Viagogo has been ordered to pay A$7m (£3.9m/€4.3m/$5m) for breaching the Australian Consumer Law by making false or misleading representations when reselling tickets to live events.

In legal action brought forward by the Australian Competition and Consumer Commission (ACCC), the Federal Court found the controversial ticketing firm deceived consumers by claiming it was the ‘official’ seller of tickets and that certain tickets were scarce.

It also found the Switzerland-headquartered firm used drip pricing, which means it would add significant fees to the initial price, including a 27.6 per cent booking fee, that were not disclosed until late in the booking process.

The ACCC, which enforces the Australian Consumer Law which applies to tickets as well as other consumer goods and services, provided several examples where Viagogo would use drip pricing to ramp up the total cost of a ticket at the last minute of the booking process. Tickets to the Book of Mormon musical were advertised at A$135, but were actually sold for A$177.45, including booking and handling fees. Tickets to the Ashes cricket series were also advertised at A$330.15, but sold for A$426.81 after fees were added.

Viagogo’s responses were described by Justice Burley as giving it “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”.

In imposing the penalty of A$7m, the judge 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 and when they advertised tickets at a lower price by not including unavoidable fees.”

The court also observed the need for general and specific deterrence in this matter, particularly to make it clear to corporations which conduct internet-based operations in Australia that they are subject to the Australian Consumer Law (ACL).

Sims continues: “Today’s A$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.”

The Federal Court ordered an injunction against Viagogo, to reinforce the need for adherence to the ACL. The Court also ordered Viagogo to conduct a compliance program and pay the ACCC’s costs.

The ACCC took action against Viagogo in August 2017, and in April 2019 the court found Viagogo had misled consumers.

A Viagogo spokesperson told TheTicketingBusiness: “This penalty decision relates to issues on our Australian website in mid-2017.

“The matters considered in the proceeding covered a period of less than 8 weeks. Since that time, we have overhauled our platform – a process that included consultation with consumer protection regulators in a number of countries.

“Viagogo is committed to providing an important service to consumers that use our platform. We are carefully considering today’s decision and for that reason we cannot provide further comment at this time.”