Federal Court finds ticket reseller engaged in misleading and deceptive conduct

In the recent case of ACCC v Viagogo AG, the Federal Court considered whether Viagogo engaged in misleading and deceptive conduct by acting in a way liable to mislead consumers when reselling event tickets in breach of the Australian Consumer Law.

This decision is a reminder to businesses to accurately describe the nature of the products or services it is providing and to accurately disclose any additional fees and charges.

In ACCC v Viagogo AG [2019] FCA 544, the Federal Court found that representations made by Viagogo had contravened numerous provisions of the Australian Consumer Law (the ACL). In particular, the Federal Court considered whether Viagogo engaged in misleading or deceptive conduct in:

• its sponsored advertisements on Google; and
• statements regarding the price and quantity of tickets for sale on its website.

Viagogo is a ticket reselling company which operates an Australian website that it describes as an “online marketplace”. The ACCC, responding to numerous complaints it had received, commenced proceedings alleging that Viagogo had made various representations which it said contravened the ACL.

Misleading representations in sponsored advertisements

In sponsored advertisements on Google for particular events, Viagogo was displayed as the top search result, using the phrase “Buy Now, Viagogo Official Site” in the heading of the advertisements. In doing so, the Court said that an ordinary consumer would understand the use of the words “official site” to convey that if they followed the link they would be directed to a website where they could purchase tickets from an authorised vendor or host of an event, rather than a reseller of second hand tickets. The Court found that by using the words “official site” in its advertisements, Viagogo misleadingly created the impression to consumers that it was an official seller of event tickets, and that, accordingly, it had contravened the ACL.

Quantity and price misrepresentations

The Court also found that the Viagogo website drew consumers in by stating an initial price for a particular ticket, without adequately disclosing additional fees such as booking and handling fees. The additional fees were added to the ticket price after the consumer had entered their personal information and payment details, and just prior to completing their transaction.

The Court found that Viagogo ought to have included the fees in the price stated for a ticket, and that disclosing the additional fees to a consumer immediately prior to completing the transaction was insufficient.

The Viagogo website also included phrases such as:

• “Less than 1% of tickets left for this event”
• “Tickets are likely to sell out soon”; and
• “LAST CHANCE!”.

This is in addition to various other devices such as a countdown timer and pop up windows; each of which had the effect of encouraging consumers to purchase tickets with a sense of urgency, and without regard to the other information displayed on the website (which included a link to the website’s terms and conditions).

Viagogo was also found to have insufficiently disclosed that references to remaining tickets were references to the number of tickets available from the Viagogo website, and not from the venue or for the event generally.

Outcome

The ACCC established each of the representations that it alleged Viagogo had made in its sponsored advertisements and on its website. The Court found that Viagogo had breached numerous provisions of the ACL.

Key Takeaway

This decision is a reminder to businesses to take care in the words and devices used in online marketing. Businesses must ensure that they are accurately representing the products or services that they offer, and that any additional fees or charges are adequately disclosed. Further, this decision clarifies that the Court does not condone attempts to neutralise misleading representations by referring to terms and conditions or similar documents that are located on separate pages on a website.

Authored by:

Scott Couper, Partner

Hannah Petersen, Graduate