The Federal Court in Brisbane has penalised Harvey Norman Holdings Ltd (Harvey Norman) $1.25 million for misleading advertising following action by the Australian Competition and Consumer Commission.
In Justice Collier’s judgment, her Honour described Harvey Norman’s conduct as “seriously misleading and deceptive, on a significant and far-reaching scale.”
In September 2010, Harvey Norman promoted the sale of 3D televisions in the ‘3D Finals Fever’ catalogue. This catalogue created the misleading and deceptive impression that consumers in all places where the catalogue was distributed could buy and use a 3D television to watch the 2010 AFL and NRL grand finals in 3D format.
In fact, the 3D broadcast was limited to metropolitan Brisbane, Newcastle, Sydney, Melbourne, Adelaide and Perth. The catalogue was distributed throughout Australia in places where there was no 3D broadcast of the football grand finals, including after Harvey Norman became aware that the 3D broadcast would be so limited. It accordingly represented that the 3D televisions had uses and benefits they did not have.
The Court also found that between October 2008 and July 2011, Harvey Norman made misleading representations about the existence of certain conditions in its catalogue and website advertising.
Harvey Norman published its website and distributed catalogues to homes throughout Australia. The dominant and plain impression given by both the catalogues and the website was that the goods advertised were available at Harvey Norman stores generally. However, there was a condition in all the catalogues that the offers in them were only being made by a single store in each State or Territory, while the website had a condition that the offers appearing on it were only being made by one store in Australia.
The conditions were in fine print and not prominent, and contradicted the main impression otherwise given by the catalogues and the website.
Justice Collier in summarising the nature and extent of Harvey Norman’s conduct stated that the facts that constituted the contravening conduct painted “a picture of an expensive, misleading and calculated campaign of sizable proportions, characterised by blatant and deliberate disregard of the truth, cynical strategies to capitalise on contemporary sporting events (in the case of the 3D Conduct) and the contemptuous manipulation of the expectations of ordinary consumers in respect of so-called “fine print” (in relation to the Catalogues).”
“The conduct of [Harvey Norman] appeared intended to reach as many Australian consumers as possible, in all parts of the country, through such diverse media as internet, newspaper and letterbox drop.”
ACCC Chairman Rod Sims said.
“Retailers have a responsibility to ensure that accurate information is given to consumers about the uses and benefits of new and emerging technology, such as 3D television.”
“Harvey Norman knew the facts; it should have got it right, and the Court agreed.”
“A headline representation cannot be contradicted or turned on its head by fine print conditions or requiring consumers to navigate through terms and conditions to discover the truth,” Mr Sims said.
“Fine print is not an antidote to misleading or deceptive conduct.”
In relation to Harvey Norman’s compliance program, Justice Collier stated, “The inference available to the Court is that this is yet another unfortunate example of a corporation with a compliance policy to which mere lip-service is paid. Another inference available is that the compliance policy in the organisation was woefully inadequate.”
Justice Collier of the Federal Court also made orders:
- restraining Harvey Norman from engaging in similar conduct for a period of three years;
- requiring it to publish corrective notices in regional and metropolitan newspapers and on the Harvey Norman website; and
- requiring it to pay a contribution towards the ACCC's costs.
Harvey Norman admitted it had contravened the former Trade Practices Act 1974 and the Australian Consumer Law and consented to the penalties and other orders sought from the Court.