Compare the Market has incurred a penalty of $10,200 as a result of an infringement notice issues by the ACCC. The business made various representations on its comparator website regarding a comparison of insurance products, which the ACCC alleged were false or misleading. Senior Associate, Bill Fragos, discusses the advent of comparator websites and the ACCC’s complaint regarding Compare the Market.
It is self-evident that online shopping has become the norm for many Australians. With consumers becoming increasingly technologically savvy and a relatively high Australian dollar, there has been a continuing increase both in online shopping and online transactions for goods and services. Australian Bureau of Statistics figures (2013) show approximately $258 billion retail spending per year, of which approximately 9 percent is online.
Businesses have sought to address this demand and there has been a proliferation of online stores, many of which have shunned a bricks and mortar existence. With the opening up of greater competition online, a demand has developed for sites that pull together information from multiple sites - comparator websites. Such sites are prevalent in sectors including travel and accommodation, energy and insurance.
Comparator websites promote a comparison of pricing between competitors. These websites are often managed by a business in that market (as opposed to an independent organisation or government agency). Consumers rely on comparator websites for accuracy, and if the representations are inaccurate, then this could result in market distortion.
In its current priorities, the ACCC has indicated that it is concern whether comparator websites contain misleading or incomplete information, especially in relation to representations as to their comprehensiveness, price and terms and conditions
Compare the Market
Compare the Market (which has run a series of continuing and successful advertising campaigns featuring a meerkat with a Slavic accent) has incurred a penalty of $10,200 as a result of an infringement notice issued by the ACCC. The penalty relates to an allegedly false or misleading representation in its insurance advertising where it claimed “We now compare more health funds than any other website in Australia” and “Compare more health funds than anywhere else”. The advertising regarding the comparator website covered a two month period between March and May this year.
The ACCC alleged that this was an inaccurate representation. Indeed, at the relevant time, the Private Health Insurance Ombudsman’s website and a competitor website compared more health insurance funds than Compare the Market.
Compare the Market has also withdrawn the relevant advertising.
This matter is a timely reminder to businesses to be careful with respect to their advertising, in particular online. If you are a business you should:
- Be careful of how you advertise and what you say online, including in personal social media profiles. Your competitors may be watching and may not hesitate to protect their brand and enforce their rights – we suggest that you obtain advice about campaigns before rollout.
- Make sure claims regarding your products are accurate and don’t mislead consumers. If you have online profiles and pages, make sure they are regularly updated, monitored and inappropriate posts are removed.
- Have clear and prominent disclaimers in your advertising especially with respect to fundamental issues – price, important terms and representations.
- Be careful with pricing information, how that is represented and additional costs that may be involved.
- Consider whether their advertising is accurate in all locations the representations are made – it may be, example, that you are advertising in a particular location but your goods or services are not readily available in that location.
- Implement appropriate compliance programmes and have advertising & social media policies.
No meerkats were harmed in the preparation of this article.