Quick Hit

Unfortunately, businesses are sometimes targeted by false or misleading online reviews. These can cause harm to businesses, including loss of future business.

A false or misleading review may contravene the Australian Consumer Law if the conduct was in “trade or commerce”. This may occur for example, if a review is left by a trader trying to deter consumers from dealing with a competitor.

A claim can be brought under the Australian Consumer Law in certain circumstances where a claim for defamation or injurious falsehood is unavailable.

Misleading or deceptive conduct under the Australian Consumer Law

It is a contravention of section 18 of the Australian Consumer Law to engage in conduct in trade or commerce that is misleading or deceptive, or likely to mislead or deceive. A person who has been impacted can bring a claim for damages.

Posting a false online review, a review that contains incorrect information, or omits important information may be misleading or deceptive.

A review that expresses an opinion (rather than a statement of fact), is not misleading or deceptive merely because that opinion turns out to be incorrect. However, it may still be misleading or deceptive if the review represents (wrongly) that the opinion was honestly held, or that there was a reasonable basis for the opinion.

When is an online review “in trade or commerce”?

To be contrary to section 18 of the Australian Consumer Law, the online review must be conduct “in trade or commerce”. This can be a tricky question.

Conduct generally is in “trade or commerce” where it is an aspect or element of activities or transactions which, of their nature, bear a commercial character.

Generally, political, social or consumer advocacy will not be seen as being in trade or commerce where the advocate is not themselves in trade or commerce.

For example, in one case, a union published statements for the purpose of putting pressure on ALDI to negotiate, in order to secure improved terms and conditions for members. This was found not to be in trade or commerce. The mere fact that the purpose of the publication is to affect the choices of consumers is not sufficient to mean that the conduct is in trade or commerce. The conduct must also have some trading or commercial character (see ALDI Foods v Transport Workers' Union [2020] FCAFC 231).

On the other hand, statements made by a trader that are disparaging of a competitor’s business or products will often be in trade or commerce, even if those statements are on a ‘personal’ page.

For example, in one case, the publication of an article in an industry blog that was critical of a competitor was found to be a publication in trade or commerce, including because the purpose was to protect the author’s business interests and because of the intended impact on the competitor’s trading activities (Fletcher v Nextra Australia Pty Ltd [2015] FCAFC 52).This type of post may be in “trade or commerce” even if it is on a ‘personal’ Facebook page (see Madden v Seafolly Pty Ltd [2014] FCAFC 30).

The test is fact specific, and whether the conduct is in trade or commerce will depend upon all of the circumstances.

An alternative to defamation

While a claim for misleading and deceptive conduct is limited to conduct in “trade or commerce” it has advantages over other claims that are traditionally considered in this context.

Unlike defamation, a claim for misleading and deceptive conduct:

  • does not have to meet a threshold requirement of causing, or being likely to cause, “serious harm” to reputation; and
  • can be brought by a corporation that is for profit or has more than 10 employees.

Practical tips

  • In addition to considering legal demands, a business should consider other strategies to address the fake negative review. These include commenting on the review or using a platform’s complaint or take down process.
  • Removing genuine negative reviews can also be problematic – the ACCC warns against deleting or editing genuine reviews, as this can itself be misleading.
  • If a fake review is causing immediate and significant damage to a business, it can seek an urgent injunction from a Court to require its removal.
  • If a review has been left anonymously, court processes can assist to find out information about the reviewer.
  • Positive reviews can also contravene the Australian Consumer Law, for example, fake positive reviews posted by family or friends.

For assistance with the Australian Consumer Law or defamation, please contact Adam Simpson or Anna Spies.