Online reviews are a great resource for businesses. Customers tend to trust online reviews and online review sites.
The problem arises however that a business might have hundreds of content customers who do not leave online reviews, but unhappy customers have a lot of motivation to post online reviews, as a result of which the review site may leave a bad impression of the business.
Some review sites have a process to attempt to correct unfair reviews. That said significant damage can be done and it can be done in a short amount of time. In some circumstances the business can have remedies against the reviewer.
There can be issues with this in identifying the reviewer (some individuals are motivated enough to create fake profiles and target a business repeatedly), however if that can be done, there are possibilities for the business to take action in respect of a negative review if certain criteria are met.
First, if the business is operated by individuals, then it is possible for action to be taken in defamation, provided that the publication is materially untrue, or at least the imputations that come from the publication are untrue. Furthermore, the defence of truth might avoid the consequences of a defamation proceeding if the review is obviously one of opinion, in certain circumstances.
Corporations generally have no action for defamation unless they are “excluded corporations” under the defamation legislation in Australia. There are a few categories of excluded corporations, the most significant test is that it employs fewer than 10 persons (or slightly more in the case that some are part time), however there are qualifications to that. It would be correct to say that many small businesses operated by corporations with less than 10 employees would have the right to bring an action in defamation.
If an action in defamation is not available (for example if a company has more than 10 employees), there are some other causes of action that might be available. One is in a case where (for example) a competitor has caused the adverse review to be made. In that case, the competitor may have engaged in misleading or deceptive conduct contrary to the Australian Consumer Law.
Another is what is known as the tort of injurious falsehood. This is similar to defamation, however more difficult to establish because:
- The statement must be false;
- It must be motivated by malice – this can be difficult to prove because it has to be shown that the reviewer intended to cause harm to the business; and
- That actual loss has to have been suffered. This third aspect means that there is a higher test of showing that – not only is it likely that the business will suffer, but that it has in fact suffered.