News & Insights

Nobody likes a bad review.  Unfortunately the perceived anonymity of the online environment has emboldened so-called “keyboard warriors” to vent their spleens and get stuck in when leaving reviews.

So what can a business do when it’s on the receiving end of such a parcel of online bile?

legal options

Legal options for dealing with negative online reviews are, unfortunately, very limited.

1.  defamation

A number of high-profile celebrities have recently used defamation proceedings to successfully defend their reputations.  Defamation is available where there has been a publication that identifies a person and contains a defamatory meaning (a meaning that damages or lowers the reputation of that person in the eyes of other third parties).

However, defamation is not a cause of action available to everybody.  In the business context, it can be used by:

• individuals; and
• businesses with fewer than 10 full-time-equivalent employees.

An individual might be a sole trader or a named employee of a business.

Beware: even if the business cannot bring a defamation action, a defamatory public reply (perhaps said, written or posted in the heat of the moment) can land the business on the receiving end of one.

2. injurious Falsehood

Although it has a “ye olde worlde” name, an action for injurious falsehood is typically the alternative course of action available where a claim for defamation is not (eg. a business with more than 10 full-time-equivalent employees).

The key threshold elements for a successful action for injurious falsehood are:

• a completely false statement has been made about the business or its products;
• the statement has been made or published to third parties;
• the party making the statement has acted with the intentional motive of malice; and
• the business has suffered economic loss or damage as a direct result.

Injurious falsehood is more difficult to establish than defamation, due to the requirements of both malice and economic loss.

3. australian consumer law action

The Australian Consumer Law allows actions to be brought where a person:

• in trade or commerce engages in conduct that is misleading or deceptive or likely to mislead or deceive;
• in trade or commerce makes a range of false or misleading representations.

The difficulty here is that where the review is posted by an individual (ie “ordinary mum or dad”) buyer then they will not have done so in trade or commerce.  However such an action may be available against somebody who:

• is a business purchaser; or
• operates some other business related to their reviewing activity, such as a blogger who generates advertising revenue on their blog. 

4. blackmail

If a customer threatens to leave a negative review unless they receive some sort of benefit that they are not entitled to, then this is blackmail.  Websites such as Google or Facebook usually have report or business contact centres.  While they will not remove a review simply because it is negative, they will respond to genuine extortion attempts.

In extreme cases, a report to the police may be warranted.  But beware: threatening to report the reviewer to the police can itself constitute blackmail.  If you intend to make a police report, just do it, don’t threaten it.

non-legal options

You should also remember that a customer/client who provides negative feedback is also providing a valuable opportunity to learn and do better, and also to set things right.  They are preferable to the customer/client who just never comes back and instead bad-mouths you behind your back.

If a negative review has been left online and the website allows an opportunity for you to respond, this can also demonstrate to other website visitors that you are responsive to concerns.

Even if that message is “Thank you for your feedback.  We will contact you to discuss and address your concerns”, it can serve to mitigate the immediate and follow-on damage caused by an unhappy customer, provided that you then actually do make contact.  Remember also to keep all such responses polite, truthful, factual and unemotional.

This article was written by Nils Versemann, Senior Associate – Commercial and Kelly Dickson, Principal Lawyer – Commercial. 

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.