Legal Issues Faced by Viagogo

This assignment analyzes the legal issues faced by Viagogo, a ticket reselling platform, under the Australian Consumer Law (ACL). It focuses on cases where Viagogo has been accused of misleading and deceptive conduct, particularly regarding its use of the term 'official' and pricing practices. The analysis draws upon court decisions involving similar companies and recommends ways for E-ticketing Limited, another platform with a similar business model, to avoid legal pitfalls by adhering to ACL provisions.

Running head: AUSTRALIAN CONSUMER LAW
Australian Consumer Law
Name of the student
Name of the university
Author note

1AUSTRALIAN CONSUMER LAW
Why the ACCC considers that Viagogo has breached the ACL
The Australian Competition and Consumer Commission (ACCC) has taken the
Switzerland based company Viagogo to the Federal Court as more than 400 consumer
complaints had been launched against the company in only a year. The ACCC have alleged
that the company has violated the provisions of the Australian Consumer Law as provided in
scheduled 2 of the Australian Competition and Consumer Protection Act 20101 through
making representations which were false and misleading along with indulging in conduct
which was deceptive and misleading. The legal proceedings have been initiated against the
company after the investigation into the company had been conducted by the CHOICE. The
investigation found that the alleged company was involved in Opaque advertising methods
and drip pricing in order to enhance its sales. The purpose of the company was to facilitate
the sale of tickets by people who were not able to attend a particular event which is a
legitimate purpose given the right to people to sell tickets for event they cannot attend.
However in practicality the company charging hefty fees in relation to such transactions2.
473 contacts have being received by the ACCC this year from Australian consumers
as provided by the Deputy Chairman of ACCC Delia Rickard. It was provided by the
Australian consumer watchdog that they expect all website indulging in ticket re-selling to be
upfront and clear with respect to the fees charged by them along with the type of tickets sold
and the characteristic of their business. It had been alleged by the ACCC that the company
did not disclose unavoidable and significant fee properly in relation to the ticket price which
included booking fee of 27.6% along with the handling fee3. Section 18(1) of the Australian
1 Australian Competition and Consumer Protection Act 2010 (Cth) at Schedule 2
2 ACCC Takes Viagogo To Federal Court After More Than 400 Complaints (2017) CHOICE
<https://www.choice.com.au/shopping/everyday-shopping/tickets/articles/accc-takes-viagogo-to-federal-court-
280817>.
3 ACCC Takes Ticket Reseller Viagogo To Court (2017) Australian Competition and Consumer Commission
<https://www.accc.gov.au/media-release/accc-takes-ticket-reseller-viagogo-to-court>.

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Consumer Law prohibits any person or company to indulge in action which is misleading and
deceptive are likely to mislead or deceive with respect to activities of trade and Commerce4.
The legal proceedings which have been initiated by the consumer regulator was based on the
tickets sold by the company between 1st May and 26th June 2017. “While advertising to sell
the book of moron for $135 the company was adding an additional fee of $42.50, the tickets
for Ashes which were advertise to be sold for $ 330. 15 were added with an additional fee of
96.66 and the tickets for Cat Stevens which were advertise to be sold for $450 were added
with an additional fee of $29.95.” This action of the company accounted to the violation of
Section 29 (1) (i) of the ACL which is in relation to false and misleading representation. As
per the provisions of the section a person is not allowed to make a representation which is
false and misleading to the consumers in the activities of trade and commerce. This action of
the company is also the contravention of section 48 (1) (a) and (b) of the ACL in relation to
hidden price5.
In addition consumers were often directed to the website of the company without their
knowledge from Google search where the company had hired top search results for maximum
Entertainment music and sports events. An advertisement was made by the company that they
are the authorised resellers which made many consumers to purchase tickets from them
without having the knowledge that the company is actually a reseller. Allegations were made
by the consumer watchdog that true the use of word official the company made a
representation in such advertisements that consumers would be able to purchase original and
official tickets from them where actually the company was a platform to sell tickets which
was sold by others. This was again the breach of section 18(1) ACL in relation to deceptive
and misleading conduct as well as section 29 of ACL in relation to false and misleading
representation.
4 Australian Consumer Law at section 18
5 Australian Consumer Law at section 48.

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The company had made Statesman that only 1% of the tickets are remaining to be
sold in order to create urgency among the consumers to purchase the tickets quickly when the
tickets would still be obtained from other sources selling the tickets. This was a form of bait
advertisement which is discussed in section 35 of the Australian consumer law6. According to
this section the sellers must not make an advertisement to increase the demand of the product
without having intention to provide them. The action can also be charged under Section 18(1)
of the ACL in relation to misleading and deceptive conduct as well as section 29(1)(i) related
to false and misleading representation regarding price7. Warning had been issued by the
consumer protection bodies of WA, NSW and Queensland to the consumers from purchasing
tickets from the website. A provided by the consumer protection body of WA people only
found out that they had purchased tickets for a reseller which they were not allowed to enter
into an event and had to repurchase the tickets or miss out the event.
In relation to the case made by the ACCC against the company it seeks injunctions,
declarations, corrective publication orders, pecuniary penalties along with compliance
programs and cost of legal proceedings.
The decision of the court in relation to this case can have various implications on the
Australian ticketing industry.
Relevant powers of the ACCC to ensure compliance with the ACL
The ACCC is the apex competition regulator and consumer protection agency in
Australia. It is an independent government authority created by the Australian Competition
and Consumer Act 2010 in relation to public interest. The aim of the regulator is to promote
fair trading by businesses along with providing protection to the consumers with respect to
the actions of businesses. Wide range of compliance tools are used by the regulator to prevent
6 Australian Consumer Law at section 35.
7 Australian Consumer Law at section 29.

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violation of the legislation including consumer and business education and working together
with the stakeholders. A range of enforcement remedies have also been provided by the
legislation to the ACCC which includes outcomes based on court decisions and undertakings
enforced by the courts. The Australian Consumer Law is applicable at the Commonwealth
level and is the national consumer law of Australia; it is also applicable in the states and
territories. Four flexible and integrated strategies are employed by the ACCC in order to
achieve compliance objective of the ACL. Firstly the ACCC enforces the law which includes
solving possible contraventions both in form of litigation and administrative manner.
Secondly it educates and inform consumers and businesses with respect to the responsibilities
and rights under the law in order to ensure compliance. Thirdly the regulator works closely
with agencies for the implementation of such strategies through coordinated approaches.
Finally market studies are undertaken by the ACCC in relation to emerging competition or
consumer issues for the purpose of analysing and determining any failure in relation to the
market and strategies to address them. Without the ACCC operating it would not be easy to
control the market
The ACCC have been able to derive various orders in its favour with respect to the
ACL. In the case of Singtel Optus Pty Ltd v Australian Competition and Consumer
Commission8 unlimited download plan had been offered by the defendant company for all
users who would use their services. The plan however has several limitations which included
reduction of speed after downloading a particular amount of data. It was provided by the
court in this case that the use of the word unlimited was misleading and deceptive. In the case
of TPG Internet Pty Ltd v Australian Competition and Consumer Commission9 the court had
imposed 2 million pecuniary penalties on the defendant for indulging in false and misleading
advertisement. The court found the use of word unlimited and misleading and deceptive.
8 [2012] FCAFC 20
9 (No 2) [2013] FCAFC 37

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Thus in the same way the ACCC has the power to impose penalties on Viagogo for adding
the word “official” on its website where it is merely reselling tickets. In relation to price also
the ACCC can obtain penalty against the Company. Penalties had been obtained by the
ACCC through the court for similar conduct by a company in the case of ACCC v AirAsia
Berhad Company10 In this case the court ordered a pecuniary penalty of $200000.
Recommendations
It has been provided by the case study that E-ticketing limited has a similar business
model in relation to Viagogo. If they continue to use the same business model they will bring
on the risk of being prosecuted by the ACCC. Firstly the company has to understand the
concept in relation to misleading and deceptive conduct as provided by section 18 of the
ACL. In order to operate in accordance to law the company has to ensure that the overall
impression which is created by the conduct on the company is false or inaccurate or not.
While the company does not have to provide information in all situations but under specific
situation all relevant information has to be provided to the consumers to ensure compliance of
section 18 of the ACL. This information includes any detail which may likely create a
misleading or deceptive impression on the consumer. The information should also be
disclosed where it is reasonably expected by the consumer that such information would be
provided. Thus if a resold ticket is not valid, the same should be informed to the consumer.
In addition making an advertisement through a search engine like Google should also
not be deceptive or misleading as provided in section 18 and section 29 of the Act.
In relation to pricing the business has to follow the guidelines as provided by section
48 of the Act. The price should therefore be all inclusive with no hidden fee to be added on
10 [2012] FCA 1413 (14 December 2012).

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latter while purchasing the product as it would be against section 29(1)(i) and 48(1)(a) and
(b) of the ACL.

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Bibliography
ACCC Takes Ticket Reseller Viagogo To Court (2017) Australian Competition and
Consumer Commission <https://www.accc.gov.au/media-release/accc-takes-ticket-reseller-
viagogo-to-court>.
ACCC Takes Viagogo To Federal Court After More Than 400 Complaints (2017) CHOICE
<https://www.choice.com.au/shopping/everyday-shopping/tickets/articles/accc-takes-
viagogo-to-federal-court-280817>.
ACCC v AirAsia Berhad Company [2012] FCA 1413 (14 December 2012).
Australian Competition and Consumer Protection Act 2010 (Cth) at Schedule 2
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC
20
TPG Internet Pty Ltd v Australian Competition and Consumer Commission (No 2) [2013]
FCAFC 37