Kogan Technologies Pty Ltd - s.87B undertaking

Kogan Technologies Pty Ltd (Kogan) is an online retailer of Kogan branded home entertainment products through its website, www.kogan.com.au.

In November 2008, Kogan, through its website and an advertisement in the Herald Sun (Melbourne) made representations to the effect that various Kogan products were 'Now only $X (Save Y%)' and consumers could 'Save over $X' on several Kogan products.

The ACCC raised concerns that these savings were not genuine as Kogan had never previously advertised or sold these products at the higher non-sale price. Rather, the savings were based on an estimated average price that a consumer might pay for a product with the same specifications from one or more other non-identified manufacturers.

The ACCC was also concerned that price comparisons based on estimated prices could potentially be misleading particularly where the products are not exactly the same as such comparisons do not take into account other value-adding features.

Kogan has acknowledged that the representations are likely to be in contravention of sections 52 and 53(e) of the Trade Practices Act 1974 (the Act).

Kogan has provided the ACCC with a court enforceable undertaking that it will:

• not represent price comparisons without clearly identifying the brand and model of the good with which the price comparison is made;
• not offer or advertise any goods as being on sale, by reference to a price, unless those goods have been offered for sale or sold at the higher price in reasonable quantities for a reasonable amount of time within a reasonable period of the date of the offer or advertisement;
• ensure that all future advertising and other forms of promotion by Kogan complies with Part V of the Act; and
• implement a trade practices compliance program.