Consumers who purchased goods from Kogan Technologies after seeing the organisation spruiked by Channel Sevens Today Tonight Show, may have a right of claim against the TV show after Kogan was recently slammed by the ACCC for misleading advertising.
Last week the Australian High Court upheld an appeal made by the Australian Competition and Consumer Commission who claimed that stories broadcast on Today Tonight, Channel Seven broadcasters engaged in misleading and deceptive conduct in contravention of section 52 of the Trade Practices Act 1974.
The High Court case was decided on whether Channel Seven was able to rely on a “publisher’s defence” in relation to stories broadcast on Today Tonight in late 2003 and early 2004 about a property investment training program known as ‘the Wildly Wealthy Women’ (WWW).
The ACCC had alleged that in these broadcasts, Channel Seven broadcasters and the WWW principals made misleading representations in that one of the WWW principals was a millionaire and the other owned in excess of 60 properties when this was not the case.
The original case was heard by Justice Bennett in the NSW Supreme Court – the same judge who ruled in favour of Ice TV.
Kogan Technologies was recently slammed by the ACCC for misleading advertising in that they constantly advertised products as heavily discounted when in fact they had never been sold or advertised at the higher amount that the discounts were based on.
Kogan Technologies sells Kogan brand home entertainment products including the Kevin 37 TV. It had significant publicity when Channel 7’s Today Tonight promoted it as a direct importer offering considerable savings by cutting out wholesalers.
“In light of the current decision consumers could have a right of claim against Kogan” said an ACCC official.
The ACC said that the majority of the High Court (4-1) held that in circumstances where the broadcaster had entered an arrangement or understanding with a third party and endorsed or adopted the misleading representations of that third party in its publication it was liable for any misrepresentations made.
The High Court ordered that the declarations relating to the Channel Seven licensees made by Justice Bennet be reinstated and that Channel Seven pay the ACCC’s costs of the Full Court and High court appeals.
“The ACCC welcomes the High Court decision,” ACCC Chairman, Mr Graeme Samuel, said today. “Where publishers enter into arrangements with others and adopt their representations they risk breaching the Act and like every business must check their facts.”
The area which was the subject of this appeal is the circumstance where the media organisation publishes misleading or deceptive material about goods or services which is not an advertisement but is nonetheless subject to some other arrangement or understanding between the media and the subject of the story.
The High Court appeal followed on from a decision in 2007 by Justice Bennett who found that Channel Seven had made misleading representations that one of the principals of the WWW mentoring program was a millionaire and the other owned in excess of 60 properties when in fact this was not the case. Justice Bennett also found that the Channel Seven broadcasters were unable to rely on s65A of the Act.
Justice Bennett held that Today Tonight “embraced and advanced the proposition that Ms Boholt and Ms Forster were millionaires and had achieved that status through investing in property” which was untrue and misleading and deceptive.”
Channel Seven appealed Justice Bennett’s decision. In June 2008 the Full Federal Court agreed that Justice Bennett was entitled to find that there was an arrangement or understanding between Today Tonight and the Wildly Wealthy Women and that representations were made by the Channel Seven broadcasters which were misleading. However, the Full Court did not agree with Justice Bennett’s construction of s65A and found that section did exempt Channel Seven’s conduct from s52.