Federal Court declares StoresOnline misled consumers

6 May 2010

The Federal Court has found that e-commerce marketing companies StoresOnline International, Inc. and StoresOnline, Inc made misleading and deceptive representations regarding the price of their products and services.

This judgment represents a successful conclusion to the second lengthy proceeding taken by the Australian Competition and Consumer Commission against StoresOnline.  In each case it was claimed that there was misleading and deceptive conduct in the promotion and sale of StoresOnline home business e-commerce software packages.  The packages were promoted through a series of seminars, primarily to those wishing to set up small businesses online.

Justice Edmonds made orders by way of declarations that StoresOnline, since October 2006, had engaged in false and misleading conduct in breach of the Trade Practices Act 1974 in relation to the promotion and sale of its software packages.

The particular conduct of StoresOnline found to contravene the Act included:

  • at workshops and seminars StoresOnline represented that it offered for sale or sold packages at a "full" price when StoresOnline packages had not been offered for sale or sold at that price in Australia

  • at workshops and seminars StoresOnline represented that it intended to offer StoresOnline packages for sale to workshop attendees at a particular offer price for 90-days from the date of the workshop when it had no such intention and StoresOnline packages were not available for purchase in the period following the workshop, and

  • at workshops and seminars StoresOnline represented that the difference between the full price and the 90-day offer price for StoresOnline packages was the amount a consumer could save by attending a Stores Online workshop and purchasing the packages when that level of saving did not exist.

The court also ordered that StoresOnline pay the ACCC's costs.

ACCC chairman Graeme Samuel said these proceedings showed the ACCC's willingness to pursue proceedings against overseas corporations when such corporations engaged in conduct in Australia which affected Australian consumers.

"International corporations are on notice that if they mislead or deceive Australian consumers they will risk similar court action by the ACCC," he said.

In his judgment, Justice Edmonds accepted the contention of the ACCC that the fingerprint of StoresOnline International 'was all over this case'.

An additional aspect of this matter was resolved on 18 December 2009 when the Federal Court found that StoresOnline failed to comply with undertakings provided to the ACCC on 24 April 2006 under section 87B of the Trade Practices Act 1974.  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.

Release number: 
NR 095/10
ACCC Infocentre: 

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Media enquiries: 
Mr Graeme Samuel - (03) 9290 1812
Ms Lin Enright - (02) 6243 1108