The Australian Competition and Consumer Commission (ACCC) is ramping up its efforts to tackle misleading online reviews and influencer endorsements after finding more than eight-in-10 social media influencers are posting reviews that potentially breach Australian Consumer Law.

The regulatory body has recently released two reports outlining the findings of its internet sweeps of social media influencers and online reviews, indicating a significant concern over potentially misleading advertising.

The ACCC reviewed 118 social media influencers across seven sectors, finding 81% were making posts that raised concerns under the Australian Consumer Law for potentially misleading advertising.

The most common issue identified was influencers not disclosing brand relationships in their posts. The sweep reviewed influencers across seven sectors, with most influencers in each sector making concerning posts. This ranged from 96 per cent of fashion influencers reviewed making concerning posts to 73 per cent of gaming and technology influencer posts raising concern.

The review stretched across Instagram, TikTok, Snapchat, YouTube, Facebook, and livestreaming service, Twitch. These influencers were tipped off to the ACCC from consumers and boasted of both large and smaller followings.

"Many of the influencers we reviewed did not make adequate disclosures in their posts where it appeared they were receiving payment, gifts or other incentives to promote brands, products or services," ACCC Acting Chair, Catriona Lowe, stated.

Another common issue was influencers using vague or confusing language to disclose advertising, such as 'sp' and 'spon' instead of 'sponsored'.

"We found that many influencers were formatting their posts to hide their advertising disclosure or make it difficult for consumers to notice it," she said.

The next steps in the ACCC's continuing scrutiny of these parts of the online economy include developing strong guidelines for online operators so they clearly know what we expect, before a renewed focus on enforcement, Lowe said.

"Influencers and businesses need to review their practices and improve compliance with the Australian Consumer Law to ensure consumers can trust the information they find online," she said.

In a separate internet sweep to identify fake or misleading online reviews, the ACCC found 37% of the 137 businesses reviewed had engaged in concerning conduct. The sectors with the highest proportions of potentially fake or misleading online reviews were household appliances and electronics, beauty products, and home improvement and household products and services.

The ACCC also reviewed 24 businesses that offer services to create fake reviews, remove negative reviews and prevent or edit negative reviews.

"Our sweep indicates that some businesses are manipulating online reviews to present a more favourable impression of their business to consumers," Lowe noted.

The sectors with the highest proportions of potentially fake or misleading online reviews were household appliances and electronics, beauty products, and home improvement and household products and services. Those with the lowest proportion of potentially fake or misleading online reviews were health products, and food and restaurants.

In addition, the ACCC noted use of third-party professional reviews and review removalists as tools being used by companies to potentially manipulate online reviews. This found some are encouraging businesses to choose which reviews to display publicly. Yet most businesses and third-party review platforms were not disclosing whether reviews were incentivised and did not require reviewers to disclose whether they had received a benefit or incentive for submitting a review.

"Businesses that seek to create fake reviews or edit or remove genuine negative reviews, with the intention of inflating their own ratings, lowering their competitors' ratings, or hiding genuine negative reviews from the public, are in breach of the Australian Consumer Law," Lowe warned.

The ACCC will release guidance in early 2024 for influencers and businesses to remind them of their obligations under the Australian Consumer Law to disclose advertising in social media posts. The ACCC said it will also continue to monitor businesses offering services to facilitate the manipulation of consumer reviews and develop educational material for consumers to help them identify potentially fake or misleading online reviews.

The findings of the ACCC's online reviews sweep will inform its education, compliance and enforcement activities with businesses, including producing updated guidance material for businesses and review platforms.