Aussie consumer watchdog is taking Dell to court over misleading discounts
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Despite earning some of the best laptops on the market, Dell has set a federal court date with Australian consumer watchdog ACCC, following allegations that the tech company’s Australian online store has “made false or misleading representations of regarding the price of monitors”.
In a pronunciation (opens in new tab), the ACCC claims that between August 2019 and December 2021, Dell sought to entice consumers to add monitors to a computer purchase “by displaying false or misleading discounts.” According to the watchdog’s alleged findings, the prices of monitors as add-ons were often more expensive than if the monitor were purchased separately.
Dell’s online store in Australia has scrapped the usual RRP, and the ACCC claims these crossed-out prices were often high to trick consumers into thinking the savings were greater than the reality. Deal markings such as “total savings” and “discount price” are among the features the consumer watchdog claims Dell Australia misled its customers into trying to encourage them to add a monitor to their computer purchase.
“Cases involving allegations of misleading ‘was/now’ prices by major consumer goods retailers are a priority for the ACCC,” said the watchdog’s commissioner, Liz Carver. “Businesses need to be well aware of their regulatory requirements and have effective compliance programs in place to prevent this type of consumer harm.”
The ACCC also added that the alleged misleading of consumers during periods of Covid lockdowns was of particular concern as parents of schoolchildren who were forced to learn at home increasingly sought out PCs and PC-related technology out of necessity and were therefore more vulnerable to being misled.
“While the total number of misled consumers is unknown, we believe many thousands of consumers sold an add-on monitor that was advertised as being over-discounted,” added Carver.
Will other countries catch up with Australia’s consumer rights crackdown?
Dell’s Australian Shop window may be the latest retailer to come into contact with the Australian consumer watchdog over alleged consumer deception, but it certainly isn’t the first. In August, Google ran into trouble when it was ordered by the Australian federal court to pay $60 million in fines after accusations (opens in new tab) of “Making misleading statements to consumers about the collection and use of their personal location data on Android phones between January 2017 and December 2018”.
Google’s sizable payout followed a similar finding against Samsung Australia in June, which was ordered to pay AU$14 million after the South Korean tech giant admitted to misleading consumers about the water resistance of some of its Samsung Galaxy smartphones.
And of course, in late October, Google’s smartwatch maker Fitbit was the one who attacked the Australian watchdog after allegations it misled consumers about their refund and replacement rights for Fitbit products.
The ACCC’s willingness to act on behalf of consumers’ rights and draw a line in attempts to mislead Aussies is a welcome service, especially as the cost of living continues to rise and purchases come at the expense of everyone’s budget.
The ACCC’s actions also serve as useful examples for countries like the US and UK, where the powers of the relevant consumer watchdogs are notorious (opens in new tab) less effective and not encouraged to act with commensurate force due to various bureaucracy barriers. As an example, the Federal Trade Commission (FTC) in the US the end of October (opens in new tab) announced plans to consider crack down on retailers who post false or misleading reviews or suppress negative consumer reviews. Posting fake reviews and suppressing negative reviews is already illegal in the US, but not much has happened. Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said, “We are investigating whether a rule imposing harsh civil penalties for violators would make the marketplace fairer to consumers and honest businesses.”
In our view, the conclusion to be drawn is that some retailers are openly willing to ignore existing rules and laws in efforts to mislead consumers and seemingly unafraid of facing real consequences. It is hoped that the lessons learned from the new crackdown in Australia will start to make their way abroad.
For retailers, the importance of transparency and fair practices in dealing with consumers is invaluable to consumers in the best times, but becomes even more important in times of financial crisis like today.