Online Retailer Kogan Fined for Alleged False or Misleading Representations
Tuesday 19 January 2016 @ 9.42 a.m. | Legal Research | Trade & Commerce
Australian online electronics store, Kogan.Com Pty Ltd (Kogan) has paid penalties totaling $32,400 following issue of three infringement notices by the Australian Competition and Consumer Commission (ACCC).
Background
The ACCC issued the infringement notices because it had reasonable grounds to believe that Kogan had made false or misleading representations about the price of three computer monitors advertised by Kogan during a Fathers’ Day promotion on its eBay store, in contravention of the Australian Consumer Law (the ACL) [Sch2 to the Competition and Consumer Act 2010 (Cth)].
As part of the Fathers’ Day promotion in 2015, Kogan advertised on its eBay store that consumers would receive a 20% discount on the following computer monitors if they were purchased between 24-29 August 2015:
- Kogan 27-inch Cinema Display WQHD;
- Kogan 28-inch 4K LED Monitor; and
- Asus 27-inch LED Monitor PB278Q.
The Alleged Deception by Kogan
Before, or at the start of the promotion, Kogan increased the prices of the three computer monitors featured on its eBay store. As a result, although consumers received a 20% discount off the newly increased prices, they in fact only received a 9% discount off the previously advertised prices for each of the three computer monitors.
Shortly after the promotion ended and the 20% discount offer ceased, the advertised prices of the three computer monitors returned to the lower prices offered on Kogan’s eBay store before the promotion commenced.
Reaction from the ACCC
Commenting on the Kogan matter in a recent ACCC Media Release, the ACCC Acting Chair Dr Michael Schaper said:
“It is simply unacceptable for businesses to raise prices before applying a discount in order to give consumers the misleading impression that they are obtaining a larger percentage discount than is actually the case. Truth in advertising and consumer issues in the online market place are both current enforcement priorities.”
Kogan’s payment of $32,400 to the ACCC is not considered an admission that it broke ACL, and is based on just three items from its 30,000-strong catalogue.
The ACCC previously raised concerns about Kogan’s advertisements in 2009, saying Kogan advertised discounts on prices it had not actually offered. The company then agreed to an undertaking that it would …
“not offer or advertise any goods as being on sale, by reference to a price, unless those goods have been offered for sale or sold at the higher price in reasonable quantities for a reasonable amount of time within a reasonable period of the date of the offer or advertisement”.
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Sources:
Australian online retailer Kogan fined $32,400 for raising prices before discounting goods - Article from news.com.au
Kogan pays $32,400 penalty for alleged false or misleading representations in a Father's Day promotion – ACCC Release MR 4/16
