Viagogo faces hefty penalties over false, misleading advertising - Legalwise Seminars

KHQ Lawyers’ Principal Solicitor David Robbins and Lawyer Laura-Jane Palma discuss the Australian Competition and Consumer Commission’s successful court action against controversial online ticket reseller Viagogo.

The ACCC has succeeded in Federal Court action against Swiss-based online ticket reseller Viagogo, with the Court finding Viagogo’s advertising practices were false and misleading in breach of the Australian Consumer Law.

Following hundreds of complaints received from disgruntled consumers, the ACCC’s case centred on a number of Viagogo’s statements, including:

1. The use of “Buy now, Viagogo Official Site” in sponsored Google ads, which the ACCC said falsely represented that Viagogo was the official ticket seller for the promoted event, and had approval from events hosts and stadiums to be selling the tickets.

2. Various statements on Viagogo’s website to the effect that tickets for events were selling out or in limited supply, which created a false sense of urgency in circumstances where it failed to disclose that this referred only to tickets on Viagogo, and not for the event generally.

The ACCC also took exception to Viagogo’s pricing practices, which involved adding exorbitant administration and booking fees (up to 27% of the ticket price) to the advertised price only at the final stage of the transaction, after customers had already been drawn into the “transactional web.”

Viagogo argued its advertising was not misleading on various grounds, including that further information was available to viewers of the listed search results indicating the true nature of its business as a reseller, rather than an authorised seller, of tickets.  However, Viagogo’s arguments were largely rejected by the Court, with Burley J finding that in the context of a ticketing website, consumers were unlikely to read every word on a webpage or click on every link.

The Court’s decision serves as an important reminder that:

1. In assessing advertising material, the “dominant” message is of crucial importance.

2. Qualifying material must be sufficiently drawn to consumers’ attention to prevent a headline statement from being misleading.

3. Words like “official” create a strong impression that is very difficult to disclaim or qualify.

4. Price disclosure requires special care, with particular rules about fees and charges that must be included in an advertised price.

5. Businesses cannot rely on disclosures “at the checkout” to correct mistaken impressions at the point of advertising, because by that time consumers have already been enticed into the transaction.

Viagogo’s penalties will be determined at a later stage, with a maximum penalty of $1.1 million per breach at the time of the conduct.  Maximum penalties for consumer law breaches have since dramatically increased to the greater of $10 million, three times the value of the benefit or, if that can’t be determined, 10% of annual turnover in the relevant 12-month period.

If you have any questions about this case, or your pricing or advertising practices, please contact the authors.

David Robbins leads the KHQ Competition Law & Regulatory Compliance team.  He is a highly experienced litigator in state and federal courts, and regularly deals with the ACCC and ASIC.  He draws on this experience to implement practical legal compliance programs for clients, to help protect their brand and reputation and stay out of trouble with regulators, competitors, customers and suppliers.  His clients span diverse industries and he has a particular reputation for achieving commercial outcomes quickly. Contact David at drobbins@khq.com.au or connect via LinkedIn .

Laura-Jane Palma is a lawyer in the KHQ Corporate & Commercial team.   She was admitted to practice in 2017 and joined KHQ Lawyers following the completion of her graduate year.  Her experience includes preparing, advising on and negotiating all forms of commercial agreements, contractual disputes and settlements, restructuring, mergers and acquisitions, and corporate governance.  She is passionate about achieving practical outcomes and does so by learning her client’s business in order to best understand their legal needs. Contact Laura-Jane at lpalma@khq.com.au or connect via LinkedIn .

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