Billionaire property developer Harry Triguboff’s Meriton Property Services will fight legal action alleging the business tried to prevent negative reviews being posted on TripAdvisor by altering the emails of guests.
Triguboff is Australia’s richest man, topping the BRW Rich list this year with $10.62 billion.
The Federal Court action, launched by the Australian Competition and Consumer Commission (ACCC), alleges Meriton “engaged in misleading or deceptive conduct” over a 12-month period between November 2014 and October 2015, to stop guests it suspected would give a negative review from receiving TripAdvisor’s “Review Express” email.
Triguboff’s Meriton Serviced Apartment business, which launched in 2003, is now Australia’s biggest hotelier, with 4403 suites across 17 apartment towers in Sydney, Brisbane and on the Gold Coast. The business has a gross annual turnover in excess of $380 million.
The ACCC says that during the period in question Meriton had 13 properties and was a participating business in a TripAdvisor service called “Review Express”, which involved Meriton sending the travel review website the email addresses of recent customers who consented to passing on their details.
TripAdvisor then emails the customers to submit a review of their stay.
The ACCC alleges Meriton inserted additional letters into the email addresses provided to TripAdvisor to render them ineffective and did it several times when problems occurred in the hotels, such as a lack of hot water or a lift not working.
ACCC commissioner Sarah Court said they will allege it was a deliberate practice under directions from Meriton’s senior management
“This practice was likely to create a more positive or favourable impression of the standard, quality or suitability of accommodation services provided by Meriton,” she said.
“Consumers rely on independent review platforms like TripAdvisor when making purchasing decisions. If reviews are manipulated to falsely create a more favourable impression about a provider, consumers may choose that provider on the basis of that falsehood over another accommodation provider who has not engaged in misleading conduct.”
Responding to the ACCC’s action, Meriton’s group general counsel, Joseph Callaghan, told Business Insider they will defend the proceedings.
“In every Meriton Serviced Apartment there is a notice inviting all guests to review their stay on TripAdvisor. Meriton does not agree that the public has ever been deceived or misled,” he said.
The manipulation of online reviews has been a key focus for the ACCC in recent years, and two months ago, the consumer watchdog announced it was investigating the authenticity of customer reviews for “sharing economy” companies such as Uber and Airbnb, as well as testimonials on online review websites such as TripAdvisor and Zomato, and sharing platforms such as Kickstarter and Airtasker.
Australian Consumer Law prohibits businesses from making or inducing false or misleading representations through testimonials.
The ACCC first announced it was monitoring the internet for fake reviews in 2013, and issued 40 “please explain” letters to businesses, including 28 in NSW, the following year.
One, a solar panel business, was fined $125,000 – the largest penalty in the world at the time – for fake YouTube testimonials.
Companies face fines of up to $1.1 million for serious breaches.
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