The High Court has declared that the Swiss-based reseller, formerly known as viagogo AG, breached various sections of the Fair Trading Act 1986 (FTA) in the long-running case.1 It is a notable example of a global business being held to have breached New Zealand law, despite only having an online presence here.
Viagogo has appealed the judgment.
Background
Viagogo operates a global online platform or marketplace on which sellers offer tickets to live events taking place around the world. Viagogo was incorporated in Switzerland in 2012, and its ultimate parent company is StubHub Holdings Inc, a company incorporated in the United States.
Viagogo does not have a physical presence, nor any employees in New Zealand.
In 2018, the Commission launched proceedings against Viagogo, following an investigation into their online sales tactics. According to the Commission, “Viagogo was one of the… most complained about traders, as many Kiwi consumers were unknowingly buying tickets that were not valid for admission”.
Issues
Six causes of action in total were brought by the Commission against Viagogo – all of which were ultimately successful in part.
The most substantial part of the Commission’s case against Viagogo is that, in conducting its business, Viagogo engages, or has engaged, in conduct that is likely to mislead and that it has also made false or misleading representations, all in breach of sections 9, 11, and/or 13 of the FTA.
The representations at issue, were that:
- Viagogo did not disclose its status as a resale platform adequately;
- Viagogo’s ticket guarantee representations were inaccurate;
- Viagogo’s representations as to scarcity of tickets (i.e. the demand for its tickets and events, and therefore the urgency with which consumers needed to act) were not sufficiently qualified;
- Viagogo only disclosed additional ticket fees at a late stage of the purchase process; and
- Viagogo made representations that it was an official or authorised source of tickets to events when this was not the case.
The second part of the Commission’s case was that clause 7.4 of Viagogo’s terms and conditions is an “unfair contract term” within the meaning of the FTA. Clause 7.4 provides:
“This Agreement shall be governed by and interpreted in accordance with the Swiss laws, with the exclusion of its conflict of laws rules and the provisions of the United Nations Convention on Contracts for the International Sale of Goods (CISG). All disputes arising out of or in connection with this Agreement, including disputes on conclusion, binding effect, amendment and termination, shall be resolved exclusively by the competent Courts of Geneva, Switzerland. We also have the option of taking legal action against You at Your domicile.”
Decision
After an extensive hearing in February and March 2023, Justice Peters issued her decision on 28 March 2024 (releasing it to the public this month), declaring that, Viagogo had, through the representations listed above, breached sections 9, 11, 13(e), 13(i) and 13(g) of the FTA.
Justice Peters however did not consider the entirety of clause 7.4 of Viagogo’s terms and conditions to be unfair, rejecting the Commission’s submission that the governing law component of clause 7.4 is unfair because it imposes a prohibitive layer of cost on a consumer, being the cost of taking legal advice on Swiss law.
Peters J did declare that the second and third sentences of clause 7.4 constituted an unfair contract term pursuant to section 46I of the FTA.
The reasoning for this was due to the lack of symmetry between the parties, namely that, “Viagogo may pursue the consumer in Geneva or the consumer’s place of domicile (say New Zealand). However, that same consumer may only pursue Viagogo in the courts of Geneva”.
A win for Kiwi consumers?
The success of the Commerce Commission in this case provides an important example for New Zealand of a global business being held to have breached our laws despite only having an online presence here.
Fair Trading General Manager, Vanessa Horne noted when speaking about the decision, that: “This case was about holding a global business to account for the harm they were causing in New Zealand and paving the way for individuals to have the ability to stand up for their consumer rights against international companies.”
“We took this case on behalf of every one of those Kiwi consumers and pursued this large global entity over more than eight years – and we now have a ruling that will require Viagogo to be upfront with Kiwi consumers about what they’re buying and ensure a fairer resolution system for settling disputes against Viagogo in the future.”
Both Australian and Italian regulators have also had legal success against the Viagogo in recent years. In 2022 the Full Federal Court of Australia dismissed an appeal by Viagogo against a 2019/2020 decision, which was decided in favour of the Australian Competition and Consumer Commission (ACCC).2 The Full Federal Court upheld the 2019 decision, which imposed an AU$7 million penalty – noting Viagogo’s misleading claims were made ‘on an industrial scale’.3
Whether or not this will truly be a ‘win’ for Kiwi consumers is likely to be determined by Viagogo’s appeal.
If you have any questions about the matters raised in this article, please get in touch with the contacts listed or your usual Bell Gully adviser.
[1] Commerce Commission v viagogo AG [2024] NZHC 713.[2] viagogo AG v Australian Competition and Consumer Commission [2022] FCAFC 87 (18 May 2022)[3] Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544; Australian Competition and Consumer Commission v viagogo AG (No 3) [2020] FCA 1423 (PJ).