Viagogo faces the music: ticket reseller found guilty of breaching the ACL by engaging in misleading or deceptive conduct

In a recent decision of Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544, the Federal Court of Australia has found that online ticket reseller Viagogo had engaged in four misrepresentations that were misleading or were likely to mislead consumers, and that they were in breach of the Australian Consumer Law (ACL).

 

Viagogo AG is a company incorporated in Switzerland that operates an Australian website in which it resells tickets of live events, including tickets for music concerts, sporting events and theatre performances.  Importantly, people who resell their tickets may resell them via the Viagogo website at a price of their own choosing and if a buyer is found, Viagogo adds certain charges, including a booking fee of about 28% of the price of the ticket. The Australian Competition and Consumer Commission (ACCC) brought a claim against Viagogo, alleging that it had engaged in misleading conduct in the manner in which it advertised in its sponsored links on Google and presented particular pages on its website in contravention of the ACL.

First misrepresentation: the unofficial site

The first instance concerned Viagogo’s representation in sponsored Google links that it was “Official” in the statement “Buy Now, viagogo Official Site”. The ACCC argued that this representation was misleading as it caused consumers to falsely believe that Viagogo was the “official seller of tickets” as opposed to a ticket reseller. The Federal Court (Burley J) agreed with the ACCC on this point, noting at [129] that:

“an ordinary consumer would understand the words “Buy Now, viagogo Official Site” to convey that if the consumer followed the link, he or she would be taken to a website where tickets for the relevant event could be obtained from the official, or authorised vendor.”

In addition, his Honour found that the “Official Site Representation” breached section 29(1)(h) of the ACL as it gave the false impression that Viagogo was affiliated with the event host or had its sponsorship or approval. The representation was also found to be in breach of section 34 of the ACL as it was “liable to mislead the public as to the nature of its services”. His Honour rejected Viagogo’s argument that the sponsored link was the first in the list and therefore, an ordinary consumer would conduct wider searches further down the list to consult “organic listings”. Notably, it was found that Viagogo could not rely on information from the organic search results, which were outside its control, to clarify or correct the “misleading impression created by its own paid advertisement”.

Second misrepresentation: only 8 (or 800) tickets remaining!

The second instance of misrepresentation related to “Quantity Representations” in which statements were made on the website that tickets were likely to run out soon, or there was only a scarce number of tickets available. The Court made the following general observations in relation to the Viagogo website:

“The consumer is drawn not only into a marketing web, but also into a transactional web. … At each stage the consumer is assured that tickets are running short, that time is running out to buy, and that the tickets that they have selected will soon be released to other, competing purchasers. The increasing urges to completion and the “hurry up” messages create such an impression that the consumer is at risk of missing out on tickets, that he or she is likely increasingly to confine attention to only that information necessary to enter details and complete the transaction.”

The Court found that the representations were misleading pursuant to sections 18(1) and 34 of the ACL on the basis that Viagogo failed to “disclose that the references to tickets still available were references to the number or percentage of tickets through the viagogo website only, and not for the venue as a whole”.

Third and fourth misrepresentations: the price is (not) right

The third instance of misrepresentation involved representations by Viagogo on its Tickets and Seating Selection Page that consumers could purchase tickets for the stated amount, even though this representation as to the total price was false because additional fees were payable.

The fourth instance of misrepresentation concerned representations as to price made by Viagogo on its Delivery Page that excluded extra costs such as high booking fees. Significantly, Viagogo failed to “specify in a prominent way, and as a single figure, the price of each of the tickets that included additional fees payable” in breach of the ACL, including section 48 which prohibits part-price representations.

Key takeaways

Ultimately, the Court found in favour of ACCC in deciding that Viagogo had made misleading or false representations, with orders for relief and penalties against Viagogo to be handed down at a later date after the parties have the opportunity to make submissions in relation to this question.

This case serves as a timely reminder to organisations that are subject to the ACL that they must provide clear and sufficient information to consumers about the nature of their goods and services, in addition to clearly notifying consumers of additional fees attaching to advertised prices or face the risk of public prosecution by the ACCC. In particular, merchants are not permitted to distract, and thereby potentially mislead, consumers by use of an electronic interface which has the effect of “corralling him or her towards speedy completion of the purchase”.

McCabe Curwood has significant expertise in competition and consumer law, including advising and acting for clients in misleading and deceptive conduct cases.

Contributors

Nathan Jones Senior Associate
Emily Truong Law Graduate