SYDNEY, July 31 (Reuters) - The Australian hotel operator owned by billionaire Harry Triguboff was fined A$3 million ($2.2 million) on Tuesday for misleading customers, after it withheld unhappy guests' details from travel site TripAdvisor Inc to avoid bad reviews.
Between November 2014 and October 2015, Meriton Serviced Apartments falsified or held back the contact details of customers it thought might be critical at 13 properties, Australia's Federal Court found.
The company's booking software allowed staff to add letters to customers' email addresses to stop TripAdvisor from reaching them if they had made complaints during their stay. It also held back reviews during maintenance periods at the hotels.
On Tuesday, the court imposed the A$3 million fine, which is payable within a month.
This is about a fifth of what the judge had said the maximum levy could be, A$14.3 million, but higher than the A$330,000-A$400,000 Meriton had suggested it should pay.
"Meriton's conduct created an unduly favourable impression," Justice Mark Moshinsky said in a written judgment.
"The contravening conduct occurred on a large scale, and the TripAdvisor website, where the misleading impression was created, attracted a very large number of consumers. In these circumstances, I consider that a large penalty is required."
Meriton did not immediately respond to an emailed request for comment.
The company had previously disputed that the practice had any effect on its TripAdvisor rating and it stopped withholding customers details as soon Triguboff - who was rated Australia's wealthiest man in 2016 - found out.
The Australian Competition and Consumer Commission (ACCC), which brought the proceedings against Meriton, had initially sought a A$20 million penalty.
"This case sends a strong message that businesses can expect ACCC enforcement action if they're caught manipulating feedback on third party review websites," ACCC Commissioner Sarah Court said in a statement.
$1 = 1.3473 Australian dollars Reporting by Tom Westbrook; Editing by Himani Sarkar