The consumer watchdog is investigating Uber and Airbnb’s customer reviews

A listing in Sydney. Photo: Airbnb.

The consumer watchdog is investigating whether customer reviews for “sharing economy” companies such as Uber and Airbnb are legitimate as part of an investigation into the sector.

The Australian Competition and Consumer Commission is teaming up with consumer agencies overseas to investigate whether online platforms are sufficiently managing customer reviews and not breaching the law.

Australian Consumer Law prohibits businesses from making or inducing false or misleading representations through testimonials. This includes testimonials on online review websites such as TripAdvisor and Zomato, as well as sharing platforms such as Kickstarter and Airtasker.

“The sharing economy is a fantastic development and offers a range of benefits for consumers and businesses,” ACCC deputy chairwoman Delia Rickard said.

“However, operators of sharing economy platforms must make sure that they have appropriate policies to regulate the use of reviews to avoid misleading consumers.”

Airbnb homepage. Photo: Airbnb.

The ACCC said businesses were required to be transparent about commercial relationships and not let these influence the order in which reviews were published.

It said companies were prohibited from posting or publishing misleading reviews and editing or deleting unfavourable reviews, which itself could be misleading.

Amazon took 1000 people to court in the United States last year for allegedly offering to post fake glowing write-ups for $5.

Yelp and TripAdvisor have also been targets of criticism about phoney reviews of hotels and businesses.

Uber requires its drivers to maintain a high level of positive reviews from customers in order to stay on the platform.

The ACCC said it planned to release guidance for businesses and individuals involved with the sharing economy later this year.

This article originally appeared on the Sydney Morning Herald’s Business Day. Read the original here, or follow Business Day on Facebook.