How misleading are your prices?

Regulators in Australia are getting more aggressive and the ACCC which monitors competition and also the way companies provide prices is no exception.

What I want to talk about today is 2 cases that the ACCC has recently taken on in the Federal Court. The first one – the case hasn’t been determined or held yet, is the ACCC taking on Kogan. Now what Kogan did is they increased their prices by 10% according to the ACCC and then they handed out promotional codes offering a 10% discount. And they said that you needed to hurry to use the promotional code before it expired, within say 48 hours.

Now the ACCC said that that was misleading because they were only offering with the discount the same price the customers could have got originally anyway and that they were then going to offer again going forward. So there was actually no rush. So they said that was misleading. That case is yet to go to court.

The other case that we have had recently is that the ACCC took on Trivago and was successful. Now Trivago claims that it can find you the cheapest price on hotels across different travel booking sites such as Booking.com and Expedia and Agoda and others for example.

Now, what they were doing was they were promoting a particular price in flashing lights and big numbers and letters which wasn’t necessarily the best price. They did show the best price on the screen, but they didn’t make it as obvious as the price that they were trying to promote. Why are they interested in promoting a higher price? Because they got paid a higher commission for doing so. What’s more, they didn’t disclose that the commission that they got affected the way they promoted one price over another price.

So all the ACCC is clearly saying across these 2 cases is it is really important that whenever you do promote particular prices it is OK to have promotions but the way you promote them and the way that you communicate them to your customers has to be really, really, clear and if there is any misleading behaviour whatsoever, they are going to take you on and the chances are if Trivago is anything to go by, that they’ll win.

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