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MISLEADING OR DECEPTIVE CONDUCT by Froothie, Optimum

Extract from www.allens.com.au
MISLEADING OR DECEPTIVE CONDUCT: PRICING IN THE ONLINE SPACE – KOGAN/FROOTHIE
The ACCC recently issued infringement notices against Athena Solutions Pty Ltd trading as Froothie Australia and Kogan.com Pty Ltd for alleged false or misleading advertising in the online retail space.
Froothie received an infringement notice after advertising a blender on its website at a 'promo price', which was shown immediately below a strike-through price statement. The ACCC had reasonable grounds to believe that this constituted a false or misleading representation (thereby entitling the ACCC to issue an infringement notice), as Froothie could not demonstrate that the blender had ever been sold or offered for sale at the strike-through price. Consequently, the two-price comparison did not reflect a genuine discount for consumers. Froothie incurred a penalty of $10,800 for this conduct.
Kogan received three infringement notices and paid $32,400 in penalties for similar online retailing practices. In connection with its 2015 Fathers' Day promotion, Kogan advertised three computer monitors at a purported 20 per cent discount on its eBay store. However, immediately before this promotion, Kogan increased the prices of these products. The claim of a 20 per cent discount was based on a comparison with these higher prices rather than the original lower prices. When compared to the previously displayed prices, customers only received a 9 per cent discount. At the end of the promotion period, Kogan returned the monitors to the original lower prices. The impression that consumers were benefiting from a larger percentage discount than was in fact the case was considered by the ACCC to be a false or misleading representation.
What this means
By imposing penalties on Froothie and Kogan, the ACCC has affirmed that consumer issues in the online marketplace, including truth in advertising, continue to be a core enforcement priority for the ACCC. The ACCC's approach in issuing infringement notices also demonstrates the ACCC's preparedness to use the full range of enforcement powers available to it as appropriate.  
If you would like more information on this issue, get in touch with Jacqueline Downes

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