The ACCC has commenced proceedings against Kogan Australia, claiming the e-commerce giant raised the prices of over 600 items immediately before running its 10% off ‘TAXTIME’ promotion.
“We allege that Kogan’s advertisements were likely to have caused consumers to think they were getting products below their usual prices,” asserts ACCC Commissioner, Sarah Court.
“In fact, Kogan had inflated product prices which we say created a false impression of the effective discount.”
The ACCC is instituting proceedings against Kogan in the Federal Court, and is seeking injunctions, declarations, corrective notices and costs.
Disclosed in an ASX statement, the e-commerce giant “strongly denies the allegations”, and will seek to defend itself in court.
“The proceedings commenced by the ACCC ignore critical facts and matters which are in Kogan.com’s view highly relevant in assessing the overall impression of the promotion by consumers who are intimately familiar with online retailing and how a discount code functions,” claims the e-tailer.
The online promotion is said to have run between June 27 – June 30 2018, and offered consumers a 10% discount on most products using the code ‘TAXTIME.’
In most cases, the ACCC claims Kogan raised prices by at least 10%.
The news follows similar actions against Kogan entities in 2016 and 2009 over misleading pricing conduct too.
The consumer watchdog asserts Kogan Australia has made “false or misleading representations” about the discount – which breached ACL – and was advertised on its website, emails and texts.
Towards the end of the promotion, Kogan’s emails ads informed customers of time sensitivity offers (e.g. “48 hours left!”, “Ends midnight tonight!”), which the ACCC contests.
The regulator claims Kogan reduced the price of affected products shortly after the promo ended – many back to their pre-promotional prices.
“Businesses must not make claims to consumers about discounts or sales unless they are offering genuine savings,” remarks Ms Court.
The ASX-listed entity boasts over 1.4 million active customers, and recently post a first-half net profit [after tax] of $7.4 million.
Shares in Kogan.com have dived over 3% following the news.
Further information is available in the ACCC v Kogan Australia Pty Ltd Concise Statement here.
