Court’s $2.9 million penalty against HealthEngine delivers clear guidance to businesses about customer reviews and the use of customer information
What has happened?
The Australian Competition and Consumer Commission (ACCC) has succeeded in its case against HealthEngine Pty Ltd. HealthEngine hosts an online directory listing 70,000 health practices and practitioners across Australia and facilitates patient bookings.
HealthEngine admitted that it engaged in false, misleading and deceptive conduct by publishing selective patient reviews and ratings and sharing patients’ personal information with private health insurance brokers without appropriate disclosures.
HealthEngine consented to orders requiring it to pay a penalty of $2.9 million.
There are two key takeaways from this case.
- While online customer reviews can be an effective marketing tool, businesses that selectively remove, suppress or edit reviews or ratings risk breaching the Australian Consumer Law. If businesses choose to collect and publish customer reviews or ratings, then they must be prepared to take the bad with the good. The decision also highlights the ACCC’s ongoing enforcement focus on online reviews, with this case following other recent enforcement proceedings concerning the veracity and independence of online reviews and ratings against Service Seeking, Trivago and Meriton.
- Businesses that collect personal information from customers must make appropriate disclosures about how they intend to use that data, particularly if they propose to disclose the information to a third party. A failure to make adequate disclosures risks breaching the Australian Consumer Law. The ACCC is currently focused on a range of consumer data privacy issues.
The ACCC began investigating HealthEngine in July 2018 and commenced proceedings in August 2019. The case concerns three types of conduct.
1. Patient Reviews
Until June 2018, HealthEngine published patient reviews about the quality and services of health practices and practitioners listed on its online directory. The reviews were based on responses to surveys which HealthEngine sent to all patients who attended a consultation with a health practice booked through HealthEngine’s online platform.
The ACCC alleged that HealthEngine had engaged in misleading and deceptive conduct by manipulating the patient reviews it published.
HealthEngine admitted that, between 31 March 2015 and 1 March 2018, it did not publish around 17,000 negative reviews. For example, HealthEngine chose not to publish the following negative reviews:
|We were treated badly |
Made to feel unwanted
|Accessibility! A family clinic with stairs to the entrance, |
parents with prams face a mighty struggle
|- waiting room over crowded |
- practice was over booked
- not enough seats
| This practice frequently cancels appointments with |
HealthEngine also admitted that it edited around 3,000 reviews to remove negative aspects or to embellish the reviews before publishing them. Some examples of the reviews that HealthEngine edited prior to publication are set out below:
|Example||Original Feedback||Edited feedback|
|1||Both times I have attended the practice the gp has been running over 40 minutes late. I appreciate that the gp is thorough and takes their time with each patient however, maybe longer bookings should be made so patients are not waiting for so long. 45 mins is too long to wait with a toddler when you are feeling sick. However, overall I was happy with the service provided.||Overall I was happy with the service provided.|
|2||The doctors are very good. However the delay at times is not satisfactory. Last visit I waiting 2.5hrs!||The doctors are very good.|
|3||The practice is good just disappointed with health engine. I will call the clinic next time instead of booking online.||The practice is good.|
|4||I love the practice and have never had a bad experience with any of the doctors but this one made me rip the Fixomull Stretch bandage off my own infected sore, told me to go home and wash it and bandage it again with something different. She was very uncaring. It wasn't hurting much before that but it is now!||I love the practice and have never had a bad experience with any of the doctors.|
HealthEngine admitted that, by its conduct, it had falsely represented that:
- the patient reviews it published on its platform were an accurate reflection of the reviews it received; and
- the reviews it had edited were patient testimonials about the services provided by the listed health practices.
2. Ratings for health practices
HealthEngine publishes ratings of the health practices and practitioners listed on its directory. HealthEngine bases these ratings on responses to a question in the patient surveys it circulates, namely "Would you recommend others to this practice?" Yes?/No? Up until June 2018, HealthEngine published ratings as follows:
- For practices that received a ‘yes’ from more than 80% of respondents, HealthEngine published a rating either as a percentage or star rating.
- For practices that received a ‘yes’ from less than 80% of patients, HealthEngine chose not to publish a rating for that practice and instead stated that: “There is currently insufficient data to calculate a patient satisfaction level” or “This practice does not have a customer satisfaction score”.
HealthEngine admitted that by this conduct it had misrepresented the reasons it did not publish a rating for some practices. HealthEngine did have sufficient feedback to publish a practice rating but chose not to.
3. Provision of customers' personal information to third parties without adequate disclosures
HealthEngine asked patients during the online booking process whether, in effect, they wished to receive a call about health insurance comparison services, or assistance to assess their private health insurance needs. If the patient answered 'yes' and booked an appointment on HealthEngine’s online booking system, then HealthEngine provided their personal information to a third party insurance broker in exchange for payment of a fee.
Over a four year period, HealthEngine gave the personal information of over 135,000 patients who booked appointments through its online booking platform to third party private health insurance brokers. This personal information included some or all of the following: the patient’s name, date of birth, phone number, email address, whether the patient had private health insurance and the appointment type and practice with whom they booked through HealthEngine. HealthEngine earned more than $1.8 million from this arrangement with the third party private health insurance brokers.
HealthEngine admitted that its conduct was likely to cause patients to believe that HealthEngine would provide the comparison or assistance service, rather than a third party. It also admitted that it did not adequately disclose that the patients’ personal information would be sent to a third party insurance broker, or that HealthEngine would receive a payment for this.
The Federal Court's decision
The Federal Court found each of the three types of conduct engaged in by HealthEngine were in breach of the Australian Consumer Law.
The Federal Court ordered HealthEngine to pay a penalty of $2.9 million and to pay the ACCC’s costs in the sum of $50,000. The court took into account HealthEngine’s cooperation with the ACCC and its admissions about contravening the Australian Consumer Law in determining the appropriate penalty.
HealthEngine was also ordered to:
- Contact patients whose personal information was provided to third party insurance brokers informing them of certain matters, including how the patient can request his or her personal information be deleted; and
- Engage in an independent annual review of its existing compliance program for a period of 3 years and to implement any changes identified as necessary by an independent reviewer.
Understanding competition and consumer rules is a necessary and prudent part of any successful business strategy in today’s global economy. These laws govern a broad range of business conduct and many are complex. DLA Piper’s Competition, Consumer & Regulatory team help clients stay ahead of the pack by managing regulatory obligations and issues in a practical way. Please let us know if we can assist you.