Online reviews have become a powerful tool utilized by both business owners and consumers. For the former, reviews are now an important part of their public reputation and help them spread the word about their goods and services. For consumers, reviews have become a significant platform to help them make a decision about where to spend their money.
However, the power of reviews comes with legal implications when an online post is alleged to have damaged the reputation of a business and possibly caused the owner financial loss. In these cases the subject of the view may have potential actions for defamation, injurious falsehood, and misleading and deceptive conduct under section 18 of the Australian Consumer Law (ACL).
What are the elements for a business review to be defamatory?
Defamation refers to the act of making false statements about someone or something that causes harm to their reputation. For a statement to be defamatory, it must meet certain criteria.
Firstly, the statement must be communicated to a third party, which occurs when a post is published on Google Reviews, for example. The statement must also identify the subject, either explicitly or implicitly. In the case of businesses, a negative review about a specific company would typically meet this criterion.
Next, the statement must convey a defamatory meaning which harms the subject’s reputation or exposes them to ridicule, hatred, or contempt. Furthermore, the statement must be false. Truth is a complete defence against defamation claims.
Finally, the defamatory statement must cause harm to the subject’s reputation, leading to financial or non-financial losses.
What can a business do about a review it regards as defamatory?
If a business believes that a Google or other online review of their goods and services contains defamatory content, it can take legal action against the reviewer. In Australia, defamation law allows for individuals and certain ‘excluded’ corporations to sue for defamation. Under uniform defamation legislation applying in every state and territory, corporations that are not-for-profit or employ fewer than 10 people can take action for defamation, while large companies cannot.
Some of the possible actions a business can pursue include:
Cause of Concern Notice: In most cases businesses will typically be advised by their legal representatives to send a cause of concern notice to the reviewer, requesting that they remove or edit the defamatory content. This course of action can often resolve the matter without the need for formal legal action which can be both costly and time-consuming. In some cases, businesses may request Google or another service provider to remove the defamatory review. Online companies such as Google maintain policies for removing content that violates its guidelines, including defamatory material, though disagreements frequently arise over use of this discretion by service providers.
Injurious falsehood: Injurious falsehood, also known as trade libel, occurs when false statements which harm a business’ financial interests are published to a third party. If a Google Review contains false information that has caused financial losses, a business can pursue injurious falsehood claims against the reviewer. This claim can be difficult to prove, requiring the plaintiff to prove that the defendant acted maliciously to harm the plaintiff in posting the review and secondly, the statement caused actual damage, such as a loss in sales or decline custom.
Action for defamation: If the cause of concern notice is ineffective, a business can file for defamation. The court will assess the content of the review, its impact on the business’ reputation, and the truthfulness of the statements. In defamation the plaintiff must prove the defendant’s review, in this example, contained one or more defamatory ‘imputations’, or negative claims, about a person or their behaviour. The negative imputation of a review suggesting the food at a restaurant was awful, for instance, might be that the chef and other staff are incompetent and unqualified.
A number of defences exist to a defamation action, of which the most common are:
- the defendant is able to show that what was published was substantially true;
- the defendant argues they were offering their honest opinion, rather than making a statement of fact; or
- the defendant was innocently distributing material which they were not aware was defamatory.
Actions for Misleading and Deceptive Conduct under the Australian Consumer Law
In addition to defamation and injurious falsehood, businesses in Australia can also consider taking action under the ACL. Section 18 of the ACL prohibits misleading and deceptive conduct in trade or commerce. This provision has been applied to online reviews in certain circumstances.
If a Google Review contains false or misleading statements that could potentially deceive consumers and harm a business’s commercial interests, a business may have a case under section 18 of the ACL.
Any action considered under this provision should closely consider the following before commencing:
- Whether the review contains statements that are false or misleading, including claims about a product’s quality, safety, or the business’s conduct.
- Whether the review was part of trade or commerce, meaning it relates to the supply of goods or services. Google Reviews about a business often fall within this category.
- Whether the false or misleading statements actually caused or are likely to cause harm to the commercial interests of the business.
Unlike legal action for defamation or injurious falsehood, section 18 of the ACL does not require proof of malicious intent on behalf of the person who posted the review, but instead focuses on the effect of the conduct.
What remedies can be sought for any of these actions?
When pursuing legal action for defamation, injurious falsehood, or misleading and deceptive conduct, various remedies may be available for a successful outcome.
A business or individual may be awarded monetary compensation to cover the losses incurred due to the defamatory or misleading content. The court may issue an injunction to prevent the reviewer from further posting defamatory or misleading content. In some cases, the court may order the reviewer to issue an apology or a correction to rectify the harm caused. The court may also order the losing party to pay the legal costs of the successful party.
Seek expert legal advice
Google Reviews have immense power to shape public opinion and affect businesses’ reputations. But if a business believes that a Google Review contains defamatory, injurious, or misleading content, it has legal avenues to address the issue. The advice of our expert team at PD Law should be sought if you are in the position of either plaintiff or defendant in the situation described in this article. We can clarify the issues involved and help guide you on the best way forward in what can be a difficult area of the law.
