Viagogo: how New Zealand consumer law captures overseas online businesses

After a six-year legal battle, the New Zealand High Court has found viagogo, the Swiss-owned online ticketing platform, guilty of misleading and deceptive conduct under New Zealand’s Fair Trading Act 1986 (FTA).

The case has raised several important points relevant to international online businesses, including:

• how New Zealand consumer law applies to overseas businesses communicating with New Zealanders (regardless of where the business is incorporated or where it carries on business);
• the New Zealand Commerce Commission’s (the Commission) ability to seek injunctive relief against overseas entities, even while it is still trying to serve court proceedings; and
• the Court’s finding that the dispute resolution clause under viagogo’s Terms and Conditions (T&Cs) (which prescribed the exclusive jurisdiction of the courts of Geneva, Switzerland) was an unfair contract term that would not be enforced.

The FTA is one of New Zealand’s key consumer protection statutes. Amongst other things, it prevents traders engaging in misleading or deceptive conduct, and ensures consumers are given accurate information before buying goods or services. It also prohibits the inclusion and enforcement of unfair contract terms in standard form consumer and small trade contracts.

viagogo was found to have misled customers regarding its ticket guarantees, ticket prices and scarcity, and representations of being an official/authorised ticket seller rather than a ticket ‘resale’ business.

viagogo has appealed the judgment.

 

Lessons for international online businesses

The FTA’s reach

International businesses selling to New Zealand consumers can be held accountable under the FTA for harm caused to New Zealand customers. The FTA captures:

• conduct outside New Zealand by those carrying on business in New Zealand to the extent that the conduct relates to the supply of goods or services in New Zealand; and
• false and misleading conduct in New Zealand (including by way of communications from outside New Zealand to recipients in New Zealand), regardless of where the defendant is incorporated or where it carries on business.¹

Online businesses should give accurate and clear information about their products and services. The overall impression (dominant message) created by a website or advertisement matters. For instance, the Court found viagogo’s Google Ad of “Buy Now, viagogo Official Site” combined with the look and feel of the website and statements like “best seats” and “100% guarantee” created the impression of viagogo being an official, authorised source of tickets for particular events.

Interim injunctions can be granted even before the proceedings are formally served

When the Commission started its proceedings against viagogo, it sought an injunction to prevent viagogo making the representations while the claim was served and then determined. viagogo opposed the injunction claiming that the New Zealand courts do not have jurisdiction until the proceeding is served (which is a slow process for New Zealand proceedings against a Swiss entity). However, viagogo was unsuccessful, the Court of Appeal held that an injunction could be granted, and a interim position was reached between viagogo and the Commission.²

An exclusive jurisdiction clause can be an unfair contract term which will not be enforced

In this latest judgment, the High Court held that the clause providing for the exclusive jurisdiction of the courts of Geneva, Switzerland, was an unfair contract term. The Court explained that the clause gave rise to a significant imbalance in the parties’ rights and obligations, would cause detriment to the consumer if viagogo relied on it, and “would be a significant deterrent to a claim by any but the most determined, aggrieved, and resourceful consumer”.

 

Questions to consider for international online businesses selling to New Zealand consumers

• Does the website contain any potentially misleading representations as to the products or services being sold?
• Are all promises and/or assurances to customers on the website ie “tickets are 100% guaranteed”, qualified?
• Does the website publicise the scarcity of its products or services eg “selling out fast” or “only a few left”. If so, are customers sufficiently drawn to the qualification of these representations, and are they accurate?
• Does the website disclose fees and/or costs (eg delivery and booking fees) sufficiently early in the ordering/purchase process?
• Does the company portray itself as an official/authorised seller of a product/service when it is not?
• Does the company have a governing law clause that excludes a consumer’s ability to pursue proceedings in the consumer’s place of domicile?

If you would like help in understanding your obligations under New Zealand consumer law, please get in touch with DLA Piper’s litigation and consumer law experts.

 

Background of the case

The Commission began investigating consumer complaints regarding viagogo in 2017 and commenced civil proceedings in August 2018. In 2018, viagogo was ordered to amend its business conduct by a UK Court.

The Commission sought an interim injunction. While the New Zealand High Court refused to grant one, the Court of Appeal overturned that decision and the Commission and viagogo agreed interim changes to viagogo’s website in September 2019.

In April 2024, the Court issued its substantive judgment. The Commission was successful on all six of its causes of action: 

1. Inadequate disclosure of status as a resale platform

The Court found the level of disclosure of being a ticket ‘resale’ business was not adequate. The wording of “secondary marketplace” and the banner’s location, font size and lack of prominence on the website was not sufficient. The website was also found to present similarly to those of recognised agents.

2. Guaranteed tickets representations

The Court found that viagogo’s T&Cs, FAQs and website statements “All Tickets Are 100% Guaranteed”, “We guarantee that you’ll get valid tickets in time for the event”, “Buy with confidence” and “Enjoy the event” were misleading/false. viagogo was unable to give such an assurance since its T&Cs reserved itself the right to provide a refund. The Court also found viagogo had no access to authoritative sources to enable it to give a guarantee as to validity of receipt. viagogo also permitted sellers to sell that had high breakage rates.

3. Scarcity of tickets representations

Representations made between July 2016 and September 2019 included statements such as “only a few tickets left”, “likely to sell out soon”, “almost gone” and “last chance”. viagogo also advertised the number of people viewing tickets and/or the ticket the consumer selected.

The Court considered the unqualified nature of these statements. While statements were qualified to some extent through an information button, consumers were still required to hover over the “i” symbol to see the text. Any qualifications must be sufficiently drawn to the consumer and the HC was not satisfied that the “i” symbol met this requirement.

4. Price of tickets representations

The prices displayed for tickets did not include viagogo’s delivery and booking fees. Delivery and booking fees were not disclosed until before the payment method page. The combined fees generally increased the cost by approximately 30%.

The Court found the overall impression created was tickets could be purchased for the initial price. The qualifying information was not sufficiently prominent or proximate to nullify the risk that the consumer might be misled. Disclosing the fees late in the process meant viagogo was likely to mislead the public as to the characteristics and price of the services it offered, breaching ss 9, 11 and 13(g) of the FTA.

5. Official seller representations

viagogo’s Google Ads contained the words “Buy Now, viagogo Official Site”. The Court found the impression created was viagogo was an official or authorised source of tickets for a particular event. This was contributed to by other words in the advertisement such as “secure your seats”, “100% guarantee”, “book today”, “selling fast” and “best seats”.

6. Unfair contract term

viagogo’s T&Cs provided for any dispute to be governed by Swiss law and to be resolved by the courts of Geneva. The Court declared the term unfair under s 46I of the FTA. The Court determined that the exclusive jurisdiction of the courts of Geneva gave rise to a significant imbalance in the parties’ rights and obligations under the contract. This was enhanced by the fact that under the T&Cs, viagogo had an express right to pursue the consumer in both Geneva and the consumer’s place of domicile.

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¹Wing Hung Printing Company Ltd v Saito Offshore Pty Ltd (2010) NZCA 502 at (102-104) and Body Corporate Number DPS 91535 v 3A Composites GmbH (2023) NZCA 647 at (102).
²Commerce Commission v Viagogo AG (2019) NZCA 472 at (7-9).