ACCC v viagogo AG (No 3) [2020] FCA 1423: viagogo Fined $7m for Misleading Consumers

Thursday 8 October 2020 @ 7.30 a.m. | Legal Research | Trade & Commerce

The Australian Competition and Consumer Commission (“ACCC”) has revealed in a Media Release that the Federal Court of Australia (“the Court”) has handed down a decision where ticket reseller viagogo AG (“viagogo”) has been ordered to pay a penalty of $7 million for “breaching the Australian Consumer Law ('ACL') by making false or misleading representations when reselling tickets for live music and sports event”.

Background

On 18 April 2019, in Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544, Federal Court Justice Stephen Burley found that viagogo had engaged in misleading and deceptive conduct by acting in a way liable to mislead the public when reselling entertainment, music and live sport event tickets, in breach of the Australian Consumer Law.  According to a Sydney Morning Herald article, viagogo has sold tickets to events such including Queen and Adam Lambert, The Book of Mormon musical, the Australian Open tennis tournament, and Ashes cricket matches.

The Sydney Morning Herald said:

"It was also not clear to consumers that "booking fees" of up to 28 per cent of the ticket price applied, on top of advertised prices, or that claims about the scarcity of tickets remaining for an event did not refer to the venue as a whole but only to tickets available through the reseller's website.

The court found viagogo had suggested it was an official ticket seller by using the phrase "Buy Now, viagogo Official Site" in sponsored advertisements on Google that directed consumers to the Switzerland-based ticket reseller's Australian website, which was its "virtual shopfront in Australia"."

The Judgment

Justice Burley ordered viagogo to pay a total of $7 million for four separate breaches of the ACL, covering representations about the nature of its services, the quantity of tickets available and its pricing. He also ordered viagogo to pay the ACCC's legal costs and granted an injunction restraining viagogo from engaging in the impugned conduct, as well as an Order for viagogo to participate in a Compliance Program .

At para 58 of the judgment Burley J said viagogo had misrepresented that:

" … the consumer could purchase official, not resold, tickets through the viagogo Australian website … viagogo was far from an authorised vendor of tickets …”

His Honour also noted it was a “very serious misrepresentation, because it fundamentally misled consumers as to the nature of viagogo's business in order to attract consumers”. In fact, viagogo was not an official seller but provided “… a platform for third parties to sell tickets second hand.”

The Court found viagogo's use of phrases such as “only a few tickets left” was deceptive because they related to tickets available through its own website — not the overall availability of tickets to an event. His Honour said at [para 67] those phrases:

“… had the effect of drawing the consumer further into a marketing web and also a transactional web … [customers were] … lured by repeated assurances that the only tickets available at the venue are going fast”.

Burley J also said that consumers drawn in by the misleading Google advertisement were “exposed to further misleading conduct” on the viagogo website. According to the Sydney Morning Herald, the ACCC had submitted the penalty should be between $12.1 million and $13.4 million, while viagogo contended it should not be more than $3 million.

Comment and Reaction from the ACCC

In a statement ACCC Chair, Rod Sims said of the Court’s decision:

“viagogo’s business practices were unacceptable. viagogo misled thousands of consumers into buying tickets at inflated prices when they created a false sense of urgency by suggesting tickets were scarce and when they advertised tickets at a lower price by not including unavoidable fees … [the] $7m penalty sends a strong signal to businesses like viagogo conducting business in Australia that they cannot get away with profiting from misleading Australian consumers about the price of the tickets they are selling, or other misleading conduct.”

Comment from viagogo

Speaking to ABC News, viagogo said the platform had been “overhauled since the court's initial decision". A spokesperson for the company said the changes included consultation with consumer protection regulators in “a number of countries … viagogo is committed to providing an important service to consumers that use our platform”.

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