The Federal Court has fined Meriton Property Services AUD 3 million for preventing customers from leaving potentially negative reviews on TripAdvisor and has also hit Meriton with a three-year restraining order to stop any repeat of the practice.
Manipulating TripAdvisor reviews was found to breach Australian Consumer Law.
In November 2017, the Federal Court found that Meriton – one of Australia’s largest apartment developers and serviced apartment operators – engaged in misleading or deceptive conduct and conduct liable to mislead the public by implementing a practice of “masking” email addresses. Masking prevented guests who Meriton suspected would give negative reviews from receiving TripAdvisor’s ‘Review Express’ prompt email.
Meriton’s ‘masking’ process worked by:
- inserting additional letters into guests’ email addresses provided to TripAdvisor so that the prompt email never reached the guest, or
- not sending guest email addresses to TripAdvisor.
The Australian Competition and Consumer Commission instituted proceedings in the Federal Court against Meriton Property Services Pty Ltd, trading as ‘Meriton Serviced Apartments’ (Meriton). The ACCC action followed an ABC investigation in 2015.
“Meriton’s management directed staff to engage in ‘masking’ to stop potentially negative reviews from appearing on TripAdvisor,” ACCC Commissioner Sarah Court said yesterday.
“This gave the impression Meriton accommodation was of a higher standard than otherwise may have been the case.
“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,” Ms Court said.
As background, the ACCC noted that TripAdvisor offers a service called “Review Express”. Participating accommodation providers provide TripAdvisor with email addresses of recent customers who have consented to their details being passed on. TripAdvisor then emails the customers, prompting them to submit a review of their recent experience with that business.
Meriton offers accommodation under the brand Meriton Serviced Apartments. During the relevant period, Meriton offered serviced apartment accommodation in at least 13 properties in NSW and Queensland. Meriton is part of the Meriton Group of companies.
TripAdvisor states that accommodation providers that regularly use the “Review Express” service see an increase in TripAdvisor reviews for their properties of 28% to 33%.
In yesterday’s judgement, as well as the AUD 3 million fine, the Federal Court ordered a three-year restraint on Meriton to prevent it “from filtering, selecting or limiting the guest email addresses it supplies to TripAdvisor in relation to its use of TripAdvisor’s Review Express service”.
Meriton was also ordered to establish a compliance and education/training program to ensure its employees understood their responsibilities and obligations over such matters in respect of the Australian Consumer Law.
Edited by Peter Needham
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