Scoopon, the online group buying business, has been fined $1 million for making false or misleading representations to both businesses and consumers.
It also has agreed to a community service order by running a seminar on Australian consumer law for online group buying traders who are members of the Association for Data-driven Marketing and Advertising (ADMA).
Scoopon found itself in the Federal Court after being pursued by Australian Competition and Consumer Commission (ACCC).
The court found Scoopon made false or misleading representations to:
- consumers about their refund rights, and the price of goods advertised in relation to some of its deals
- businesses that there was no cost or risk involved in running a deal with Scoopon, when this was not the case; and
- a business that 30 per cent of vouchers that would be sold would not be redeemed, when there was no reasonable basis for this representation.
ACCC Chairman Rod Sims said:
“The ACCC understands that Scoopon has worked to improve its systems and processes which gave rise to this conduct to meet its obligations under the ACL. However, this penalty serves as a warning to other businesses in the industry to improve their practices or face action from the ACCC.”
The ACCC says online competition and consumer issues are a priority.
Online traders have the same obligations as traditional retailers.