Meriton Ordered to Pay $3m for Manipulating TripAdvisor Reviews

Thursday 2 August 2018 @ 10.55 a.m. | Legal Research | Trade & Commerce

On 31 July 2018, the Federal Court ordered that Meriton Property Services Pty Ltd (‘Meriton’) pay penalties due to a breach of the Australian Consumer Law by manipulating and interfering in the operations of review site TripAdvisor in the case of ACCC v Meriton Property Services Pty Ltd (No 2) [2018] FCA 1125.

Background to Case

The Federal Court previously found that Meriton had engaged in misleading or deceptive conduct by implementing a practice that constituted the ‘masking’ of guest email addresses, particular the addresses of those guests that Meriton suspected may leave a bad review on TripAdvisor. The practice prevented these guests from receiving TripAdvisor’s ‘Review’ Express’ email, which prompts customers to provide a review of the service provided. The ‘Review Express’ service is a service where participating accommodation providers can  pass on consenting customer email addresses to TripAdvisor, which then sends an email prompt to those customers. Meriton undertook the practice of inserting random letters into guests’ email addresses or not sending the email addresses to TripAdvisor, which constituted ‘masking’ the email addresses and precluding negative reviews from appearing on the site. For more information into the background of this case, please read TimeBase’s earlier article

Penalties Ordered

Justice Moshinsky, sitting alone, ordered that Meriton pay a pecuniary penalty of $3 million, as well as ordered that Meriton be restrained from filtering, selecting or limiting the customer email addresses it supplies to TripAdvisor for use in the Review Express service. In addition to this, Meriton was ordered to do the following:

  • Establish a Competition and Consumer Law Compliance Program;
  • Issue a policy statement outlining Meriton’s commitment to compliance with the Consumer and Competition Act 2010 (Cth);
  • Ensure that the Compliance Program includes provisions related to a Complaints Handing System and also ensure that staff and customers are made aware of this system;
  • Ensure that the Compliance program includes protections for whistle-blowers;
  • Provide for regular training for all directors, officers, employees, agents and representatives of Meriton related to conduct that may contravene section 18 or 34 of the ACL;
  • Ensure that the Compliance officer reports to the Board or to senior management every six months on the effectiveness of the Compliance Program;
  • Carry out annual reviews of the Compliance Program;
  •  Ensure that the reviewer of the Compliance Program provides a Compliance Report with the findings of the review included;
  • Ensure that any material failures are reported to the ACCC;
  • Maintain and store records of all documents relating to and constituting the Compliance Program for not less than 5 years.

Response to Decision

ACCC Commissioner Sarah Court highlighted the prevalent use of review sites such as TripAdvisor in a media release:

‘People often make purchasing decisions for accommodation based on the rankings and reviews they read on third party sites like TripAdvisor. Manipulating these reviews is misleading to potential customers, who deserve the full picture when making a booking decision. This case sends a strong message that businesses can expect ACCC enforcement action if they’re caught manipulating feedback on third party review websites.’

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.

Sources:

ACCC v Meriton Property Services Pty Ltd (No 2) [2018] FCA 1125.

[media release] ACCC, ‘Meriton to pay $3 million for misleading consumers on TripAdvisor,’ 31 July 2018.

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