Can A Company Sue Over A Bad Review In Australia?

Online reviews can make or break a small business. A thoughtful, critical review can be helpful feedback. A false, damaging post can hurt bookings overnight.

So it’s natural to ask: can your company sue someone for a bad review in Australia? The short answer is sometimes - but it depends on who you are, what the review says, and how it’s published.

In this guide, we’ll walk through when legal action is available, what to weigh up before you go down that path, and smart steps to manage reviews and protect your brand without escalating risk.

Can A Company Sue Over A Bad Review In Australia?

Under Australia’s uniform Defamation Acts, corporations generally can’t sue for defamation - unless they are an “excluded corporation.”

An excluded corporation is typically a for‑profit business with fewer than 10 employees that is not related to another corporation. Not‑for‑profits can also bring defamation claims. Most larger companies can’t sue for defamation but may have other avenues, like injurious falsehood (which is harder to prove and usually requires proof of actual financial loss and malice).

There’s also a “serious harm” threshold introduced in 2021. Individuals must show the publication has caused, or is likely to cause, serious harm to their reputation. Excluded corporations must show serious financial loss. If all you have is a one‑star rating with no words and little reach, it may not clear that bar.

Importantly, individuals in your business - like owners, directors or staff personally named or clearly identifiable in the review - can sue in defamation if the publication harms their personal reputation.

Even if you can sue, the key question is whether you should. Litigation is costly, public and unpredictable. Often, there are faster, lower‑risk options to get clearly false or fake reviews dealt with by the platform first. If you’re dealing with obvious spam or competitor reviews, start with platform tools and processes designed for fake Google reviews and other review sites.

What Counts As Defamation (Versus A Legitimate Opinion)?

Not every negative review is defamatory. A review crosses the line when it communicates a false statement of fact that harms someone’s reputation.

• Statements of fact: Allegations like “they committed fraud,” “the food poisoned me,” or “they sell counterfeit goods” are statements of fact. If false, they may be defamatory.
• Honest opinion: Saying “I didn’t like the service” or “in my opinion the product felt cheap” is usually protected as opinion, especially if based on proper material and recognisable as comment rather than fact.
• Context and truth matter: Truth is a complete defence. If the complaint is substantially true, a court won’t award damages even if the words sting.
• Public interest and privilege: There are defences for publication in the public interest and for certain contexts (like fair reporting). These can complicate litigation risks.

It’s also worth thinking about the Australian Consumer Law (ACL) angle. Reviews and testimonials that are misleading can cause problems for both the reviewer and the business if there’s collusion. The ACL prohibits misleading or deceptive conduct, which can include fake endorsements or suppressing genuine negatives. For context on how courts assess these issues, see the core section 18 misleading or deceptive conduct rules and the elements often considered by courts.

Before You Sue: What To Weigh Up Strategically

Litigation may feel satisfying, but it’s rarely the first or best move for a small business. Consider these factors before escalating:

• Proof and evidence: Can you clearly prove the review is false, identify the publisher and show serious harm (or serious financial loss for a small company claim)? Preserve screenshots, timestamps and any communications.
• Platform remedies: Many platforms remove content that breaches policies (hate speech, harassment, irrelevant or fake content). Reporting tools are often faster and less risky than court.
• Cost and publicity: Lawsuits can attract unwanted attention (the “Streisand effect”). Even a win can feel like a loss if the dispute becomes the story.
• Defamation pre‑steps: Before suing, the law expects a formal “concerns notice” and gives the publisher a chance to make amends. This process can resolve disputes early if it’s handled well.
• Alternatives: A carefully worded response, direct outreach, or a targeted letter can fix many issues. A well‑structured cease and desist letter may be appropriate for clear, harmful falsehoods.

If the review is obviously fake (e.g. from someone who was never a customer) or part of a pattern of malicious reviews from a competitor, act quickly within the platform’s rules for handling Google review disputes. Document each step.

A Step‑By‑Step Playbook For Responding To A Harmful Review

1) Triage The Risk

Assess the content and impact. Is it opinion or an allegation of fact? Has it started to spread? Are you seeing lost bookings linked to the post?

2) Preserve Evidence

Take dated screenshots, copy the URL, note the profile name and any edits. If there’s a pattern, create a simple log.

3) Investigate Internally

Check your records. If they’re a customer, pull the job history, messages and CCTV or call logs if relevant and lawfully obtained. If they’re not a customer, that’s highly relevant to platform reporting.

4) Choose The Right First Response

For opinion or mixed feedback, respond calmly and professionally. Thank them, acknowledge the experience and move the conversation offline with a direct contact. This shows other readers you’re proactive.

For clear falsehoods or abusive content, avoid arguing publicly. Report the post using the platform’s policy categories and consider a short, factual public note (if needed) that you’re reviewing the matter and have reached out to the poster.

5) Use Platform Tools

Lodge a removal request citing the relevant policy (e.g. false content, conflicts of interest, not a real customer). Attach your evidence. Persist politely - escalation paths often exist if the first report is rejected.

6) Send A Concerns Notice (If Appropriate)

If the post makes false, harmful allegations, consider sending a concerns notice that identifies the specific statements, why they’re defamatory and the harm caused, and what you want (removal, apology, correction). This can trigger the statutory “offer to make amends” process and resolve matters quickly.

7) Decide On Next Steps With Legal Advice

If the matter isn’t resolved, get tailored advice on your prospects, costs, and alternatives such as injurious falsehood or identifying anonymous posters via court processes. At this point, a carefully calibrated letter or negotiated outcome often beats a public court battle.

Don’t Create Your Own ACL Risks While Managing Reviews

When you’re protecting your reputation, be careful not to breach the ACL or privacy rules yourself. Common traps include:

• No “gag clauses”: Don’t include contract terms that ban customers from posting honest reviews. Those can be unfair or unenforceable, and may draw regulator attention.
• No fake or cherry‑picked testimonials: Don’t post or pay for fake positive reviews, or selectively delete negatives to mislead. That can be misleading conduct under the ACL.
• Incentivised reviews: If you offer discounts or freebies for reviews, ensure the incentive is clearly disclosed so readers aren’t misled. Keep it neutral (not just for positives).
• Respect privacy and spam laws: If you request reviews by email or SMS, comply with consent and opt‑out requirements and have a clear, accessible Privacy Policy on your site. Check your approach against Australia’s email marketing laws.

If you suspect competitor interference or coordinated attacks, gather evidence methodically and consider escalating to the platform and, if needed, to legal options - especially where posts are clearly fake or malicious. A strategic approach will often resolve the issue faster than a head‑on fight.

When Is Suing (Or Threatening To Sue) The Right Move?

In some cases, legal action is justified. Examples include:

• False allegations of crimes, fraud or severe health/safety breaches that are demonstrably untrue.
• Competitor‑led review bombing or fake profiles posing as customers.
• Posts that include private, identifying information or unlawful harassment alongside false claims.

Even then, consider the pre‑action steps. A well‑drafted concerns notice or a formal letter can secure removal and an apology quickly. Keep your goal in sight: stop the harm and restore trust. If you litigate, expect a longer timeline and public scrutiny.

Also remember that businesses must avoid misleading conduct when presenting testimonials, summaries or star ratings on their own channels. If you curate or republish reviews, ensure they don’t create a false overall impression under the ACL’s general prohibition on misleading conduct, reflected in the section 18 framework and how courts assess the elements of misleading or deceptive conduct.

Build A Proactive Reviews Strategy (So You Rarely Need Lawyers)

Have A Clear Internal Policy

Create a short, plain‑English process for staff: how to triage reviews, who responds, timing, tone, when to escalate, and when to report to the platform. Consistency is reassuring to customers and reduces errors.

Make It Easy For Customers To Contact You Directly

Promote a simple complaints channel on your website and receipts. Many issues can be resolved before a frustrated customer heads to Google.

Ask For Feedback The Right Way

Request reviews from genuine customers with neutral wording, at appropriate times, and always in line with your Privacy Policy and email marketing laws. Avoid wording that pressures customers to post only positive feedback.

Respond Professionally, Publicly And Promptly

For most genuine complaints, a timely, empathetic response can turn a critic into an advocate. Keep it factual and brief, and offer a direct line to resolve the issue offline.

Use Platform Tools And Keep Records

Know how to flag violations on the platforms your customers use most. Maintain a simple record of reviews you’ve reported and the outcomes. This will support future reports and any legal steps if needed.

Escalate Smartly

When a review is clearly fake or defamatory, combine platform reporting with a targeted legal step. A proportionate, well‑timed cease and desist letter - followed by a concerns notice if required - often achieves removal faster than a lawsuit.

For more platform‑specific tactics, keep a reference to your preferred approach to Google review disputes and to options when dealing with clear fake reviews.

Key Takeaways

• Small for‑profit companies with fewer than 10 employees (and not related to another company) can sue for defamation; larger companies generally can’t, but individuals can and other claims may exist.
• Not every negative review is defamatory. False statements of fact can be, while honest opinions usually aren’t. The serious harm (or serious financial loss) threshold also applies.
• Platform tools, calm responses and targeted letters often fix issues faster and with less risk than court. Preserve evidence and follow the concerns notice and “offer to make amends” steps when appropriate.
• Don’t create ACL or privacy problems while managing reviews. Avoid fake or cherry‑picked testimonials, “gag” clauses and spammy requests; keep a compliant Privacy Policy and follow email marketing laws.
• Have a clear internal reviews policy, respond professionally and escalate proportionately. Use platform reporting for fake reviews and consider a cease and desist letter where the content is clearly harmful and false.
• If litigation is on the table, get advice on prospects, costs and alternatives - and consider ACL risks and public relations impacts alongside legal strategy.

If you’d like a consultation about managing harmful reviews or potential defamation action for your small business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.