12 June 2023
Managing online reviews should be an inherent part of owning a business with an online presence. With many businesses relying on online traffic to attract customers, a single negative review can be devastating to a business’s reputability, and therefore its profitability.
The risk associated with negative reviews is amplified by the ease with which a critic may hide their identity and attack a business anonymously. Businesses facing the wrath of an anonymous “keyboard warrior” are not without options. In the last five years, there has been a sharp rise in business owners seeking court orders to unmask the identity of Google reviewers or seeking injunctions to remove reviews containing defamatory imputations from the platform.
On the other side of the equation, there has also been significant penalties for companies manipulating reviews, and thereby misleading the public, in breach of the Australian Consumer Law.
This article discusses the risks associated with online reviews from both the perspective of the “reviewer” and the “reviewed”.
Defamation
A number of recent defamation cases illustrate the risks associated with posting defamatory online reviews.
Musicki v de Tonnerre [2023] FCA 222
On 22 September 2020, a Google review was posted about Dr Korana Musicki, a Melbourne-based specialist vascular and endovascular surgeon.
The review posted by “Dave Cross” stated:
“terrible experience, was super keen to get me on the table but then impossible to get a hold of for follow up, vague about incurrent expenses, ended up with a massive bill. had no issues with the surgery but overall negative experience and no followup”
After multiple and unsuccessful attempts to remove the review, Dr Musicki commenced preliminary discovery proceedings against Google. The Federal Court of Australia ordered Google to give discovery to Dr Musicki of all documents that were or had been in Google’s possession, power or control relating to the description of “Dave Cross”. The Court recognised ‘this was a matter of great concern to (Dr Musicki), in terms of professional reputation’, and that Dr Musicki ‘may have a right to relief by way of proceedings for defamation’.
When Google ultimately gave discovery it was revealed that “Dave Cross” was actually a former medical student of Dr Musicki, Mr Erik de Tonnerre.
On 4 March 2022, Dr Musicki issued Mr de Tonnerre a Concerns Notice (pursuant to the Defamation Act 2005) in relation to the review.
On 1 April 2022, the review was removed.
On 24 August 2022, Dr Musicki commenced defamation proceedings against Mr de Tonnerre and successfully obtained default judgment. The Federal Court of Australia held that Dr Musicki had ‘suffered damage to her reputation’ and was ‘entitled to damages to compensate her for hurt feelings, for damage to her reputation and to vindicate her reputation’: [24]–[25].
On 28 February 2019 the plaintiff, Adelaide lawyer Gordon Cheng, became aware of a review posted on a website called Google My Business on 18 October 2018. The review, posted by defendant Isabel Lok, stated:
“Stay clear of this place! Gordon brings shame to all lawyers and is infamous for his lack of professionalism amongst the law society in Adelaide. He is only concerned about how to get most of your money by giving you false and misleading advices, and convincing you to go to court when it is clear that he doesn’t have a case to win.”
Cheng issued a Concerns Notice on 12 March 2019 and lodged a complaint with Google.
While the initial review was finally deleted on 30 April 2019, Ms Lok had posted a further review on 30 April 2019 stating, “Bad Lawyer! Not at all reliable”. Ms Lok posted yet another review on 20 May 2019, stating, “Poor service”.
Mr Cheng commenced defamation proceedings in 2020. Not only had Cheng never been retained as Lok’s lawyer, he had never even met her.
Cheng pleaded significant loss as a result of the defamatory review, stating that he lost about 80% of his clients, and was forced to retrench a law clerk and an associate as he was no longer able to pay them.
Cheng was entitled to damages in the sum of $750,000 and costs on an indemnity basis, with Bochner J finding ‘the defendant was acting in the absence of bona fides’… ‘no other finding is open to me in circumstances where the plaintiff and defendant have never met each other or had any dealings with each other’: [61].
The ‘serious harm’ threshold
The surge in Google review defamation cases in Australia has only been slightly tempered by the 2021 changes to defamation law in the Eastern states. The July 2021 changes introduced the statutory ‘serious harm’ element, in which those bringing defamation claims must demonstrate that they have suffered or are likely to suffer serious harm as a result of the allegedly defamatory reviews: see, e.g., Defamation Act 2005 (NSW) s 10A.
For example, in Scott v Bodley (No 2) [2022] NSWDC 651, Gibson DCJ considered the application of the serious harm threshold to a claim brought by a business owner over a one-star review posted on the plaintiff’s Google and Facebook business pages for 14 days. The plaintiff could not point to evidence that showed the defamatory reviews were actually read. There was no evidence of the ‘grapevine effect’ spread of the defamatory allegations to other parts of the internet. The absence of evidence meant that the plaintiff failed to satisfy the serious harm element, and so the proceeding was dismissed: [49]. The result was that the unsuccessful plaintiff had to pay a substantial portion of the defendant’s costs: Scott v Bodley (No 3) [2023] NSWDC 47.
Western Australia has yet to adopt the serious harm threshold. For businesses based in WA, defamatory online reviews remain prima facie actionable by persons with standing to sue, even if the person defamed cannot prove the review caused or was likely to cause economic loss.
Regulating the market: ACCC and ASIC
Review platforms and businesses have an obligation pursuant to the Competition and Consumer Act 2010 (Cth) to:
- remove fake or misleading reviews; and
- not selectively edit or remove negative reviews for commercial reasons such that it would mislead consumers.
Misleading or deceptive conduct occurs when a person or business makes claims or representations that are likely to create a false impression in consumers of a price, value or quality of goods or services. The Australian Competition and Consumer Commission (ACCC) website prescribes in detail how a business should deal with reviews to stay on the right side of the Consumer Law.
A number of recent ACCC cases illustrate the risks associated with online reviews.
ACCC v Meriton Property Services Pty Ltd [2017] FCA 1305
In 2017, the ACCC alleged that Meriton Property Services Pty Ltd, a serviced apartments accommodation provider trading as ‘Meriton Serviced Apartments’, had engaged in misleading or deceptive conduct in breach of the Australian Consumer Law.
It was argued that Meriton had manipulated their TripAdvisor reviews by:
- ‘masking’ certain email addresses by adding ‘MSA’ to the front of addresses of certain guests, thereby rendering the addresses invalid. This practice was applied to selected guests, such as those who had made a complaint or had a negative experience.
- ‘bulk-withholding’ from TripAdvisor the email addresses of all guests who stayed at the properties during a period of major service disruption; for example, when the lifts were not working.
These practices had the effect of ensuring certain guests never received an email prompt to review the experience and reduced the number of negative reviews of Meriton’s properties appearing on the TripAdvisor website. Meriton had improved the relative number of favourable reviews compared to unfavourable reviews on the website.
The Court held that Meriton, by engaging in the MSA-masking and the bulk-withholding practices, engaged in conduct that was likely to mislead or deceive, thereby contravening sections 18 and 34 of the Australian Consumer Law: [213], [218].
Ultimately, Meriton was ordered to pay penalties of $3 million for manipulating their TripAdvisor reviews.
ACCC v Service Seeking Pty Ltd (Service Seeking) [2020] FCA 1040
Service Seeking Pty Ltd (Service Seeking) is an online tasking platform connecting tradespeople with customers. The ACCC commenced proceedings against Service Seeking in 2020, alleging that certain aspects of the company’s system for obtaining customer reviews for service providers involved misleading or deceptive conduct and false or misleading representations, in contravention of the Australian Consumer Law.
Service Seeking admitted that it had falsely represented that reviews published on its platform were written by customers, when in fact the reviews had been created by the businesses themselves through the use of the ‘Fast Feedback’ feature. The feature allowed businesses to draft their own reviews and choose their own star rating. The reviews would then be emailed to customers, and automatically published on the Service Seeking platform if the customer did not respond to the review within three days.
This system meant that 17,000 reviews on the platform were automatically published without costumer input.
Service Seeking was ordered to pay $600,000 in penalties for making false or misleading representations regarding reviews on their platform. The Court held that ‘Service Seeking engaged in a systematic course of conduct of the self-interested purpose of increasing the attractiveness of its website… in a manner which it must have known would give rise to numerous instances of misleading conduct’: [73].
Conclusion
False reviews can spawn a variety of legal issues. The key takeaways from these recent case examples are that reviews must be fair and honest, and that businesses should be proactive in managing their reviews.
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Disclaimer: The information published in this article is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.
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