The Australian Federal Court has concluded that property giant Meriton interfered with guests being able to review its serviced apartments on TripAdvisor.
The Australian Competition and Consumer Commission (ACCC) began action against Meriton in November 2016 when the property giant was allegedly preventing users from using TripAdvisor's "Review Express" service -- an arrangement where accommodation businesses pass on consenting customer email addresses so that the review site may email them prompting them to review their stay.
The court concluded that between November 2014 to October 2015, Meriton had engaged in misleading or deceptive conduct with the addition of extra characters into email addresses to prevent the TripAdvisor emails from reaching their intended inbox, or not passing the details on at all.
In several instances where its hotels had issues, such as broken lifts or a lack of hot water, the court found that Meriton had steered the emails away from a majority of its guests.
"The court found that Meriton, at the direction of management, deliberately implemented a strategy to minimise the number of negative reviews its guests posted on TripAdvisor," ACCC Commissioner Sarah Court said in a statement on Friday.
"In reducing the chances of a customer posting a negative review, Meriton created a created a more positive or favourable impression of the quality or amenity of the Meriton properties on the TripAdvisor website.
"This decision sends a strong message that businesses must not undermine the integrity of third party review processes in order to mislead or deceive consumers, as this conduct risks breaching the Australian Consumer Law."
The ACCC said last year it would be seeking pecuniary penalties, declarations, injunctions, corrective publication orders, and orders for the implementation of a consumer law compliance program and costs. A relief hearing is yet to take place.
In September, the ACCC was not successful in its case against LG Electronics Australia, with the Federal Court tossing out claims that the South Korean electronics company had made false or misleading representations to consumers about their rights in relation to faulty LG products, including TVs.
The competition watchdog had previously brought legal action against LG for misleading or deceptive conduct in 2005, 2006, and 2010.
The ACCC was, however, successful in its case against US-based video game distributor Valve Corporation, with the Federal Court concluding that Valve had made false or misleading representations regarding the application of the consumer guarantees, and was ordered to pay AU$3 million.
"These proceedings, and the significant penalties imposed, should send a strong message to all online traders operating overseas that they must comply with the Australian Consumer Law when they sell to Australian consumers," then ACCC acting chair Dr Michael Schaper said at the start of the year.