Online ticket reseller Viagogo has been ordered by Australia's Federal Court to pay a penalty of A$7 million ($7.1m) for breaching the Australian Consumer Law by making false or misleading representations when reselling tickets for live music and sports event.
The proceedings were bought by the Australian Competition and Consumer Commission, which includes one commissioner from NZ's Commerce Commission.
The Court found in 2019 that Viagogo made false or misleading representations to consumers that it was the "official" seller of tickets to particular events, that certain tickets were scarce, and that consumers could purchase tickets for a particular price when this was not the case because significant fees, such as a 27.6 per cent booking fee, were not disclosed until late in the booking process.
From 1 May 2017 to 26 June 2017, Viagogo's website attracted consumers by advertising a headline price which did not specify a total price for tickets. It also failed to adequately disclose to consumers that it was not a primary ticket seller.
Examples included a ticket for the Book of Mormon advertised at A$135 but which was sold for A$177.45 including booking and handling fees, as well as Ashes cricket tickets advertised at A$330.15, but sold for A$426.81 after fees were added.
In imposing the penalty of A$7m, 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 having been made on "an industrial scale".
ACCC Chair Rod Sims said: "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."
Viagogo spokesman Adam Le Lievre told the Herald, "This penalty decision relates to issues on our Australian website in mid-2017.
"Since that time, we have overhauled our platform – a process that included consultation with consumer protection regulators in a number of countries.
"We are carefully considering today's decision and for that reason we cannot provide further comment at this time."
NZ regulator pushes for full hearing
On this side of the Tasman, Viagogo made two key concessions to the Commerce Commission in March, conceding it fell under NZ jurisdiction and agreeing to make a number of changes to its website.
In return, the regulator dropped its bid for an interim injunction.
However, the ComCom continues to push for a full hearing.
The consumer watchdog still wants its day in court to seek justice for some 1198 people who complained to it before the website changes were made.
"The changes Viagogo has made to its website have largely addressed the interim injunction application filed by the Commission alleging that Viagogo was misrepresenting the price and availability of tickets, and the 'guarantees' attached to tickets," the Commission's general counsel Mary-Anne Borrowdale said.
And notwithstanding that Viagogo's changes were enough to head off the interim injunction hearing, the Commission is still recommending that consumers give Viagogo a swerve.
"We still urge ticket buyers to purchase from official ticket websites," Borrowdale said.
"Avoid clicking on the first internet search result you see for an event. Scroll down the page and find the official ticket outlet or, if you aren't sure, visit the artist's or organiser's website to find out who is the official ticket seller."
Many people who contacted the Herald to complain about Viagogo said they had not realised it was a second-hand or "scalping" site because of the way it was presented, and the fact it appeared at the top of Google results (with an ad) when they searched for tickets for a sports game or concert.
The Commerce Commission alleged in a statement of claim filed in November 2018 that Viagogo had made misleading statements about ticket scarcity (many who complained to the Herald had been unaware official channels still had tickets in stock, in some cases much more cheaply).
The regulator also alleged that Viagogo was not upfront about substantial fees, and that it made guarantees about the validity of tickets that it was not able to enforce.
The Commerce Commission also alleges that Viagogo's platform was used to sell tickets for the 2017 Irish and British Lions tour of New Zealand.
While "scalping" of tickets is not ordinarily illegal (although it is under review), the Major Events Management Act (2007) specifically rules out the resale of tickets in specific cases, including Lions tours.
In July last year, Google suspended Viagogo from its Ad Words platform worldwide, saying the US-founded, Swiss-incorporated company had breached its terms and conditions - which include ticket resellers clearly identifying themselves as such. Viagogo was reinstated by Google in November.
Stubhub - which has a common founder - filled the void on Google NZ during Viagogo's ban.
Covid hits hard
The same month, Viagogo said it was in negotiations to buy Stubhub in a $US4.05 billion deal - which was finally completed in February this year, but which is currently under investigation by a UK regulator amid reports that the Covid pandemic has hit ticket resellers hard amid sports event and concert cancellations.
Earlier, Viagogo managing director Cris Miller told the Herald his company wanted to work constructively with the Commerce Commission to resolve issues. He would not detail all changes to Viagogo's NZ website, but said they included an upfront estimate of all fees.
Miller denied complaints from Rugby NZ and Tennis NZ that the sale ticket had been sold multiple times on his company's platform. He said a seller would not get paid if that was proved after a complaint was initiated by a buyer. Viagogo would not have stayed in business for years if it has behaved as alleged by the ComCom, Miller said.
If February last year, the Commerce Commission's bid for an interim injunction hearing was thrown out on a technicality as Viagogo it had not been properly served (the Swiss-incorporated company argued it should be served in its home country).
The ComCom won an appeal in October, at which point March 6 was set as the date for the interim injunction hearing. A date for the full hearing has yet to be set.