‘The Hotel Stinks’: Online Reviews and Consumer Law

(by Daithí Mac Síthigh) Two stories in the news this week serve as useful reminders of the significance of consumer law for online review sites.  The subject of both reports is TripAdvisor, which was also the topic of a wry Channel 4 documentary late last year in the ‘Cutting Edge’ series (Attack of the Trip Advisors).

The first story comes from Ireland (‘Hotel group staff asked to write positive web reviews‘, Irish Times, 31.1.2012), and it tells of a memo sent to the staff of a hotel group appearing to ask them to post reviews (including suitably non-professional photographs).  The article discusses the memo, and the response of the solicitors of the hotel group, which explained that the memo was a mistake and had been replaced.  One assumes, of course, that reviews posted by hotel staff will be positive reviews; the study by Vermeulen & Seegers (2008) observes that positive reviews improve attitudes towards hotels (more than negative reviews do for unfavourable attitudes), although all reviews increase awareness.

Indeed, although not perhaps as well known as it should be, the Unfair Commercial Practices directive (2005/29/EC) includes in its ‘blacklist’ of misleading commercial practices which are in all circumstances considered unfair ‘falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer‘.  In the UK, regulations 12 and 13 of the Consumer Protection from Unfair Trading Regulations 2008 (enforced by the OFT and local authorities) make this a criminal offence, punishable by a fine of up to £5000 and/or (on indictment) a prison sentence of up to two years.  That said, the need to distinguish between consumer and trader is not a new one; see for example the way that classified ads in local newspapers have long marked trade ads with a T, to comply with Business Advertisements  (Disclosure) Order 1977 made under the Fair Trading Act 1973).

In the light of this provision, then, a business concerned about what’s said on a review site is better advised to register with the site and post responses, to make other information available online, to contact review site operators if there is a concern about the legality of posted material (defamation cases are on the way…), and so on.  This is quite the challenge; the Channel 4 documentary referred to above did demonstrate how seriously some users of TripAdvisor take their reviewing duties (saving the best bits for the website, not the conversation with the owner), and as the study by Cunningham et al (on Ireland, as it happens) demonstrates, the ‘TripAdvisor effect’ is significant, particularly in the early days of the adoption of the site in a given market.

Hotels dissatisfied with TripAdvisor are the cause of the second story, which is a determination (in response to complaints from hotels and the ‘reputation management’ service KwikChex, which has also been involved in the defamation cases) of the Advertising Standards Authority (complaint A11-166867, published 1.2.2012). The ASA ruled that TripAdvisor itself cannot make the claim that it comprises “reviews from real travellers” or that all of the reviews on the site are honest, real or trusted.  This is because this authenticity cannot be demonstrated, and consumers cannot be expected to be able to tell the difference between those that are from ‘real travellers’ and those that are not.  Interestingly, KwikChex says it is critical of TripAdvisor because of fraudulent reviews (including those by competitors), which must surely include ‘fake negative’ reviews alongside the ‘fake positive’ reviews discussed in the first story).

This determination (based on the sections of the Code of Advertising Practice dealing with misleading advertising and substantiation) is of special significance, as following changes to the ASA’s scheme for the regulation of advertising in 2011, it applies to the claims made by companies on their own websites (i.e. not just ‘paid-for’ ad space elsewhere).  TripAdvisor is therefore instructed (in the UK, at least) to remove these claims.  It’s not the best of publicity for the site, but it’s unlikely to have a significant impact on its popularity, not least because a search for the name of the hotel typically includes the TripAdvisor page on that hotel at a high place in the ranked results.

Both stories demonstrate the degree to which some enterprises are concerned about the impact of reviews published on TripAdvisor, and are taking various steps (of varying legality and success) to ameliorate that impact.

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