By media realease posted to its website on Friday 5 July 2013 the Australian Competition and Consumer Commission (the ACCC) advised that it had issued proceedings against the Daily Deals Website "Scoopon" in the Federal Court. In its meadia relaes the ACCC states that it "alleges that Scoopon engaged in misleading and deceptive conduct and made false and misleading representations to businesses and consumers".
What is Scoopon?
Australia has taken to online shopping in a big way and as the ABC News reported on 5 JUly 2013, Australians spent "more than $24 billion online in the 12 months to March" this year.
In this growth group buying sites have rapidly grown in popularity, offering shoppers everything from cut price holidays to discount clothing and cheap meals. Scoopon is one of those sites an is known as one of Australia’s largest online group buying sites. These sites are also referred to in online parlance as a "daily deals" or "deal of the day" site.
Scoopon sells vouchers for heavily discounted goods or services. Typically online group buying sites, like Scoopon, negotiate these deals with businesses and market the deals to their members and the public through various means the primary ones being online and through social media.
Reason for Action
The ACCC (along with other Australian Consumer Law (the ACL) regulators) is claimning to have received a significant number of complaints since the group buying industry emerged in Australia in 2010.
The ACCC Chairman Rod Sims is quoted in the release as saying:
“The ACCC has worked closely with other ACL regulators to address issues and improve practices in the sector to reduce consumer and business detriment,”
What the ACCC Alleges?
The ACCC's media release says that the ACCC alleges that Scoopon misled consumers regarding their ability to redeem vouchers, their refund rights, and the price of goods advertised in relation to some of its deals. Further, the ACCC also alleges that Scoopon represented to businesses that there was no cost or risk involved in running a deal with Scoopon, when a fee was payable to Scoopon. Finally, the ACCC alleges that Scoopon misled businesses by claiming that between 20 percent and 30 percent of vouchers would not be redeemed when there was no reasonable basis for this representation.
In the media release ACCC Chairman Rod Sims says:
“The ACCC has made online competition and consumer issues a compliance and enforcement priority. Ensuring that the digital revolution delivers competition benefits to consumers and small businesses is a focus for the ACCC ... Businesses must have reasonable grounds when making representations to consumers and to other businesses. The ACCC is working to ensure that consumers making purchases online are not misled and that online traders take adequate steps to meet their obligations under the Australian Consumer Law.”
Nature of the Court Proceedings
The matter has been filed in the Federal Court, Brisbane, and is listed for a scheduling conference on 25 July 2013 at 9.30am - the ACCC is seeking declarations, injunctions, community service orders, pecuniary penalties and costs.
Sources:
ACCC takes action against Scoopon alleging it misled both consumers and businesses (ACCC Website)
ACCC targets daily deal website Scoopon (ABC News)
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