The Commerce Commission is taking court action against Top Reviews and Auckland Magazine, alleging these websites continue to approach New Zealand businesses for favourable rankings while presenting their reviews as independent and impartial.
The Commission is asking the High Court to stop the allegedly misleading content and seeking orders that would enable access to the websites to be blocked in New Zealand while the conduct continues.
Deputy Chair Anne Callinan said the Commission is concerned about the impact of the alleged conduct on small and medium-sized New Zealand businesses, as well as consumers who may rely on online rankings when deciding where to spend their money.
“Small businesses shouldn’t be misled into paying for favourable online rankings or feel pressured to pay because they believe their competitors are doing the same.”
“If a website says its rankings are independent, businesses and consumers should be able to take that at face value. Payment shouldn’t be influencing who ranks highly without that being made clear,” Ms Callinan said.
Top Reviews and Auckland Magazine publish reviews of New Zealand businesses, often ranking them in lists such as “The 10 Best” in a particular category. The websites give people the impression that the reviews are independent and genuine and have been produced by local “staff writers”.
The websites concerned have suggested they provide honest, impartial reviews. However, the Commission alleges the reality behind the reviews is different.
“Some local businesses have told us they weren’t aware they were featured on these websites, and some of the information about them was inaccurate,” Ms Callinan said.
“The websites have also suggested their writers had spoken to customers or used the goods and services they were reviewing when that wasn’t the case.”
The websites also give the impression they are based in New Zealand, using New Zealand addresses. However, the Commission’s investigation found no presence in New Zealand and that the websites operate from overseas.
The Commission also found some of the people presented as “staff writers” were real people who had no idea their identities were being used by the websites.
Ms Callinan said the alleged conduct also risks disadvantaging businesses that choose not to pay.
“Businesses shouldn’t be put at a disadvantage because a competitor appears to have earned a higher ranking when that position may actually have been paid for.”
“Consumers need to know whether a ranking is genuinely independent or commercially influenced. And businesses need to have confidence they’re competing on a level playing field, rather than being pushed to pay to keep up.”
“Online sales conduct is an enforcement priority for us, and we’ll act where we consider misleading online practices are harming New Zealand consumers or businesses.”
Commission taking court action
The Commission is seeking declarations that Top Reviews and Auckland Magazine have breached sections 9, 11, 13(e) and 13(j) of the Fair Trading Act, as well as an injunction to prevent further breaches.
It has also sought the cooperation of major internet service providers and the Domain Name Commission to take steps to block the websites from continuing to display the allegedly misleading content as non-parties to the court order.
“Being based offshore doesn’t put a website beyond our attention when its conduct targets New Zealand consumers and businesses,” Ms Callinan said.
Background
The Commission has taken a range of steps to try to have the websites taken down and/or the allegedly misleading content removed before deciding to seek a court order.
In December, the Commission issued a Stop Now letter to both websites. Despite this, the alleged conduct has continued.
The Commission has filed a statement of claim and is now seeking an injunction in the Auckland High Court. An injunction is a court order requiring a person or business to do, or stop doing, something. In this case, the Commission is asking the Court to prevent the websites from continuing the conduct alleged in its proceedings and for the major internet service providers to block access to the sites while the misleading conduct persists.
What affected businesses can do
Businesses that have been approached by Top Reviews or Auckland Magazine, have paid to feature on either website, or are concerned about information published about their business can report their experience to the Commerce Commission.
Businesses concerned about a payment they have made may also wish to contact their bank or payment provider to discuss what options may be available to them.
Concerns can be reported by calling 0800 943 600 or raising a concern online.
What businesses need to know about online reviews
Online reviews are an important source of information for consumers considering buying goods and services.
Reviews must be genuine and presented in a way that does not mislead people about the overall message of the review.
Businesses publishing reviews or rankings should also clearly disclose any relationship that could affect their impartiality, including payment.
The Commission has published guidance to help businesses meet their obligations when collecting or publishing customer reviews.
What consumers can do
When you're relying on online reviews or rankings:
- Check more than one source before making a decision
- consider who is behind the review or ranking and whether any commercial relationship is disclosed
- Remember that a .co.nz address doesn't necessarily mean a website is based in New Zealand
- If you think you've been misled by an online trader, you can report your concern to the Commerce Commission by calling 0800 943 600 or raise a concern with us online.