Complaints of Meriton about Tripadvisor - Assignment Example

Media report: Meriton faces legal action over claims of 'masking' TripAdvisor complaints Name: Class: Unit: Introduction Article details The article “Meriton faces legal action over claims of 'masking' TripAdvisor complaints” (http://www.abc.net.au/news/2016-11-24/meriton-faces-legal-action-over-masking-tripadvisor-claims/8053954), appeared on ABC.net and was written by David Lewis. The article was written in 25 Nov 2016 based on a revelation by the newspaper investigation and a subsequent action by the Australian Competition and Consumer Commission (ACCC) to launch legal proceedings in a federal court. Meriton is Australia largest apartment developer and has been accused of unethical conduct. The legal issues involved a long investigation that started in 2015 through ABC efforts (Lewis, 2016b). The choice of the article is based on portrayal of legal and ethical issues of consumer protection and rights. Masking of negative reviews is an unfair trade practice which gives the customers at Meriton a raw deal. Good business practices are supposed to place the customers as an important stakeholder hence openness is vital (Carter & Sheldon, 2008). The article also looks at transparency as a form of consumer protection and the associated legal issues. Research shows that transparency and disclosure are required for successful business operations. It also helps in creating a fair business environment. It is an article that claims deliberate actions with an aim of reducing the negative reviews was carried out by the business. The article also portrays how a company may use its influence to hide vital information required by the public in making choices. This is a misleading and deceptive conduct which denies consumers their right to express opinions (Lewis, 2016b). Article summary Meriton is the largest residential apartment developer in Australia. Based on the article, the business has been preventing guests from lodging negative claims on TripAdvisor which is an influential travel website. The article claims that last year it was revealed that Harry Triguboff's Meriton Serviced Apartments were masking negative complaints against them on TripAdvisor. The tactic used by the business ensured that no negative feedback reported by the guests was reflected on trip advisor. This made it possible for the business to hide complaints on poor services which included lack of hot water and malfunctioning lifts. Based on yearlong investigations, Australian Competition and Consumer Commission (ACCC) were able to launch legal proceedings in Australian federal court. The business was accused of misleading and deceptive conduct which was aimed at minimising the negative reviews. There were also cases where the staffs were bribing the guests to ensure that they remove negative reviews on the website. This is a legal issue that could lead to a penalty of up to $1.1 million (Lewis, 2016b). Legal analysis Legal issues in the article The legal issues identified in the article are misleading and deceptive conducts. This is through masking negative reviews on TripAdvisor through adding the letters “MSA” to the complainant email leading to bouncing feedbacks. The business has also been accused of trying to bribe the complainants with an aim of removal of negative reviews from online platform (Lewis, 2016b). This points out to manipulation of reviews and offering illegal incentives for reviews. Law and legal institutions relevant to the legal issues In Australia, the Australian Competition and Consumer Commission (ACCC) is the body which has a legal authority to implement and administer the Competition and Consumer Act 2010 (CCA) which also incorporates the Australian Consumer Law (ACCC, 2017). The body works in collaboration with the country judicial system to ensure that the industry players are open and transparent to their consumers. This makes it possible to protect the consumer rights of free speech and ensure that their reviews are respected. According to ACCC and Australian Consumer Law, misleading and deceptive conducts through reviews are against the law and punishable (ACCC, 2014). The institution is against offering incentives for review which is against the law. According to law, manipulating the reviews and offering incentives for reviews can lead to a penalty (ACCC, 2017). Explanation of legal issues With the business preventing the guests from lodging negative reviews on TripAdvisor, they committed a crime. Masking a review denies the customer their freedom of speech. In this case, the business masked the negative reviews through addition of letters “MSA” to the email. This made it possible for the business to avoid having some of the negative reviews. Another business conduct that raises legal issue is trying to bribe their guests to remove negative reviews from the website. Customers who had already lodged negative reviews were offered incentives (Lewis, 2016b). This indicates fraud which comprises the firm integrity and presents misleading and deceptive conduct. Review platforms offers consumers’ vital information which is required in making informed buyer decisions (Duan, Gu and Whinston, 2008). While it is lawful to remove fake and misleading consumer reviews from the platforms, it is unlawful to remove genuine reviews. Removal of genuine consumer review is a breach of CCA (ACCC, 2014). The platforms have mechanisms and processes which help in identifying fake and misleading reviews which should be followed. The act by Meriton was against business integrity through removal of genuine reviews. The negative reviews were removed leading to misleading information in the review platform. The consumers were denied their right of free speech which is against Australian consumer laws. Another potentially unlawful act is use of incentives to bribe the consumers into removing negative reviews (Carter & Sheldon, 2008). Incentives are only lawful if there is full disclosure on the business page. This was not available in the case of Meriton since the incentives were meant to be bribes for positive ratings. Meriton conduct created misleading reviews through purposefully omitting negative reviews which posed a commercial risk to the business (Lewis, 2016b). This conduct made it hard for the consumers to make informed decisions since they were presented with modified reviews which are unlawful. Meriton engaged in this conduct with an aim of influencing their business finances in a positive manner. The business wanted to eliminate negative feedbacks from the disgruntled customers so that Meriton would not suffer associated loss of business. While the business was understandably concerned with the reputational consequences, the actions were wrong (Duan, Gu and Whinston, 2008). Based on ACCC website, the acts committed by the business could lead to a $1.1 million fine and the business can lose their website ratings (ACCC, 2014). Analysis of legal issues Consumer rights to post reviews are protected by the law. In Australia and most of the western countries, consumers have rights to express their views. Masking the reviews goes against the consumer rights and the need for having critical feedback (ACCC, 2014). Consumers have rights to express and share their honest experiences about a product or service without fear. According to ACCC, fake reviews are against the Australian consumer law and can lead to penalties. Thus, a failure to comply with credible online reviews can be charged in a court of law. ACCC guidelines states that the business should be transparent on their commercial relationships avoid publishing misleading reviews and should never omit negative reviews. In fact, omitting negative reviews is similar to posting fake reviews since they both mislead the consumers looking for information (Duan, Gu and Whinston, 2008). In Australia, the consumer Act 2010 is breached when a business posts fake reviews or deletes negative reviews. In 2011, ACCC took a legal action against Citymove who were fined $66,000 for offering misleading online reviews. It is in the mandate of the ACCC and federal courts to protect consumers from fake and misleading online reviews (Lewis, 2016b). Ethical analysis Ethical theory analysis Ethical discipline principal approaches are utilitarian ethics, deontological ethics, and virtue ethics. Through utilitarian approach, it is important to look at how the business actions affect others. This can be applied Meriton decision making through ensuring that they did not modify their consumers’ reviews. Instead, the business should have made a decision to act on the complaints to ensure they have a happiness impact based on utilitarian approach. In this case, the organisation would have been more concerned with the consequences of their actions. Through utilitarian approach, the decision would have been made for the “greatest good for the greatest number of people”. Through deontological ethics, everyone has an ethical duty (Grace and Cohen, 1998). The business would have been able to make decisions which were aimed at taking responsibilities for everyone. In this case, the people would have been respected and allowed to make their reviews. Using the virtue ethics implies that an act can be judged on morality whether right or wrong according to conformity with certain traits or virtues. In this case, the business act was wrong since it failed to conform to the desirable trait and led to anger instead of happiness. Through virtue ethics, the business actions would have been more focused on the individual and bringing good. Through right based approach, it becomes possible to base ethical obligation to rights. The right based approaches are deontological in nature and related to Kant and Ross view. The main aim is to do what is right and good. In this case, the business would have made their decisions based on consumer rights. They would have been able to respect the opinions of the disgruntled consumers who had a right to express themselves through review websites (Grace and Cohen, 1998). The most applicable approach is right based ethics. This is due to fact that consumers would have been given a platform to express themselves. It would have been possible to ensure that everyone one is catered for and organisation has a duty to their consumers. Consumers have a legal entitlement to rights which the business would have protected. Stakeholder analysis Stakeholders’ theory is based on the relationship between an organisation, its internal and external environment (Crane & Matten, 2007). In this case, the business stakeholders are employees, customers, government, the community, rights groups, consumer protection agencies and the shareholders. The manner in which a business manages stakeholders’ relations determines its success. With the business facing legal issues, the stakeholders are going to be affected in different ways. First, the consumers who have been using Meriton real estate services will lose confidence and trust in the business. In this case, it is highly likely that some may start moving to the competitors. They will feel that their interests are not taken care of and their concerns are being ignored. The media report will also have an impact on the employees who may be sacked or implicated in the case. When faced with legal issues which involve employees, it is likely that some will be implicated in court. The government who are the stakeholders will be more vigilant on review platforms to ensure consumer rights are protected. In addition, it is likely that more charges can be pressed by government bodies due to bribery. Unethical business is shunned by the community and this might have a bad impact on business reputation (Crane & Matten, 2007). The right groups and consumer protection agencies have a role to ensure consumers’ rights are upheld. With the media report on unethical conduct by the business, the right groups and consumer protection agencies have already launched a legal case. The shareholders will feel the impact of the media report on legal issues through reduction in profits. In addition, the business may lose some of their customers leading to low profits and dividends for the shareholders. As business makes their decisions, they have to consider the stakeholders. This is due to fact that every stakeholder is important to business and plays an important role in its success. The business cannot sacrifice one stakeholder over another in making their decisions. When making a decision on business strategy, all stakeholders must be taken into consideration. In this case, the business made a decision to manipulate reviews by eliminating the negative ones. They also made a decision to provide incentives in exchange for positive reviews without fully consulting the stakeholders on what they would like. This is a move that would only benefit the shareholders ignoring the customers and consumer right groups among others. The outcome was a legal issue and ethical since some of the stakeholders were not satisfied (Crane & Matten, 2007). Each stakeholder plays a vital role in the organisation and ignoring them may lead to serious legal and ethical challenges. References ACCC. (2014) Legislation. Available at: https://www.accc.gov.au/about-us/australian- competition-consumer-commission/legislation (Accessed: 13 January 2017). ACCC. (2017) Australian competition and consumer commission. Available at: https://www.accc.gov.au/ (Accessed: 13 January 2017). Carter, C. L., & Sheldon, J. A. (2008) Unfair and deceptive acts and practices. Natl Consumer Law Center. Crane, A., & Matten, D. (2007) Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, USA. Duan, W., Gu, B. and Whinston, A.B. (2008) ‘Do online reviews matter? — an empirical investigation of panel data’, Decision Support Systems, 45(4), pp. 1007–1016. doi: 10.1016/j.dss.2008.04.001. Grace, D. and Cohen, S. (1998) Business ethics: Australian problems and cases. Melbourne: OUP Australia and New Zealand. Lewis, D. (2016b) Meriton faces legal action over claims of ‘masking’ TripAdvisor complaints. Available at: http://www.abc.net.au/news/2016-11-24/meriton-faces- legal-action-over-masking-tripadvisor-claims/8053954 (Accessed: 13 January 2017). Read More

This is a legal issue that could lead to a penalty of up to $1.1 million (Lewis, 2016b). Legal analysis Legal issues in the article The legal issues identified in the article are misleading and deceptive conducts. This is through masking negative reviews on TripAdvisor through adding the letters “MSA” to the complainant email leading to bouncing feedbacks. The business has also been accused of trying to bribe the complainants with an aim of removal of negative reviews from online platform (Lewis, 2016b).

This points out to manipulation of reviews and offering illegal incentives for reviews. Law and legal institutions relevant to the legal issues In Australia, the Australian Competition and Consumer Commission (ACCC) is the body which has a legal authority to implement and administer the Competition and Consumer Act 2010 (CCA) which also incorporates the Australian Consumer Law (ACCC, 2017). The body works in collaboration with the country judicial system to ensure that the industry players are open and transparent to their consumers.

This makes it possible to protect the consumer rights of free speech and ensure that their reviews are respected. According to ACCC and Australian Consumer Law, misleading and deceptive conducts through reviews are against the law and punishable (ACCC, 2014). The institution is against offering incentives for review which is against the law. According to law, manipulating the reviews and offering incentives for reviews can lead to a penalty (ACCC, 2017). Explanation of legal issues With the business preventing the guests from lodging negative reviews on TripAdvisor, they committed a crime.

Masking a review denies the customer their freedom of speech. In this case, the business masked the negative reviews through addition of letters “MSA” to the email. This made it possible for the business to avoid having some of the negative reviews. Another business conduct that raises legal issue is trying to bribe their guests to remove negative reviews from the website. Customers who had already lodged negative reviews were offered incentives (Lewis, 2016b). This indicates fraud which comprises the firm integrity and presents misleading and deceptive conduct.

Review platforms offers consumers’ vital information which is required in making informed buyer decisions (Duan, Gu and Whinston, 2008). While it is lawful to remove fake and misleading consumer reviews from the platforms, it is unlawful to remove genuine reviews. Removal of genuine consumer review is a breach of CCA (ACCC, 2014). The platforms have mechanisms and processes which help in identifying fake and misleading reviews which should be followed. The act by Meriton was against business integrity through removal of genuine reviews.

The negative reviews were removed leading to misleading information in the review platform. The consumers were denied their right of free speech which is against Australian consumer laws. Another potentially unlawful act is use of incentives to bribe the consumers into removing negative reviews (Carter & Sheldon, 2008). Incentives are only lawful if there is full disclosure on the business page. This was not available in the case of Meriton since the incentives were meant to be bribes for positive ratings.

Meriton conduct created misleading reviews through purposefully omitting negative reviews which posed a commercial risk to the business (Lewis, 2016b). This conduct made it hard for the consumers to make informed decisions since they were presented with modified reviews which are unlawful. Meriton engaged in this conduct with an aim of influencing their business finances in a positive manner. The business wanted to eliminate negative feedbacks from the disgruntled customers so that Meriton would not suffer associated loss of business.

While the business was understandably concerned with the reputational consequences, the actions were wrong (Duan, Gu and Whinston, 2008). Based on ACCC website, the acts committed by the business could lead to a $1.

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