Federal Court slaps Viagogo with $7m fine over ‘misleading conduct’

The Federal Court has ordered ticket re-seller Viagogo to pay a $7 million penalty, 18 months after It declared that the Swiss-based company had breached Australian consumer law.

Viagogo had protested it had made changes since court action began in Australia, but Justice Stephen Burley came down hard on the ticketing company.

He further issued an injunction to stop Viagogo from ever continuing its practices in this country, ordered it to a compliance program and awarded costs against it.

In April 2019 the Federal Court found that Viagogo made false or misleading representations to consumers via Google ads over a two month period in 2017.

In those ads, Viagogo claimed it was the ‘official’ seller of tickets to particular events, that certain tickets were scarce with phrases like “only a few tickets left”, and significant add-on fees like a 27.6% booking fee were not disclosed until late in the booking process.

The Book of Mormon musical was advertised at $135 per ticket but sold for $177.45, while Ashes cricket tickets advertised at $330.15 changed hands for $426.81.

In imposing the penalty, Justice Burley described the misrepresentations as serious or very serious, and considered the conduct demonstrated a level of deliberateness.

He described one category of representations as made on “an industrial scale for the relevant period,” and accused Viagogo of giving the court “the appearance of being a company that is indifferent to the interests of Australian consumers and which prefers to elevate its own profit motives above those interests, even when on notice of the potential for harm being done”.

Viagogo responded to last week’s decision protesting the conduct covered a period of fewer than eight weeks (May 1, 2017 to June 26 2017).

“Since that time, we have overhauled our platform – a process that included consultation with consumer protection regulators in a number of countries,” the company said.

“Viagogo is committed to providing an important service to consumers that use our platform.

Making these changes had seen the company escape court action in the UK when its consumer watchdog the Competition and Markets Authority, withdrew all legal moves last September for this reason.

The Australian Competition and Consumer Association (ACCC) initiated legal proceedings in August 2017 after complaints from consumers and the live sector.

Last Friday, ACCC chair Rod Sims responded to the $7 million penalty commenting: “Viagogo’s business practices were unacceptable.

“Viagogo misled thousands of consumers into buying tickets at inflated prices when they created a false sense of urgency by suggesting tickets were scarce and when they advertised tickets at a lower price by not including unavoidable fees.”

Sims added, “Today’s $7m penalty sends a strong signal to businesses like Viagogo conducting business in Australia that they cannot get away with profiting from misleading Australian consumers about the price of the tickets they are selling, or other misleading conduct.”

In recent years various state and territory governments in Australia have introduced specific legislation regulating the reselling of tickets, such as putting a cap on price make-ups.

In December 2019, the Federal Government proposed introducing a new information standard for ticket resales to make it easier for Australian consumers to make informed choices about their purchases.

Among its demands are that resale websites must disclose the face value of tickets, and to disclose that they are not the primary ticket seller.