Holiday home website Bachcare has been fined $117,000 for editing and in some cases not publishing reviews posted by users.
Bachcare pleaded guilty to two charges under the fair Trading Act after an investigation by the Commerce Commission.
The commission said between June 2017 and September 2018, the company removed negative comments about rental properties listed on its website, as well as comments about Bachcare's maintenance and management of them.
Reviews that gave a rating below three-and-a-half stars weren't published at all.
That created artificially positive impressions about certain holiday homes and Bachcare's services, the commission said.
This is the first court action taken by the Commerce Commission over online reviews.
Commissioner Anna Rawlings said online reviews were an important source of information for consumers.
"This is particularly so in markets such as short-term property rentals, where customers may not have access to other information to help them to decide whether a property is suitable for their needs.
"Consumers have a right to expect that reviews solicited from past customers will be published in a way that accurately represents the feedback received," she said.
In this case, consumers had no way of knowing that star ratings were inflated, or that the text of some reviews had been edited to cast the property in a more positive light, Ms Rawlings said.
"This type of conduct undermines the trust that consumers will place in reviews of products or services.
Businesses which collect and present online reviews have to "faithfully present genuine customers' reviews", Rawlings said.
"Any discretion exercised by the trader over the publication of reviews must be made very clear, otherwise consumers can be misled and traders risk breaching consumer law."