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Australian firm Meriton fined $3M for misleading consumers on TripAdvisor

199 points by markdown 8y ago

devoply 8y ago
$3M seems way excessive for a company that owns 15 properties. However it seems this is a big company: https://en.wikipedia.org/wiki/Meriton https://en.wikipedia.org/wiki/Meriton
- markdown 8y ago
  > Meriton is Australia's largest apartment developer and also the country's biggest residential home builder founded by Harry Triguboff AO, its managing director, in 1963. Meriton sells apartments and also operates serviced apartments accommodation under its Meriton Suites brand in Sydney, Brisbane and the Gold Coast. > In 2007, it was estimated the company was building about 1,200 apartments each year. By 2010 this figure had increased to 2,000 units. It is estimated that over the past 50 years, Meriton has built more than 65,000 residential apartments on the east coast of Australia. It also offers serviced accommodation in 17 locations. > 2014 was a record year for the apartment developer, with the company’s annual turnover rising more than 50 per cent to $2 billion https://en.wikipedia.org/wiki/Meriton https://en.wikipedia.org/wiki/Meriton
- broodbucket 8y ago
  from Wikipedia: 2014 was a record year for the apartment developer, with the company’s annual turnover rising more than 50 per cent to $2 billion, bringing it to 11th place in IBISWorld's 2014 Top 500 Companies, up from 29th spot the previous year. The HIA-Colorbond steel Housing 100 named Meriton as Australia’s largest residential home builder, up more than 5000 housing starts, from 2573 in FY2013-14 to 7929. Based on this figure, new homes by Meriton accounted for around 10 per cent of all multi-unit dwellings commenced in Australia, and 29.5 per cent of all multi-unit dwellings commenced in New South Wales. Meriton projects equated to approximately 0.05 per cent of Australia’s GDP. --- ...yeah I think they'll be fine.
- ape4 8y ago
  About US$2.2M, which is still a lot.
  - ShorsHammer 8y ago
    It's absolutely nothing for a company this size.
    - thereiwas 8y ago
      Maybe the precedent was more important?
      - ShorsHammer 8y ago
        I'm guessing that is the case, especially considering it was a precedent, seems to be more about shooting across the bow of large companies engaging in this behaviour and putting them on notice rather than actual punishment.
- taspeotis 8y ago
  15 properties isn't ... 15 houses ... here's one property https://www.meriton.com.au/wp-content/uploads/Meriton-Southport-8.8.17-Final-1-e1503013598580.jpg https://www.meriton.com.au/wp-content/uploads/Meriton-Southp...
- anoplus 8y ago
  Just an idea. Why not penalize by percentage? If the goal of penalties is to prevent companies from breaking laws that are equally valid for everyone. Otherwise, companies holding most capital will be practically above the law.
  - conquistadog 8y ago
    Right. Given their size, I'm not sure how painful this amount would be to the offender. Too low, and it's just a cost of doing business. A percentage penalty (of nationwide if not worldwide revenue) might prove much more concerning to them, much as we're seeing with general alarm caused by the fear of the GDPR's percentage penalty.
  - hayyyyydos 8y ago
    > Why not penalize by percentage? The ACCC usually does do it this way. Some recent examples: https://www.accc.gov.au/media-release/air-nz-penalised-15-million-for-price-fixing https://www.accc.gov.au/media-release/air-nz-penalised-15-mi... - Air NZ penalised $15m https://www.accc.gov.au/media-release/iphone-and-ipad-misrepresentations-cost-apple-inc-9-million-in-penalties https://www.accc.gov.au/media-release/iphone-and-ipad-misrep... - Apple fined $9m https://www.accc.gov.au/media-release/domain-name-corp-and-domain-name-agency-to-pay-195-million-in-penalties https://www.accc.gov.au/media-release/domain-name-corp-and-d... - Domain Name Corp/Agency fined $1.95m You'll see that most of these amounts are pretty close to the amount the companies made from the activities and scale with the size of their operations
RileyJames 8y ago
The precedent this sets is interesting. From my interpretation, a business must request reviews from all customers, via all methods, for each platform, in order to not be considered ‘manipulating consumers’. This will have impacts for all the saas review management products, as their key selling point is usually: get more reviews from your happy customers, or stop your unhappy customers posting reviews. Which is usually done by targeting or omitting either group. Any Australian business using such product would now be on the hook.
- tomglynch 8y ago
  I think it is just, if you are to request reviews, then you should request reviews equally from all customers.
- paxy 8y ago
  > From my interpretation, a business must request reviews from all customers, via all methods, for each platform, in order to not be considered ‘manipulating consumers’ There is definitely room for broader enforcement of this judgement, but I don't think your interpretation is correct, especially the "via all methods, for each platform" part. For this specific case, the practice of selectively sending email addresses for 'Review Express' is explicitly considered fraud under TripAdvisor's terms of service (scroll all the way down https://www.tripadvisor.com/TripAdvisorInsights/w789 https://www.tripadvisor.com/TripAdvisorInsights/w789 and https://www.tripadvisorsupport.com/hc/en-us/articles/200615037-What-is-considered-fraud- https://www.tripadvisorsupport.com/hc/en-us/articles/2006150...), so I imagine this made the court's decision easier.
- hn_throwaway_99 8y ago
  Yeah, I'm hoping there was just some info missing from the article, but this decision seems all sorts of fucked up. All Trip Advisor Review Express really does automate the process of requesting reviews on Trip Advisor. It's not much harder to just email out requests to guests yourself. So is this decision saying if you only emailed requests to people who thought would give you a good review, but not a bad review, that you are guilty of something? If so, literally 99% of businesses would be guilty of this. When someone calls to complain, every business tries to handle it in house. It's not like they say "Oh, I'm sorry you had a bad experience, let me get you the contact info for BBB so you can complain to them, and be sure to post a bad review on our Facebook page!" What about all those apps that pop up a dialog that says "Do you love our app?" and if you say yes it takes you to the app store, and if you say no it shows an internal complaint dialog?
tomglynch 8y ago
This is so interesting! There are so many apps that request reviews, I'm sure a lot only do it when the user seems happy to be using the app. Could they be fined? I mean - it's good that they have been fined, but I'm concerned about the precedent it sets! Another thought - how did ACCC find out about this? Someone internal reported it to them?
- paulhart 8y ago
  The judgement indicates that the issue here was that Meriton was actively preventing people from being asked for reviews in certain circumstances. Very different from someone being asked for a review and choosing not to give one.
  - tomglynch 8y ago
    What I am talking about is when an App will sometimes have a popup saying "Love this app? leave a review" with a link. Does this fall under the same issue if the app selectively chooses who to display this pop up to?
    - T-Winsnes 8y ago
      My gut feel on this, is that if you use a metric to infer if you will get a positive review and only show the popup in those cases, you might be in conflict of this ruling
      - tomglynch 8y ago
        This is my feeling too - it's crazy how easy it is to break this law. It will also be very difficult to enforce though.
        paranoidrobot 8y ago
        If you have enough annoyed off customers that you're running analytics to determine whether they're likely to leave a negative review, and interfering with their ability to leave that review on a third party site - then perhaps you should focus more on fixing your business instead. If you're asking a customer if they're satisfied with the service/product, and then following that up to try and resolve it - that's not misleading or deceptive, that's normal customer service.
ajdlinux 8y ago
The original judgment can be found at http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2017/1305.html http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2... (this doesn't include today's decision about the penalty)
ggm 8y ago
Meriton is run by Harry Triguboff who is one of a generation of migrant financiers, industrialists and corporate heads who defined postwar Australia. He has a pretty strong involvement in the Australian housing bubble and some people have said online he's propping up the price boom, as Chinese investors duck out of the market. I've also read that he retains substantive control of the apartment complex body corporate, to milk it for post-construction fee income, which can be a long, long tail of money. And, he can stop the BC voting to reduce management fees, or stop it forcing the developer to fix post-construction minor slipups.
- Intermernet 8y ago
  As someone who has a few contacts in the high density housing market in Australia, I can say that I've heard similar rumours regarding Meriton. I've also heard horror stories about their actual construction quality and the expected life span of their apartments etc. Unfortunately, they don't seem to be doing anything illegal, so it's really up to the Australian public to push for stronger regulations regarding these practices, or just not buy into high density housing in most of Australia as it seems there has been a race to the bottom amongst Meriton and it's competitors.
  - sjwright 8y ago
    > Unfortunately, they don't seem to be doing anything illegal Unfortunately? "...but unfortunately the defendant failed to murder my client..."
    - Intermernet 8y ago
      By unfortunate, I mean that what they are doing should be illegal, but isn't. Not really comparable to murder, which has, at least in theory, been illegal since Hammurabi.
  - caf 8y ago
    At least in terms of the body corporate issue, the owners corporation does have a legal duty to act in the interests of all owners.
i386 8y ago
I occasionally wish the ACCC had some more teeth but this is a good result. As a citizen, on the whole, I'm as proud of Australia's strong consumer protection laws as I am of our gun protection laws.
- roganartu 8y ago
  The ACCC and strong consumer protection laws are something I didn't realise I took for granted until I moved to the US recently. I had a pair of pants develop a hole within a few weeks of purchase so I took them back to the store and it was difficult to convince them that pants should last longer than that and get a replacement. This is in contrast to my Fitbit, for example, which I had replaced about three times in two years without question in Australia because of a fault in the band. It's interesting that capitalism comes into it somewhat, insofar as companies like Amazon and REI have consumer-friendly return policies as a sort of competitive advantage. I know I've bought things from REI despite a higher price just because I know I won't have any problems returning it for any reason within 12 months.
  - hmd_imputer 8y ago
    That is interesting. In my case, I have had the best consumer-friendly experience when it comes to returning or replacing items in the US. Returning electronics, clothes etc. to Wallmart, Target, BestBuy was totally hassle-free. When compared to Germany, the overall experience in the US is much better. Although Germans have "stronger" customer rights protection, in reality, you get less customer satisfaction. For example, a few days ago I purchased a pair of sunglasses from TKMaxx in Germany. After wearing it a couple of times, I realized that there are tiny scratches on them. I then took it back for a replacement. I was denied the replacement, because "the item didn't have the original price sticker on it". It was such a ridiculous excuse. I tear the price sticker the moment I buy the stuff. How am I supposed to test it to see if I like it without using it at all? There was another friend of mine who wanted to get a replacement for a malfunctioning smartphone he bought in MediaMarkt. He was also denied the replacement in the first place. After a long "negotiations" he was finally given a new smartphone, which, again, would not happen in the US at all. All in all, I find shopping experience in the US to be way better than in Europe.
zero_intp 8y ago
I used to work for Cogent Communications, this was common practice in customer service. Comstat scores are 100% gamed. The Global Director of customer service has his managers change ticket parameters for two weeks around ticket closure so that only 'happy' customers get review emails.
deleted 8y ago
[deleted]

199 points by markdown 8y ago

$3M seems way excessive for a company that owns 15 properties. However it seems this is a big company: https://en.wikipedia.org/wiki/Meriton https://en.wikipedia.org/wiki/Meriton

markdown 8y ago
> Meriton is Australia's largest apartment developer and also the country's biggest residential home builder founded by Harry Triguboff AO, its managing director, in 1963. Meriton sells apartments and also operates serviced apartments accommodation under its Meriton Suites brand in Sydney, Brisbane and the Gold Coast. > In 2007, it was estimated the company was building about 1,200 apartments each year. By 2010 this figure had increased to 2,000 units. It is estimated that over the past 50 years, Meriton has built more than 65,000 residential apartments on the east coast of Australia. It also offers serviced accommodation in 17 locations. > 2014 was a record year for the apartment developer, with the company’s annual turnover rising more than 50 per cent to $2 billion https://en.wikipedia.org/wiki/Meriton https://en.wikipedia.org/wiki/Meriton
broodbucket 8y ago
from Wikipedia: 2014 was a record year for the apartment developer, with the company’s annual turnover rising more than 50 per cent to $2 billion, bringing it to 11th place in IBISWorld's 2014 Top 500 Companies, up from 29th spot the previous year. The HIA-Colorbond steel Housing 100 named Meriton as Australia’s largest residential home builder, up more than 5000 housing starts, from 2573 in FY2013-14 to 7929. Based on this figure, new homes by Meriton accounted for around 10 per cent of all multi-unit dwellings commenced in Australia, and 29.5 per cent of all multi-unit dwellings commenced in New South Wales. Meriton projects equated to approximately 0.05 per cent of Australia’s GDP. --- ...yeah I think they'll be fine.
ape4 8y ago
About US$2.2M, which is still a lot.
- ShorsHammer 8y ago
  It's absolutely nothing for a company this size.
  - thereiwas 8y ago
    Maybe the precedent was more important?
    - ShorsHammer 8y ago
      I'm guessing that is the case, especially considering it was a precedent, seems to be more about shooting across the bow of large companies engaging in this behaviour and putting them on notice rather than actual punishment.
taspeotis 8y ago
15 properties isn't ... 15 houses ... here's one property https://www.meriton.com.au/wp-content/uploads/Meriton-Southport-8.8.17-Final-1-e1503013598580.jpg https://www.meriton.com.au/wp-content/uploads/Meriton-Southp...
anoplus 8y ago
Just an idea. Why not penalize by percentage? If the goal of penalties is to prevent companies from breaking laws that are equally valid for everyone. Otherwise, companies holding most capital will be practically above the law.
- conquistadog 8y ago
  Right. Given their size, I'm not sure how painful this amount would be to the offender. Too low, and it's just a cost of doing business. A percentage penalty (of nationwide if not worldwide revenue) might prove much more concerning to them, much as we're seeing with general alarm caused by the fear of the GDPR's percentage penalty.
- hayyyyydos 8y ago
  > Why not penalize by percentage? The ACCC usually does do it this way. Some recent examples: https://www.accc.gov.au/media-release/air-nz-penalised-15-million-for-price-fixing https://www.accc.gov.au/media-release/air-nz-penalised-15-mi... - Air NZ penalised $15m https://www.accc.gov.au/media-release/iphone-and-ipad-misrepresentations-cost-apple-inc-9-million-in-penalties https://www.accc.gov.au/media-release/iphone-and-ipad-misrep... - Apple fined $9m https://www.accc.gov.au/media-release/domain-name-corp-and-domain-name-agency-to-pay-195-million-in-penalties https://www.accc.gov.au/media-release/domain-name-corp-and-d... - Domain Name Corp/Agency fined $1.95m You'll see that most of these amounts are pretty close to the amount the companies made from the activities and scale with the size of their operations

RileyJames 8y ago

The precedent this sets is interesting. From my interpretation, a business must request reviews from all customers, via all methods, for each platform, in order to not be considered ‘manipulating consumers’. This will have impacts for all the saas review management products, as their key selling point is usually: get more reviews from your happy customers, or stop your unhappy customers posting reviews. Which is usually done by targeting or omitting either group. Any Australian business using such product would now be on the hook.

tomglynch 8y ago
I think it is just, if you are to request reviews, then you should request reviews equally from all customers.
paxy 8y ago
> From my interpretation, a business must request reviews from all customers, via all methods, for each platform, in order to not be considered ‘manipulating consumers’ There is definitely room for broader enforcement of this judgement, but I don't think your interpretation is correct, especially the "via all methods, for each platform" part. For this specific case, the practice of selectively sending email addresses for 'Review Express' is explicitly considered fraud under TripAdvisor's terms of service (scroll all the way down https://www.tripadvisor.com/TripAdvisorInsights/w789 https://www.tripadvisor.com/TripAdvisorInsights/w789 and https://www.tripadvisorsupport.com/hc/en-us/articles/200615037-What-is-considered-fraud- https://www.tripadvisorsupport.com/hc/en-us/articles/2006150...), so I imagine this made the court's decision easier.
hn_throwaway_99 8y ago
Yeah, I'm hoping there was just some info missing from the article, but this decision seems all sorts of fucked up. All Trip Advisor Review Express really does automate the process of requesting reviews on Trip Advisor. It's not much harder to just email out requests to guests yourself. So is this decision saying if you only emailed requests to people who thought would give you a good review, but not a bad review, that you are guilty of something? If so, literally 99% of businesses would be guilty of this. When someone calls to complain, every business tries to handle it in house. It's not like they say "Oh, I'm sorry you had a bad experience, let me get you the contact info for BBB so you can complain to them, and be sure to post a bad review on our Facebook page!" What about all those apps that pop up a dialog that says "Do you love our app?" and if you say yes it takes you to the app store, and if you say no it shows an internal complaint dialog?

tomglynch 8y ago

This is so interesting! There are so many apps that request reviews, I'm sure a lot only do it when the user seems happy to be using the app. Could they be fined? I mean - it's good that they have been fined, but I'm concerned about the precedent it sets! Another thought - how did ACCC find out about this? Someone internal reported it to them?

paulhart 8y ago
The judgement indicates that the issue here was that Meriton was actively preventing people from being asked for reviews in certain circumstances. Very different from someone being asked for a review and choosing not to give one.
- tomglynch 8y ago
  What I am talking about is when an App will sometimes have a popup saying "Love this app? leave a review" with a link. Does this fall under the same issue if the app selectively chooses who to display this pop up to?
  - T-Winsnes 8y ago
    My gut feel on this, is that if you use a metric to infer if you will get a positive review and only show the popup in those cases, you might be in conflict of this ruling
    - tomglynch 8y ago
      This is my feeling too - it's crazy how easy it is to break this law. It will also be very difficult to enforce though.
      - paranoidrobot 8y ago
        If you have enough annoyed off customers that you're running analytics to determine whether they're likely to leave a negative review, and interfering with their ability to leave that review on a third party site - then perhaps you should focus more on fixing your business instead. If you're asking a customer if they're satisfied with the service/product, and then following that up to try and resolve it - that's not misleading or deceptive, that's normal customer service.

ajdlinux 8y ago

The original judgment can be found at http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2017/1305.html http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCA/2... (this doesn't include today's decision about the penalty)

ggm 8y ago

Meriton is run by Harry Triguboff who is one of a generation of migrant financiers, industrialists and corporate heads who defined postwar Australia. He has a pretty strong involvement in the Australian housing bubble and some people have said online he's propping up the price boom, as Chinese investors duck out of the market. I've also read that he retains substantive control of the apartment complex body corporate, to milk it for post-construction fee income, which can be a long, long tail of money. And, he can stop the BC voting to reduce management fees, or stop it forcing the developer to fix post-construction minor slipups.

Intermernet 8y ago
As someone who has a few contacts in the high density housing market in Australia, I can say that I've heard similar rumours regarding Meriton. I've also heard horror stories about their actual construction quality and the expected life span of their apartments etc. Unfortunately, they don't seem to be doing anything illegal, so it's really up to the Australian public to push for stronger regulations regarding these practices, or just not buy into high density housing in most of Australia as it seems there has been a race to the bottom amongst Meriton and it's competitors.
- sjwright 8y ago
  > Unfortunately, they don't seem to be doing anything illegal Unfortunately? "...but unfortunately the defendant failed to murder my client..."
  - Intermernet 8y ago
    By unfortunate, I mean that what they are doing should be illegal, but isn't. Not really comparable to murder, which has, at least in theory, been illegal since Hammurabi.
- caf 8y ago
  At least in terms of the body corporate issue, the owners corporation does have a legal duty to act in the interests of all owners.

i386 8y ago

I occasionally wish the ACCC had some more teeth but this is a good result. As a citizen, on the whole, I'm as proud of Australia's strong consumer protection laws as I am of our gun protection laws.

roganartu 8y ago
The ACCC and strong consumer protection laws are something I didn't realise I took for granted until I moved to the US recently. I had a pair of pants develop a hole within a few weeks of purchase so I took them back to the store and it was difficult to convince them that pants should last longer than that and get a replacement. This is in contrast to my Fitbit, for example, which I had replaced about three times in two years without question in Australia because of a fault in the band. It's interesting that capitalism comes into it somewhat, insofar as companies like Amazon and REI have consumer-friendly return policies as a sort of competitive advantage. I know I've bought things from REI despite a higher price just because I know I won't have any problems returning it for any reason within 12 months.
- hmd_imputer 8y ago
  That is interesting. In my case, I have had the best consumer-friendly experience when it comes to returning or replacing items in the US. Returning electronics, clothes etc. to Wallmart, Target, BestBuy was totally hassle-free. When compared to Germany, the overall experience in the US is much better. Although Germans have "stronger" customer rights protection, in reality, you get less customer satisfaction. For example, a few days ago I purchased a pair of sunglasses from TKMaxx in Germany. After wearing it a couple of times, I realized that there are tiny scratches on them. I then took it back for a replacement. I was denied the replacement, because "the item didn't have the original price sticker on it". It was such a ridiculous excuse. I tear the price sticker the moment I buy the stuff. How am I supposed to test it to see if I like it without using it at all? There was another friend of mine who wanted to get a replacement for a malfunctioning smartphone he bought in MediaMarkt. He was also denied the replacement in the first place. After a long "negotiations" he was finally given a new smartphone, which, again, would not happen in the US at all. All in all, I find shopping experience in the US to be way better than in Europe.

zero_intp 8y ago

I used to work for Cogent Communications, this was common practice in customer service. Comstat scores are 100% gamed. The Global Director of customer service has his managers change ticket parameters for two weeks around ticket closure so that only 'happy' customers get review emails.

deleted 8y ago

[deleted]