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Business

Consumer watchdog the ACCC is hunting down ‘greenwashing’, undisclosed influencer ads on social media, and fake online reviews

- October 4, 2022 2 MIN READ
Photo: AdobeStock

ACCC Deputy Chair Delia Rickard said the online sweep over the coming weeks with see it review at least 200 company websites in the hunt for misleading environmental claims.

“As consumers become increasingly interested in purchasing sustainable products, there are growing concerns that some businesses are falsely promoting their environmental or green credentials. Misleading claims about products or services undermine consumer trust and confidence in the market,” ACCC Deputy Chair Delia Rickard said.

“This sweep forms a core part of our work in actively monitoring for ‘greenwashing’ in the market and will help inform what steps businesses can take to improve the integrity of their environmental claims.”

At the same time, the ACCC is conducting a similar investigation targeting fake or misleading online reviews and testimonials, checking business websites, Facebook pages and third-party review platforms.

At least 100 businesses will be reviewed in this initial sweep, targeting areas in which people most commonly rely on reviews including household appliances, electronics, fashion, beauty products, food and restaurants, travel services, sport, home improvement, kitchenware, health products, as well as furniture and bedding.

Misleading ads by influencers on social media will be considered in a second sweep that will seek to on identify posts that don’t disclose advertising or sponsorship.

“Unfortunately, consumers are facing an ever-increasing range of manipulative marketing techniques designed to exploit or pressure them, due in part to the huge number of online information sources available. Consumers often rely on reviews and testimonials when making purchases, but misleading reviews can be harmful,” Rickard said.

The ACCC action comes as celebrity influencer Kim Kardashian copped a US$1 million (A$1.5m) fine from US regulator US Securities and Exchange Commission (SEC) settlement for not disclosing she’d been paid US$250,000 to spruik Ethereum Max tokens to her 330 million Instagram followers.

She was banned from promoting crypto currencies for three years as part of the settlement with the SEC.

Meanwhile, the ACCC Deputy Chair said the Australian regulator will be looking to identify businesses, review platforms or sectors where there is a pattern of misleading online reviews and testimonials.

“Businesses can also be significantly impacted, particularly by negative reviews at the hands of competitors or third-party professional reviewers acting on behalf of a business. Review manipulation of any kind can impact a business’ star or numeric rating, leading to an overall misleading impression of the business,” Rickard said

“Both positive and negative reviews and testimonials – including those that are incentivised – can be false or misleading, particularly if they are presented as impartial but are not.”

The ACCC will publish the findings of the sweeps once they are collated and analysed.

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