Kogan Gets Slap on The Hand By ACCC

Melbourne-based online retailer of CE agrees to modify advertising to comply with Trade Practices Act

Online retailer Kogan Technologies has modified its advertising after the Australian Competition and Consumer Commission (ACCC) raised concerns Kogan’s representations on its website and in the Herald Sun may mislead consumers about savings.

The company has had a rough run of it lately, with its Andriod phone been pulled from the market back in January even before it went on sale due to “interoperability issues”.
The company sells Kogan brand home entertainment products and says it offers saving because it cuts out wholesalers.

Kogan Technologies’ newspaper advertisement and website used price comparisons such as Now $X (Save Y%) and save over $X. The products had not been offered by Kogan Technologies at the higher price.  The savings were based on an estimated average price a consumer might pay for a product with similar specifications from another manufacturer.

The ACCC was concerned that this conduct may have contravened sections 52 and 53(e) of the Trade Practices Act 1974.

The ACCC was also concerned about the use of an estimated average price to calculate savings as it does not take into account other value-adding features that frequently accompany electrical goods, such as warranties and reputation (and in some cases, proprietary technology).

Kogan Technologies has provided the ACCC with court-enforceable undertakings that it will not advertise its goods at a discount unless that product has been advertised for sale or sold in reasonable quantities at the higher price for a reasonable amount of time before the representation; and not make representations regarding the savings which are available to purchasers of Kogan goods unless it clearly states the basis on which those savings are calculated, and
implement a trade practices law compliance program.

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