The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against Spreets Pty Ltd (Spreets) alleging that it engaged in misleading and deceptive conduct and made false or misleading representations to consumers in relation to deals offered on its online group buying website.
The ACCC alleges that, in 2011 and 2012, Spreets engaged in misleading and deceptive conduct and made false or misleading representations about the price of certain deals, consumers’ ability to redeem vouchers, and the applicability of consumer guarantees under the Australian Consumer Law (ACL), specifically in relation to consumers’ refund rights.
At the time of the alleged conduct, Spreets operated one of Australia’s largest online group buying websites. These websites, also referred to as ‘daily deals’ or ‘deal of the day’ sites, sell vouchers for heavily discounted goods or services. Online group buying sites typically negotiate these deals with businesses and then market the deals to their members and the public by promotional emails, social media promotions and on their websites. Spreets no longer offers deals directly to consumers, and instead now gathers and publishes deals offered by a range of third party online group buying sites.
“Businesses selling to consumers online have the same obligations under the Australian Consumer Law as all other businesses, and consumer guarantees, including refund rights, apply when consumers purchase online,” ACCC Chairman Rod Sims said.
“Online businesses must ensure that they do not mislead consumers and that the price and any restrictions on a deal being offered are clearly and accurately stated.”
The ACCC is seeking declarations, pecuniary penalties and costs.
This matter has been listed for a Directions Hearing before Justice Collier on 30 July 2014 at 9.30am, in the Federal Court Brisbane.
A significant number of complaints have been received since the online group buying industry emerged in Australia in 2010, and the ACCC and other ACL regulators have worked to improve practices in the industry.
This is the second action the ACCC has taken against an online group buying site operator. The Federal Court ordered Scoopon to pay total pecuniary penalties of $1 million for making false or misleading representations to both businesses and consumers.