Misleading and deceptive conduct – misleading conduct in relation to services – false or misleading representations – unfair contract term – ss 9, 11, 13, 46I Fair Trading Act 1986

Commerce Commission v Viagogo AG [2019] NZCA 472 per Peters J.

In 2017, the Commerce Commission began investigations into online ticketing platform Viagogo AG, regarding complaints of potentially misleading and deceptive conduct under the New Zealand Fair Trading Act 1986 (FTA).

In 2019, the commission lost an interim injunction application that sought to prevent certain representations from being made on Viagogo’s website. The High Court found it had no jurisdiction to determine the application since Viagogo had not been formally served with the proceedings in Switzerland.

On appeal, the court was found to have erred since courts should not be deprived of enabling effective justice between parties simply because a defendant is to be served overseas or objects to the jurisdiction. Viagogo made changes to its website in 2019, resolving the interim position.

In the High Court’s most recent judgment, Justice Mary Peters determined the commission’s application for relief against Viagogo under the FTA.

Judgment

The first and most substantial question before the court was whether Viagogo, in conducting its business, had engaged in conduct that was most likely to mislead and whether it made false or misleading representations, breaching ss 9, 11 and/or 13 of the FTA.

There were five separate and successful causes of action under this question which are summarised as follows:

Inadequate disclosure of status as a resale platform

Viagogo was found to have not adequately disclosed that it was a reseller of tickets. The Viagogo website looked similar to those of approved ticket sellers and the banner describing the fact it was a “secondary” marketplace was not sufficiently prominent on the website.

Guaranteed tickets representations

The High Court determined that various guarantee statements made on the website were misleading and/or false. These included statements such as “We guarantee that you’ll get valid tickets in time for the event” and “Buy with confidence”.

Viagogo was unable to make such assertions since it had a limited ability to validate that the tickets sold were valid.

Scarcity representations

The High Court also found misleading representations were made about the scarcity of tickets available on Viagogo’s website. Viagogo would warn potential customers that tickets were “almost gone” or “likely to sell out soon” or that a certain number of people were viewing the same ticket they had selected.

The qualifications on these representations, while explained through information buttons, were not sufficient to overcome the misleading nature of the representations.

Price representations

The lack of disclosure around booking and delivery fee prices until just before payment, which usually amounted to a 30% cost increase, was found likely to mislead the public as to ticket purchase prices.

Official seller representations

The High Court found Viagogo misled customers into believing it was an official source of tickets through Google Ads, including wording such as “Viagogo Official Site”, “best seats” and “selling fast”.

The second question before the court, and the final of the six causes of action, was whether a term in Viagogo’s terms and conditions (T&Cs) was an unfair contract term as per s 46I of the FTA.

The term was a governing law clause which allowed proceedings to be brought only in Switzerland, in the courts of Geneva. This clause was found to create a significant imbalance in the parties’ rights and obligations under the contract.

Applicable principles: misleading and deceptive conduct – unfair contract terms – overall impression of the conduct – whether qualifying information is sufficiently prominent – tendency to lure consumers into error

Held: Viagogo was found guilty under ss 9, 11 and 13 of the FTA and for its unfair contract term. The court also ordered Viagogo to publish a corrective statement.

Note: Viagogo has appealed the decision.

Viagogo-Commerce-Commission-v-Viagogo-High-Court-Judgment-28-March-2024