Kogan fined $350,000 for misleading tax time promotion, ordered to pay ACCC’s costs
The tax time promotion the Federal Court ruled misleading in July will cost Kogan $350,000 in fines, the court has now decided.
The Australian Competition and Consumer Commission (ACCC) began court proceedings against the retailer in May last year, alleging it made false and misleading representations when advertising a 2018 tax time discount code.
The court sided with the consumer watchdog, ruling that the 10% off ‘sale’ was misleading because it saw more than 600 products cost the same as, or more than, their pre-promotion price.
Kogan advertised its ‘TAXTIME’ 10% promotion after raising the prices of 600 items immediately before the sale began
The court found the brand upped the prices of many of those products immediately before the sale, most by at least 10%. After the promotion ended, the items reverted to their pre-sale prices.
“Kogan’s contravening conduct must be viewed as serious, as misrepresentations about discounts offered on products not only harm purchasers acquiring such products on the basis that they are getting a genuine discount but also may impact on consumer confidence in discount promotions when legitimately made – that is, when products are being offered for sale with a genuine discount on price,” Justice Davies said in her judgment.
Kogan advertised the discount in emails sent to more than 10m consumers and in SMS messages sent to more than 930,000 consumers.
“Consumers were not receiving a genuine 10% discount as promised, and this affected high-value products such as Apple MacBooks, cameras and Samsung Galaxy mobile handsets,” said the ACCC’s chair, Rod Sims.
“This decision sends a strong signal to businesses like Kogan, which regularly conduct online sales promotions, that they must not entice consumers to purchase products with a promise of discounts that are not genuine.”
Kogan will also have to pay the costs the ACCC incurred in taking the retailer to court. The watchdog also went after related Kogan entities in 2009 and 2016 for allegedly similar behaviour regarding pricing.
Earlier this year, companies behind Voltaren were ordered to pay $4.5m for making misleading marketing claims after the ACCC pursued legal action. The ACCC won a separate court case that saw STA Travel fined $14m for misleading advertisements, and proved that Trivago also broke the law and misled consumers.
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Brittney Rigby was Mumbrella's deputy managing editor - news and analysis. She left Mumbrella in April 2021.
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