The Australian Competition and Consumer Commission (ACCC) has reinforced its stance against the publication of false testimonies and reviews online instituting proceedings against A Whistle (1979) Pty Ltd trading as Electrodry Carpet Cleaning (Electrodry).
Electrody is a franchise business that offers carpet and upholstery cleaning services. The ACCC alleges Electrodry engaged a contractor to publish fictitious reviews online constituting misleading and deceptive conduct. The fake reviews appeared on a number of popular internet review websites such as True Local, Word of Mouth and Google. As a franchisor Electrodry is said also to have encouraged franchisees to publish false testimonials online.
In 2013, the ACCC released guidelines include a broad set of ‘principles’ that are aimed at reducing the number of misleading, solicited and fictitious reviews online. The publication of false or misleading information may also be in violation of the Competition and Consumer Act 2010 (Cth) (CCA).
According to section 18 of Schedule 2 of the CCA: “a person must not, in trade or commerce, engage in conduct that is misleading and deceptive or is likely to mislead or deceive” The ACCC is seeking a declaration that Electrodry breached the CCA, as well as penalties, injunctions and the publication of corrective notices. There are steps businesses can take to avoid breaching the CCA and ACCC guidelines:
- Where a business has an arrangement or commercial relationship with a reviewed business it is important to clearly inform consumers of the extent of that relationship and how it influences the review;
- While incentives may be offered to users to submit reviews, these incentives must apply equally to positive and negative reviews. Businesses should specify at the point of submission that the incentive is not response dependent;
- Reviews should be displayed in a way that does not distort their value. For example, if a product or service is rated then the total number of reviews submitted should be clearly displayed.
- Businesses should not submit reviews concerning themselves or encourage family or friends to do the same.
Links and further references
Legislation
Competition and Consumer Act 2010 (Cth)
Competition and Consumer Legislation Amendment Act 2011 (Cth) Schedule 2
Cases
Other links
ACCC Advertising your business – Social Media
ACCC Guide for business and review platforms
Further information
If you need further information, contact us for confidential and obligation-free discussion:
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au
Disclaimer
This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.
Related insights about litigation and disputes
-
Telegram terror content: eSafety alleges Online Safety Act breach
Australia’s eSafety Commissioner has commenced civil penalty proceedings in the Federal Court of Australia (Court) against Emirati-based Telegram FZ-LLC (Trade License Number 94349) (Telegram), alleging that it failed to comply with obligations to detect, deter and disrupt the distribution of pro-terror material and remove unlawful material from its messaging service. The proceedings, eSafety Commissioner v…
-
Default discovery: Queensland vs Federal position
In the Supreme Court of Queensland (Supreme Court), the right to an exchange of documents is the default position in proceedings started by claim, while in the Federal Court of Australia (Federal Court) there is no entitlement to exchange of documents, and a party must persuade the Court that this exchange is necessary, proportionate and…
-
AI compliance programs: one size does not fit all
Australia does not have any standalone legislation addressing how businesses can safely implement Artificial Intelligence (AI). Use of AI by Australian businesses is, however, regulated, not by a patchwork combination of Federal and State legislation, industry-specific legislation and standards, professional body rules and guidance issued by government departments and other regulators. This article discusses the…
-
AI evidence misleading Court: Ba v Sterling Parts Australia
On 17 June 2026, Symons J delivered judgment in the case of Ba v Sterling Parts Australia Pty Ltd [2026] FedCFamC2G 1245 (Ba v Sterling Parts). Ba v Sterling Parts was a proceeding brought by Weiman Ba (Applicant) in the second division of the Federal Circuit and Family Court of Australia (Court). Symons J dismissed…
-
Is a breach of directors’ duties also shareholder oppression?
In Our Jim & Felicja Superfund v Lindenfels [2026] FCA 307, the Federal Court dismissed minority shareholders’ claims that a majority investor’s contracts and dilutive rights issues were oppressive. We explain why a breach of duty is not the same as oppression.
-
Does shareholder oppression apply to a private equity fund?
Shareholder oppression can reach a private equity fund where companies manage its limited partnerships. This article explains how the Federal Court applied sections 232 and 233 of the Corporations Act in WIJOAV v Goldstone, including to an equal shareholder.
-
Mere puffery vs misleading and deceptive conduct – where is the line?
In the case of Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54 (ACCC v TPG), the High Court of Australia (High Court) drew a distinction between mere puffery and representations with the intention of marketing. This article explores the decision in ACCC v TPG and the distinction between puffery and…
-
Federal Court publishes GenAI Practice Note
On 16 April 2026, the Federal Court of Australia (Court) published the Use of Generative Artificial Intelligence Practice Note (GPN-AI) (Cth) (GenAI Practice Note).
-
Evidence of economic loss required in defamation cases
Australian Security Academy Pty Ltd v Australasian Institute of Chartered Loss Adjusters Pty Ltd (No 2) [2025] FCA 924 (Australian Security Academy) involved alleged defamatory imputations against Australian Security Academy Pty Ltd (Applicant) by the Australian Institute of Chartered Loss Adjusters Pty Ltd (Respondent). The decision highlights that no defamatory imputations will exist where no…
