Viagogo has misled the entertainment, music and sports event ticket-buying public with misleading internet marketing and hidden price extras for the tickets it sold, according to the Federal Court of Australia.
The decision is Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544 (Burley J) (18 April 2019).
Introduction
Viagogo AG (a Swiss company) operates an Australian website (www.viagogo.com.au) which it calls an online “marketplace” on which tickets for live events may be bought and sold. The seller sets the price and viagogo adds a booking fee of about 28% to the ticket price.
The Australian Competition and Consumer Commission (ACCC) the “national consumer law champion” as it describes itself, brought Federal Court proceedings against viagogo for breaches of the Australian Consumer Law (ACL). Acting on numerous consumer complaints, the ACCC alleged that viagogo misled the public by not making sufficiently clear it was a reseller, not an original ticket seller, it created a false impression of scarcity of available tickets and it delayed disclosing the booking fee it added to the price until the very end of the booking process.
In this article, we examine the four specific representations the Court found to be misleading. This is followed by a marketing analysis by Michael Field.
#1 Internet marketing: the Official Site Representation
Viagogo’s paid advertising on Google was effective: the viagogo site ad was the first result on Google when the phrases “Book of Mormon Sydney”, “Cat Stevens tickets”, “Australian Open tennis tickets” and the like were used for searches in May and June 2017.
The ad headline was: “[name of event] – Buy Now, viagogo Official Site”, followed by the URL and a number of short phrases, including “On Sale Today. Selling Fast. Secure Your Seats. Don’t Miss Out. Prices Rising.”
The ACCC alleged using the word “Official” was misleading and deceptive. Viagogo argued that it referred to its ‘ticket marketplace’.
Justice Burley concluded:
In my view the viagogo ad served to draw consumers into the marketing web by engendering the erroneous belief that the tickets sold were sold by the host rather than by a ticket reseller. In this regard I consider that by making the Official Site Representation viagogo has engaged in conduct in contravention of ss 18, 34 and 29(1)(h) of the ACL. (judgment, paragraph 142)
# 2 The website: the Quantity Representation
Throughout the booking process on the viagogo website, banners, pop-up windows and other references were made to the small number of tickets still available for purchase including “Less than 1% of tickets left for this event” or “Only 8 tickets left” and “Tickets for this event are selling fast”.
The ACCC alleged that the messages as to tickets available for the event on the Event Specific Page of the website were misleading as to availability and popularity of the tickets for the event or venue, and created a false sense of urgency to purchase. Viagogo argued that it made it clear in the General Notes that the messages referred only to the tickets available for resale on the viagogo website.
Justice Burley concluded:
I consider that … the ACCC has established that the quantity representations incorrectly convey to the ordinary consumer that the number of percentage of tickets still available is for the total available at the venue, and not only for those tickets available from viagogo (paragraph 152).
# 3 Price Transparency: The Total Price Representations
The booking process begins on the Event Specific Page where a list of events is displayed by date, beside which is a “View Tickets” button which takes the person to the Tickets and Seating Selection Page for the event. On “The Book of Mormon – Melbourne Tickets” page, a price of $A135 for 1 ticket in the grand circle was displayed with “+ Booking and VAT” below it in faint and fine print. The “Buy” button started the booking process.
A progress line then appears at the top of the screens which tracks the booking process through five stages of acquisition: quantity selection, your details, delivery, payment and review.
A countdown clock appears on the screens ticking down from 10 minutes, pulsing every 10 seconds.
The amount of the booking fee is not displayed until the Review Page (the last page).
Justice Burley concluded:
By selecting [the “Buy”] button, the consumer is brought further into not only the marketing web, but also the transactional web created by the website. Thereafter, the website urges the consumer onwards and is drawn further into it. (paragraph 171)
by making representations on the Tickets and Seating Selection Page of the viagogo website that a consumer could purchase tickets at the price stated when in fact he or she could not do so, because they had to pay additional fees [viagogo has contravened] s 18(1) and s 29(1)(i) of the ACL (paragraph 174)
# 4 Price Transparency: The Part Price Representations
The ACCC alleged that viagogo breached the single price provisions of the ACL which requires prices to be transparent. The ACCC alleged that viagogo deliberately withheld disclosure of the booking fee amount until the last screen in the booking process (in the Review Page), even though it had the necessary information and could have disclosed it earlier (in the Delivery Page). Viagogo argued that it was sufficient to disclose it at the end of the booking process.
Justice Burley concluded:
Section 48(1) ACL [requires that a person] specifies in a prominent way and as a single figure, the single price for the goods [or services].
In my view [viagogo] has not … specified a single figure in a prominent way. The apparent purpose of s 48 is to ensure that … a purchaser is appraised of the relevant information as to price and in a clear manner when the relevant information becomes available …
The consumer must complete the Payment Page, which involves entering credit or debit card details, and come to the Review Page before a single price is displayed [i.e. which includes the Booking Fee]. That does not satisfy the requirement that a single price be specified in a prominent way. [because it could have been displayed earlier, in the Delivery Page] (paragraph 188)
Comments
The lessons to be learned from Official Site and Quantity Representations are that misleading headline representations cannot be neutralised by using General Notes or Terms and Conditions.
The lessons to be learned from the Price Representations is that the Court does not approve the practice of delaying disclosure of the booking fee amount until the last screen because this conduct allows a consumer to be “progressively drawn into the transactional web” until they reach the point that they are unlikely to discontinue the process.
The ACCC did not target the hefty booking fee mark-up because state and territory governments have introduced consumer protections such as capping the resale price at no more than 10% of the original cost and event-specific and venue-specific restrictions.
The Court orders to be made and penalties payable will be determined at a separate hearing.
Marketing Comments by Michael Field, EvettField Partners
According to Roy Morgan research conducted in 2015, Australians spent $2.5 billion purchasing tickets online to live theatre, shows, films, concerts and sporting events.
Live Performance Australia’s Ticket Attendance and Revenue Survey 2016 reported that revenue has increased by 35% and attendance has grown by 19% since 2008 to 18.78 million tickets sold to live performance events, excluding sporting events.
The revenue and growth makes this an attractive sector for online marketers.
Viagogo’s marketing activity appears to be a text book consumer marketing strategy designed to exploit the psychological flaws in consumer buying and decision-making behaviour.
Consumer buying behaviour is driven by powerful emotions such as pride and prestige, status, exclusivity, trust and belonging. These emotions are heightened when purchasing luxury goods either as a personal indulgence, or as a gift for a friend, family or loved one.
In its website marketing, viagogo exploited these consumer buying motivations and decision-making triggers:
- Fear and scarcity – In this case, Viagogo activated the ‘Fear Of Missing Out’ (FOMO) by advertising the artificially limited ticket numbers, compounded by the pulsing clock and deadline creating a false sense of urgency and scarcity
- Trust / Authority – Viagigo’s claim of being an ‘official’ site catered to consumers need to purchase from a trusted and reliable source
- Belonging - A common driver for purchasing tickets to live shows and sporting events is the human need for belonging. This can mean wearing the team colours, chanting the club song or sharing stories with your friends from the mosh pit. The fear of missing out on this almost tribal bonding between peers means that logic goes out the window and people are prepared to pay exorbitant premiums in order to belong
- Sunk cost fallacy - The five stages of the buying cycle on the website are considered as an ‘investment in the purchase process or buy-in’. Once the price is revealed, even though it may be greater than expected, the consumer is likely to think ‘Oh well I have come this far!’
- Ego - Once the sunk cost fallacy has taken hold, and the hefty booking fee has been revealed, the ego kicks in as the purchaser does not want to be perceived as being stingy
- Guilt - Gift purchases, especially live shows such at the theatre, concerts are often driven by guilt arising by not spending enough time with partners, family and loved ones. A ticket to a live show fulfils the desire to create special and memorable events for the future
Viagogo and their marketing team would be almost certainly have been aware of these consumer buying triggers, and the impact of their marketing activity on the consumer buying and decision-making process.