ACCC takes action against Scoopon alleging it misled both consumers and businesses

5 July 2013

The Australian Competition and Consumer Commission has issued proceedings against Scoopon in the Federal Court. The ACCC alleges that Scoopon engaged in misleading and deceptive conduct and made false and misleading representations to businesses and consumers. 

Scoopon is one of Australia’s largest online group buying sites. These sites, 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 market the deals to their members and the public through various means including social media.

The ACCC and other Australian Consumer Law (ACL) regulators have received a significant number of complaints since the group buying industry emerged in Australia in 2010.

“The ACCC has worked closely with other ACL regulators to address issues and improve practices in the sector to reduce consumer and business detriment,” ACCC Chairman Rod Sims said.

The ACCC alleges that Scoopon misled consumers regarding their ability to redeem vouchers, their refund rights, and the price of goods advertised in relation to some of its deals. The ACCC also alleges that Scoopon represented to businesses that there was no cost or risk involved in running a deal with Scoopon, when a fee was payable to Scoopon.

Further, it is alleged that Scoopon misled businesses by claiming that between 20 per cent and 30 per cent of vouchers would not be redeemed when there was no reasonable basis for this representation.

“The ACCC has made online competition and consumer issues a compliance and enforcement priority. Ensuring that the digital revolution delivers competition benefits to consumers and small businesses is a focus for the ACCC,” Mr Sims said.

“Businesses must have reasonable grounds when making representations to consumers and to other businesses. The ACCC is working to ensure that consumers making purchases online are not misled and that online traders take adequate steps to meet their obligations under the Australian Consumer Law.”

The ACCC is seeking declarations, injunctions, community service orders, pecuniary penalties and costs.

The matter has been filed in the Federal Court, Brisbane, and is listed for a scheduling conference on 25 July 2013 at 9.30am.

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