the Federal Court, alleging that between November 2014 and October 2015, the accommodation provider took deliberate steps to prevent its guests from receiving TripAdvisor’s ‘Review Express’ email if it suspected they would provide an unfavourable review. Specifically, the commission alleged Meriton failed to pass on guest email addresses to TripAdvisor or provided TripAdvisor with incorrect email addresses for guests.
The ACCC’s allegations were made out in the Federal Court, which found that on several occasions Meriton engaged in this conduct in respect of the majority of guests staying at one of its hotels during periods when there were infrastructure or service problems, such as no hot water or a lift not working.
The Court also held that Meriton’s conduct was liable to mislead the public as to the nature, characteristics and suitability of purpose of its accommodation services.
ACCC Commissioner Sarah noted that the steps taken by Meriton to reduce the chances of a customer posting a negative review had the effect of creating a more positive or favourable impression of the quality or amenity of the company’s properties on the TripAdvisor website.
“Many consumers base their purchasing decisions on reviews they get through sites like TripAdvisor,” she said. “It’s therefore vital the reviews on these review sites are not manipulated and accurately reflect all customers’ opinions – the good and the bad.
“[The Federal Court’s] decision sends a strong message that businesses must not undermine the integrity of third party review processes in order to mislead or deceive consumers, as this conduct risks breaching the Australian Consumer Law.
TripAdvisor states that accommodation providers that regularly use the ‘Review Express’ service, which sends guests a prompt on behalf of accommodation providers, see an uplift of 28 to 33 percent in TripAdvisor reviews for their properties.
A hearing on relief against Meriton will be held on a date fixed by the Court. The ACCC has previously indicated that it would seek pecuniary penalties, declarations, injunctions, corrective publication orders, orders for the implementation of a consumer law compliance program and costs.
