Fake online reviews hurting Australian businesses and consumers

| 25.10,19. 07:48 AM |

Fake online reviews hurting Australian businesses and consumers

Photo: The ACCC says most social media users read online reviews before making a purchase. (Unsplash: Thomas Lefebvre)

Are you one of the many Australians who check their smart phone within
minutes of waking up, or is it the last thing you do before bedtime?
Mobile devices, and the internet, have infiltrated just about every aspect of our lives — from dating to searching for a job, or searching for accommodation.
We also use online reviews to determine whether or not a product or service deserves our money.
Indeed the competition watchdog, the ACCC, says as many as three quarters of all social media users say they read online reviews before making a purchase.
So when the ACCC also says it is receiving frequent complaints about fake negative online reviews, it is worth taking note.
The Council of Small Business recently dealt with a case where a union tried to harm a business through negative online reviews.
"It does happen," CEO Peter Strong said.
"Someone will get a bee in their bonnet, or someone will just target a business for some reason.
"It's got nothing to do with how good or bad that business is, but it's got all to do with personality or about ideology, and that's where we're concerned."
'You don't know whether the customer's actually been here or not'
Fake online reviews can generate a lot of stress for business owners when it is unclear who wrote the review.
Hairdressing salon owner Michael Napoli told PM that being on the wrong end of a fake online review gave him a lot of anxiety.
"Online reviews are really difficult because if you haven't got online reviews people don't even walk in the door," he said.
"They're bad because [you] don't know whether the customer's actually been here or not; it could be a competitor that's put the review.
"And then getting them off is impossible."
Of course, a natural reaction to a particularly negative review that a business owner believes to be fake is to want to take it down immediately.
But that is currently not possible — no matter how much reputational damage it is causing.
A business can, however, complain about a review to the ACCC.
If a complaint about a fake review from a business is held up following an investigation, under consumer law the competition watchdog can issue infringement notices.
Penalties of more than $1 million can be enforced.
But that is as far as the ACCC's powers go for now.
The Council of Small Business Organisations of Australia (COSBOA) and the ACCC are currently working on giving businesses more power on that front.
In a report on the ACCC's Digital Platforms Inquiry, released a few months ago, the watchdog recommends that an ombudsman should have the power to: investigate complaints, take down content where appropriate, and order compensation.
PM asked the Minister for Communications Paul Fletcher how the Government intended to respond to these recommendations.
In response, his office said the Government was considering the ACCC's recommendations and would provide a formal response before the end of the year.
False praise also 'reasonably prevalent'
Fake glowing reviews about a business are also a big problem.
This is where shoppers can get a raw deal — particularly travellers, or anyone looking for a personal service such as a haircut.
In some recent overseas cases businesses have been found to direct employees to write glowing reviews, or to respond to bad reviews with counterarguments or something positive.
ACCC commissioner Sarah Court said this sort of behaviour around online reviews was "reasonably prevalent" in Australia.
The ACCC warns businesses they need to indicate somewhere in a review if the reviewer has been incentivised to write something positive about the company.
"We are really just concerned to make sure that other consumers reading those reviews are not misled by them and fully appreciate the circumstances in which those reviews are given," Ms Court said.
For Australians, who are quite partial to travel, it represents a rather large headache.
Britain's Consumers' Association, known as Which?, analysed 250,000 reviews for top-rated hotels and found one in seven had the hallmarks of being fake.
Consumers and businesses must be on guard
So, what's more potent for the individual or organisation trying to inflict harm on a business — posting a nasty fake review, or lavishing a business with praise?
A recent study by the Stevens Institute of Technology in the US found a mixed strategy of self-injecting fake positive reviews, and injecting fake negative reviews about competitors, was the most effective way for attackers to overtake their competitors in terms of visibility in online searches.
It all raises a bit of a philosophical dilemma that goes to the heart of all online content:
As the internet evolves, and businesses and consumers rely on it more, how should regulators ensure that the content within it stays credible?
The problem when it comes to online reviews is they are helpful for consumers, and can promote businesses that are providing an excellent service, but they also create opportunities for those who seek to do harm.
The ACCC simply said it was still wrestling with how to manage this tension.
"You know they can be beneficial for consumers, and so we have to find that line that small businesses are not unfairly disadvantaged but consumers continue to get the benefits that are obtainable from the review process," Ms Court said.
So where does this leave online shoppers, and website searchers?
For shoppers it means there is no guarantee the online review they are reading is real. There is a good chance it is genuine, but there are no guarantees.
For businesses, it means they need to remain on guard.
Perhaps a consolation for business owners fretting about a particularly bad fake review is that the consumer or reader knows there's no guarantee it's for real either.


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