On 10 November 2017, Justice Moshinsky delivered his judgment against Meriton Property Services Pty Ltd, holding that its conduct in relation to the TripAdvisor review platform contravened sections 18 and 34 of the Australian Consumer Law (ACL)
What you need to know
- The Federal Court found that Meriton Property Services engaged in misleading or deceptive conduct, and conduct liable to mislead or deceive, by identifying guests who may have had a poor experience at the property or suffered a service disruption during their stay, and removing them from a mailing list that invites guests to post a review on the TripAdvisor website.
- Justice Moshinsky found that the conduct likely resulted in an improvement in the ratio of positive to negative reviews, and would also have affected property rankings on the TripAdvisor website. This means prospective guests receive an inaccurate or incomplete impression of the respective property, in contravention of sections 18 and 34 of the Australian Consumer Law.
- The question of remedies is to be decided at a later date.
What you need to do
- Resist temptations to interfere with, or manipulate, the integrity of third party review platforms by ensuring that your conduct does not restrict the publishing of a full range of customer reviews.
Background
Meriton Property Services operates serviced apartments across New South Wales and Queensland. These properties are listed on the TripAdvisor website (TripAdvisor). TripAdvisor allows guests to post reviews of hotels or other accommodation. These reviews are published online to a webpage dedicated
to that property, and are also used to produce a ranking of the accommodation in that geographical area.
This case concerns the Review Express service, offered by TripAdvisor, where participating properties provide TripAdvisor with guests’ email addresses. Emails are then sent with invitations to post a review. The evidence established that receiving such an invitation significantly increased the likelihood that a guest would post a review.
The ACCC brought action under section 18 (misleading or deceptive conduct) and section 34 (conduct that was liable to mislead or deceive) of the ACL against Meriton Property Services for the following two practices:
- when a guest made a complaint or had a negative experience, Meriton instructed its staff to put “MSA” in front of that guest’s email address, rendering their email address invalid (the MSA masking practice); and
- where a Meriton property suffered a service disruption, such as out of service elevators or a hot water outage, staff were instructed to withhold the email addresses of all guests who had stayed at the property during that
period (the bulk withholding practice).
These practices were adopted on the instructions of management across all Meriton properties in New South Wales and Queensland.
The effect of both these practices was that guests who were more likely to provide negative reviews were not sent invitations from the Review Express service.
The decision
Justice Moshinsky found that:
- the MSA masking practice had the effect of reducing the number of negative reviews of Meriton properties appearing on TripAdvisor, which in turn had the effect of improving the ratio of favourable to unfavourable reviews. As a result, prospective guests were given an unduly positive, or incomplete, impression of the property;
- the bulk withholding practice had the effect of reducing the number of negative reviews about service interruptions, and so prospective guests would have received an inaccurate impression of the frequency of service disruptions at Meriton properties; and
- in some cases, both the MSA masking practice and the bulk withholding practice had the effect of improving the ranking of Meriton properties in relation to other properties in that geographical area.
The conduct was likely to mislead or deceive, and by engaging in that conduct Meriton contravened section 18 of the ACL. Justice Moshinsky also found that Meriton had engaged in conduct that was liable to mislead the public as to the characteristics and suitability of the property, and in doing so contravened section 34 of the ACL.
Authors: Grant Fisher, Partner; and Rishada Cassim, Graduate.
