By Aimee Chanthadavong

The Australian Competition and Consumer Commission is taking online group buying site Scoopon to the Federal Court.

The ACCC alleges Scoopon engaged in misleading and deceptive conduct and made false and misleading representations to businesses and consumers. It is believed Scoopon misled consumers regarding their ability to redeem vouchers, their refund rights, and the price of goods advertised in relation to some of its deals.

The ACCC also alleges that Scoopon represented to businesses that there was no cost or risk involved in running a deal with Scoopon, when a fee was payable to Scoopon.

Further, it is alleged that Scoopon misled businesses by claiming that between 20 per cent and 30 per cent of vouchers would not be redeemed when there was no reasonable basis for this representation.

The court proceeding comes after the ACCC and other Australian Consumer Law (ACL) regulators have received a significant number of complaints since the group buying industry emerged in Australia in 2010.

“The ACCC has made online competition and consumer issues a compliance and enforcement priority. Ensuring that the digital revolution delivers competition benefits to consumers and small businesses is a focus for the ACCC,” ACCC chairman Rod Sims said.

“Businesses must have reasonable grounds when making representations to consumers and to other businesses. The ACCC is working to ensure that consumers making purchases online are not misled and that online traders take adequate steps to meet their obligations under the Australian Consumer Law.”

The ACCC is seeking declarations, injunctions, community service orders, pecuniary penalties and costs.

According to Scoopon spokesperson, the company will review the ACCC allegations made and work to resolve the issues raised.

“At Scoopon, our number one goal is to connect happy customers with happy business owners so people can enjoy the best of what these businesses have on offer. As a pioneer of the ever-changing Group Buying industry we have come a long way from being a small business to being one of Australia’s largest Group Buying sites, serving over two million customers,” the spokesperson said.

“We have also recognised the need to continuously improve our deal selection and customer service policies.  Since we began, Scoopon has improved its processes for selecting and managing deals to improve our customer experience and is a founding signatory to the ADMA Code of Practice, which is aimed at increasing consumer confidence in dealing with Group Buying platforms.”

The matter has been filed in the Federal Court, Brisbane, and is listed for a scheduling conference on July 25, 2013.