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Gadgets, News - Written by Nayantara Mallya, Chillibreeze on Monday, December 12, 2011 9:12 - 7 Comments
Harvey Norman fined $1.25m for false advertising
news The Federal Court in Brisbane has penalised retail giant Harvey Norman $1.25 million for misleading advertising, resulting from action by the Australian Competition and Consumer Commission (ACCC).
In her judgement, Justice Collier described Harvey Norman’s conduct as “seriously misleading and deceptive, on a significant and far-reaching scale.” The advertising involved promotion of the sale of 3D televisions in the ‘3D Finals Fever’ catalogue. The ACCC’s statement on the issue is available online here.
The catalogue gave the false impression that consumers in all the places where it was distributed could buy and use a 3D television to watch the 2010 AFL and NRL grand finals in 3D format. However, the catalogue was distributed across Australia, including in places where there was no 3D broadcast of the football grand finals.
In reality, the 3D broadcast was limited to metropolitan Brisbane, Sydney, Newcastle, Adelaide, Perth and Melbourne. The catalogue was distributed throughout Australia even after Harvey Norman realised that the 3D broadcast was limited. This means that the catalogue represented that the 3D televisions had benefits and uses they did not actually have.
The Court also found that Harvey Norman had made misleading representations between October 2008 and July 2011 regarding the existence of particular conditions in its catalogue and website advertising.
The published website content and the distributed catalogues both gave the evident impression that the advertised goods were generally available across Harvey Norman stores. Meanwhile conditions in fine print contradicted this notion: a provision in all catalogues stated that the offers in them were being made only by a single store in each State or Territory, even as a condition on the website stated that the offers published on the site were available only at one store in Australia.
Summing up the nature and extent of Harvey Norman’s conduct, Collier stated that the facts painted “a picture of an expensive, misleading and calculated campaign of sizable proportions, characterised by blatant and deliberate disregard of the truth, cynical strategies to capitalise on contemporary sporting events (in the case of the 3D Conduct) and the contemptuous manipulation of the expectations of ordinary consumers in respect of so-called “fine print” (in relation to the catalogues).”
Rod Sims, ACCC Chairman said that the conduct of Harvey Norman seemed to have been intended to reach as many Australian consumers across the country as possible, through various media including newspaper, internet and letterbox drop. “Retailers have a responsibility to ensure that accurate information is given to consumers about the uses and benefits of new and emerging technology, such as 3D television,” he asserted.
Sims stated that Harvey Norman had known the facts and should have got it right; the Court agreed with this statement. He continued, “A headline representation cannot be contradicted or turned on its head by fine print conditions or requiring consumers to navigate through terms and conditions to discover the truth. Fine print is not an antidote to misleading or deceptive conduct.”
Speaking about Harvey Norman’s compliance program, Collier said that the Court had inferred that this constituted another unfortunate example of a business paying mere lip service to a compliance policy. She suggested that the organisation’s compliance policy might perhaps be sadly inadequate.
Justice Collier of the Federal Court made the following orders: Restraining Harvey Norman from engaging in similar conduct for a period of three years; requiring it to publish corrective notices in regional and metropolitan newspapers and on the Harvey Norman website; and requiring it to pay a contribution towards the ACCC’s costs.
The ACCC said in its statement that Harvey Norman admitted that it had flouted the former Trade Practices Act 1974 and the Australian Consumer Law and agreed to the penalties and other orders sought from the Court. It does not appear as if the retailer has issued its own statement on the matter.
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