The ACCC is currently scrutinising misleading online reviews and influencer endorsements to ensure they comply with Australian Consumer Law.
The consumer watchdog has so far found that of the 118 social media influencer reviews, 81 per cent were found to be making posts that raised concerns under the Australian Consumer Law for potentially misleading advertising.
Of the 137 businesses reviewed in a separate sweep to identify fake or misleading online reviews, it found that 37 per cent of the businesses had engaged in concerning conduct.
Catriona Lowe, Acting Chair of the ACCC, said influencers and businesses need to review their practices and improve compliance with the Australian Consumer Law to ensure consumers can trust the information they find online.
“Influencers often cultivate an image of themselves as being relatable and genuine, which can create an element of trust with their followers when it comes to recommendations.
“Based on the findings of our sweep, we are concerned that influencers, brands, and advertisers are taking advantage of consumers’ trust through hidden advertising in social media posts by influencers,” said Lowe.
Looking at businesses, the sectors with the highest proportion of potentially fake or misleading online reviews were household appliances and electronics, beauty products, and home improvement and household products and services.
“Our sweep indicates that some businesses are manipulating online reviews to present a more favourable impression of their business to consumers.
“Businesses that seek to create fake reviews or edit or remove genuine negative reviews, with the intention of inflating their own ratings, lowering their competitors’ ratings, or hiding genuine negative reviews from the public, are in breach of the Australian Consumer Law.
“Whilst it may be important to businesses to manage their online reputation, they need to ensure that in doing so they are not misleading consumers.”
The ACCC will release guidance in early 2024 for influencers and businesses to remind them of their obligations under the Australian Consumer Law to disclose advertising in social media posts.
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