The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from LivingSocial, an online group buying site as a result of concerns about a term in it’s consumer contracts, and representations made on it’s website.
In the ACCC’s view, during 2011 and 2012 LivingSocial engaged in misleading and deceptive conduct and made false or misleading representations on its website about consumers’ refund rights.
In addition, the ACCC considers that from 2011 LivingSocial made false or misleading representations on its website about the price of certain deals.
From at least January 2012 to November 2014, LivingSocial’s terms and conditions contained a term that permitted LivingSocial to make substantive changes to its terms and conditions without notifying its consumers or voucher purchasers. In the ACCC’s view, this was an unfair contract term.
LivingSocial has acknowledged the representations may have contravened the Australian Consumer Law (ACL) and that the term in its consumer contacts was likely to have been unfair, as defined by the ACL.
Rod Sims, chairman of the ACCC, said 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.
“Online businesses must ensure that they do not mislead consumers about their consumer guarantee rights, and that the price and any restrictions on a deal being offered are clearly and accurately stated.”
In the undertaking accepted by the ACCC, LivingSocial has undertaken that it will not make false or misleading representations with respect to price, or rights, remedies or guarantees, including consumer guarantees under the ACL.
It will give voucher purchasers refunds in all circumstances where they are entitled to a refund in accordance with LivingSocial’s terms and conditions and/or the consumer guarantee provisions of the ACL.
Display prices of deals inclusive of all mandatory additional fees except for delivery fees, the minimum charge for which will otherwise be specified if known at the time of publication and will use only comparison pricing statements that are not misleading in representing the savings that could be achieved.
It will send emails to all LivingSocial subscribers when substantive updates are made to its terms and conditions, and send an email to all LivingSocial subscribers containing a corrective notice.
It will also develop and implement a compliance program.
A significant number of complaints have been received by the ACCC and other ACL regulators 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 third matter pursued by the ACCC against an online group buying site operator. In December 2013 the Federal Court ordered Scoopon to pay total pecuniary penalties of $1 million for making false or misleading representations to both businesses and consumers.
The ACCC also instituted proceedings this year against Spreets for misleading and deceptive conduct and making false or misleading representations. The Spreets matter is listed for a penalty hearing before the Federal Court in April 2015.
