Following proceedings instituted by the ACCC, the Federal Court has found that e-commerce marketing companies StoresOnline International, Inc. and StoresOnline, Inc failed to comply with undertakings provided to the ACCC in April 2006.
The court made orders by way of declarations and injunctions relating to breaches of the undertaking by StoresOnline when it conducted e-commerce marketing presentations in Australia in October 2006 and March 2007. StoresOnline admitted the breaches and consented to the court orders being made.
"The ACCC often accepts court-enforceable undertakings from traders as a means of resolving its concerns about a trader's compliance with the Trade Practices Act," ACCC chairman Graeme Samuel said. "The legal action taken against StoresOnline shows that the ACCC will actively pursue its right to enforce these undertakings through court proceedings when it is clear that traders have failed to meet their promised obligations to both the ACCC and to consumers."
The court declared that StoresOnline failed to comply with the undertaking by:
- failing to advise purchasers of the StoresOnline software that they were entitled to a three business day cooling off period
- in circumstances where StoresOnline advised consumers attending its presentations that the StoresOnline software was easy to use or could be used to quickly develop a profitable internet retail business, it failed to also advise those consumers that successful use of the StoresOnline software would depend on a number of factors related to the consumer's familiarity with computing and business operations
- using testimonials in the conduct of its presentations without first providing the ACCC with a declaration about the nature and content of the testimonials, and
- failing to maintain and archive audio recordings of its presentations in Australia.
The court also made a number of additional orders, including injunctions restraining StoresOnline, for a period of two years, from:
- again engaging in the conduct found to breach the undertaking, and
- conducting any presentations in Australia unless the ACCC is given prior notification of the presentations, and an audio recording of each presentation is made.
A further aspect of the ACCC's case involves allegations that StoresOnline contravened the Act by making misleading and deceptive representations at presentations regarding the price of its products and services. That aspect of the case was heard in the Federal Court on Tuesday before Justice Edmonds, who has reserved his judgment.
StoresOnline provided the ACCC with an undertaking under section 87B of the Trade Practices Act 1974 on 24 April 2006 following court action commenced by the ACCC on 1 June 2005. In that case, the ACCC alleged that StoresOnline had engaged in misleading and deceptive conduct in the promotion and sale of its home business e-commerce software packages.