The Legal Minefield of Online Reviews: What Business Owners and Consumers Need to Know
In the digital age, the court of public opinion often begins — and ends — with a Google search. For businesses reliant on online visibility, a single scathing review can do more than just bruise egos; it can batter reputations and bottom lines.
The ease of leaving anonymous criticism online has made platforms like Google Reviews both a marketing tool and a legal minefield. Increasingly, Australian businesses are turning to the courts to unmask faceless detractors and remove defamatory content, citing severe reputational and financial harm.
Yet, businesses aren’t always the victims. Regulatory bodies have cracked down hard on companies that manipulate reviews, warning that misleading consumers is a serious breach of Australian Consumer Law.
This blog unpacks the legal risks for both sides of the review divide — the reviewer and the reviewed.
When a One-Star Review Becomes a Court Case
Defamation law is increasingly being tested in the context of online reviews, with some defamation cases proceeding all the way to judgements against those leaving negative google reviews.
In Musicki v de Tonnerre [2023] FCA 222, Melbourne-based vascular surgeon Dr Korana Musicki pursued legal action after an anonymous Google reviewer named “Dave Cross” left a damaging critique of her services. The Federal Court ordered Google to disclose the reviewer’s identity — which turned out to be a former student of Dr Musicki, Erik de Tonnerre.
Despite the review being removed after a concerns notice was issued, Dr Musicki successfully sued for defamation and was awarded damages for harm to her professional reputation in a default judgement with the Court determining she was entitled to damages for hurt feelings, for damage to her reputation and to vindicate her reputation.
A more egregious example can be found in Cheng v Lok [2020] SASC 14, where Adelaide lawyer Gordon Cheng became the target of multiple defamatory Google reviews by a person he had never met. The reviews accused him of dishonesty and incompetence. The Court found that the reviewer, Isabel Lok, had acted without good faith, awarding Cheng $750,000 in damages and costs. The award included $100,000 for aggravated damages. Lok had never met or had any dealings, personal or business, with Cheng. Her response to the concerns notice was to change the name on the review. After the review was deleted, she posted a further defamatory review. She evaded service which increased the cost and time required to bring the matter to a hearing. She never apologised or made any offer of compensation. The judge had no doubt that as a result of her actions (or inaction) she increased the harm to Cheng.
Can All Businesses Sue for Defamation? Not Quite
It’s important to note that not all businesses are entitled to bring defamation proceedings in Australia. Under section 9(2) of the Defamation Act 2005 (NSW) — mirrored in most other states and territories — a corporation cannot sue for defamation unless it is:
- A non-profit organisation, or
- A small business that employs fewer than 10 people and is not related to another corporation.
This means that medium to large companies, even if seriously harmed by false statements, cannot sue for defamation. These businesses may instead need to consider claims under the Australian Consumer Law for misleading or deceptive conduct, or seek injunctive relief for reputational harm.
For small business owners, however, defamation remains a powerful tool — particularly when anonymous reviews threaten their livelihood.
When Individuals Can Sue — Even If the Review Targets a Business
Crucially, individuals associated with a business — including directors, employees, sole traders, or contractors — can sue for defamation in their personal capacity, even when the review appears to be directed at the business itself. This is especially relevant in professions where the individual is closely tied to the business’s public image, such as doctors, lawyers, consultants, or tradespeople.
What matters is whether the defamatory content can reasonably be understood to refer to the individual, either directly or by implication. If a review criticises a business in a way that clearly targets a specific person — for example, “the doctor was negligent” or “the owner lied” — then that individual may have standing to sue.
This principle was central in Musicki v de Tonnerre, where the review appeared on the Google listing for Dr Musicki’s practice. Although the business itself could not bring a defamation claim, the court found that the review was clearly about her, enabling her to sue in her personal capacity.
In short, even if the business is too large to sue for defamation, its public-facing representatives may still have recourse if they are personally defamed.
The Serious Harm Threshold
Reforms to defamation law in New South Wales, Victoria, South Australia and Queensland in July 2021 introduced a new hurdle: plaintiffs must now prove “serious harm” to reputation.
In Scott v Bodley (No 2) [2022] NSWDC 651, the plaintiff failed to satisfy this requirement. Despite alleging damage from a one-star review posted for 14 days, the court found no proof the review was widely seen or shared. The case was dismissed, and the plaintiff was later ordered to cover a significant portion of the defendant’s legal costs.
However, this threshold doesn’t apply everywhere. Western Australia, for instance, has yet to adopt the reform. There, businesses and individuals can still bring defamation claims without needing to show serious reputational or economic damage — at least for now.
The Flip Side: When Businesses Cross the Line
While consumers face legal risks when reviews are false or malicious, companies manipulating their own reviews also face serious penalties.
In ACCC v Meriton Property Services Pty Ltd [2017] FCA 1305, serviced apartment giant Meriton was found guilty of misleading conduct. The company had masked or withheld guests’ email addresses from TripAdvisor to suppress negative feedback. The Federal Court fined Meriton $3 million for its attempt to artificially boost its online ratings.
In another case, ACCC v Service Seeking Pty Ltd [2020] FCA 1040, the online platform was penalised $600,000 after it was revealed that 17,000 customer reviews were actually generated by businesses themselves using a feature that allowed them to write their own glowing feedback — published automatically unless the customer objected within three days.
In both cases, the courts found that such conduct misled the public and breached sections of the Australian Consumer Law prohibiting false or deceptive practices.
Regulators Watching Closely
The ACCC and ASIC expect businesses to uphold transparency and integrity in how they manage online reviews. This includes removing fake feedback, not selectively deleting negative reviews, and never presenting business-written reviews as genuine customer feedback.
Under the Competition and Consumer Act 2010 (Cth), failure to comply can result in severe penalties, reputational damage, and regulatory enforcement.
Takeaway for Businesses and Consumers
Online reviews are not a free-for-all. For consumers, the message is clear: if you post defamatory or dishonest content, you may end up in court. For businesses, the imperative is twofold — protect your reputation, but do so lawfully. Attempts to silence critics through underhanded means can be just as damaging as the criticism itself.
Crucially, not every business has standing to bring a defamation claim. For companies with more than 10 employees, the law offers fewer options under defamation — making it all the more vital to understand and explore alternative remedies. But individuals associated with the business, if personally defamed, can take legal action to protect their reputations.
In an era where a single review can make or break a business, both sides must tread carefully. Fairness, honesty, and legal compliance aren’t just best practices — they’re legal necessities.
If your business is facing defamatory online reviews or you’re unsure how to lawfully manage review content, legal advice should be sought early.
