Commerce Commission v Viagogo GmbH

[2024] NZHC 1666

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2659

[2024] NZHC 1666

BETWEEN

COMMERCE COMMISSION

Plaintiff

AND

VIAGOGO GMBH

Defendant

Hearing:	17 May 2024
Appearances:	N F Flanagan and E M McDowell for Plaintiff A J Lloyd and C M Hoeft for Defendant
Judgment:	21 June 2024

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 21 June 2024 at 4.30 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: ...................................

Solicitors:           Meredith Connell, Auckland

MinterEllisonRuddWatts, Auckland

COMMERCE COMMISSION v VIAGOGO GMBH [2024] NZHC 1666 [21 June 2024]

Introduction

[1]        This judgment addresses matters of relief that remained outstanding when I issued my substantive judgment on 28 March 2024 (“judgment”).1

[2]        Since then, and as I asked, counsel for the Commerce Commission (“Commission”) and for viagogo GmbH (“viagogo”) have communicated regarding the orders to be made, and counsel also appeared before me on 17 May 2024 to progress matters. Following that appearance, counsel have filed further memoranda, identifying matters which are agreed and those which are not. Counsel are content that I should determine the outstanding matters on the papers, which I now do. I add that both parties have appealed my judgment. Accordingly, to the extent I say they have “agreed” on a certain course, it is without prejudice to their position on appeal.

Audience

[3]I make the following order by consent:

The Court orders that viagogo is required to automatically and immediately redirect all persons using a New Zealand IP address who access any viagogo website to (if they are not already on that domain).

[4]        This order subsists pending further order of the Court or agreement between the parties.

Declaration

[5]        At [225] to [227] of my judgment, I said I would declare part of cl 7.4 of viagogo’s terms and conditions to be an unfair contract term in the sense of s 46I Fair Trading Act 1986 (“FTA”), with the precise form of the declaration remaining to be settled.

[6]        I am satisfied that the form of declaration the parties have suggested meets what is required, and I declare:

That the part of clause 7.4 of viagogo GmbH’s terms and conditions providing that “All disputes arising out of or in connection with this Agreement,

1      Commerce Commission v viagogo AG [2024] NZHC 713 at [229]–[231].

including disputes on conclusion, binding effect, amendment and termination, shall be resolved exclusively by the competent Courts of Geneva, Switzerland. We also have the option of taking legal action against You at Your domicile” is an unfair contract term under the Fair Trading Act 1986 in so far as it applies to any contracts formed by viagogo with consumers while viagogo is carrying on business in New Zealand on the domain statement

Language

[7]        At [230] and [231] of my judgment, I said I would order viagogo to publish a corrective statement, and I asked the parties to liaise as to the terms of the statement and as to whereabouts on the website it should be published.

[8]        The corrective statement is to ensure that consumers are informed that viagogo is a “resale” platform and also that viagogo does not guarantee that tickets purchased on its website will give the purchaser entry to the event. This information is required to correct an impression created by the website.

[9]        The parties are now agreed, as am I, that the corrective statement is to be in the following terms:

This is a ticket resale platform. Tickets are not sold by viagogo but by others. viagogo is not an authorised seller for events in New Zealand. viagogo cannot guarantee that tickets you purchase on this website will let you enter the event.

Additional wording

[10]      An issue has arisen between the parties as to whether viagogo may include additional wording at the end of the corrective statement if it sees fit, although it has not indicated in what terms or for what purpose. The Commission opposes this, anticipating that viagogo may add to the corrective statement in a way which undermines its content and purpose.

[11]      I ordered the statement so as to correct the effect of misleading representations previously made by viagogo. It is to be published in the form above, with no additions or variations.

Pop-up box on the Landing Page

[12]      The parties agree, and I order, that the statement is to be published in a pop-up box on the Landing Page. The Landing Page is the first page a consumer sees on arriving at the website. In the usual course of events it will be the Homepage or the Event Page, as to which see [18] of my judgment.

Fixed position on a page at the Checkout Stage

[13]      The parties also agree that the corrective statement is to be published in a fixed position on either the Payment Details Page, where consumers enter their credit card details, or the Review and Buy Page on which they confirm the purchase, with me to say which. These two pages are towards the end of the Checkout Stage.

[14]      The gist of the evidence of Professor Robert Slonim at trial was that the further the consumer advances in the purchasing process, the more committed that consumer becomes to completing the purchase. The Payment Details Page precedes the Review and Buy page, and also requires more of the consumer than simply clicking on a button. Given that, the statement should be displayed on the Payment Details Page.

Fixed position on the Event Page

[15]      The Commission seeks an order that the corrective statement also be published in a fixed position on the Event Page, even if the Event Page is the Landing Page. The effect of such an order would be to have the statement appear twice if the Event Page is the Landing Page, that is once in the pop-up box and once in a fixed position. The Commission attaches importance to the Event Page because it is where the consumer starts to search for tickets. The Commission submits consumers should have their attention drawn to the corrective statement before they do so.

[16]      viagogo submits that no purpose is served by providing for such publication. If the Landing Page is the Homepage, the pop-up box is sufficient, and if it is the Event Page, there is no point in displaying the statement twice. viagogo also submits that it would be punitive to make the order the Commission seeks.

[17]      I accept the Commission’s submission that the corrective statement should be published on the Event Page. That this will lead to a degree of repetition  if the  Event Page is also the Landing Page does not matter particularly, given the importance of the information in the statement. I note also that this degree of repetition is modest in comparison to the degree of repetition viagogo employed with its statements as to its guarantee and the scarcity of tickets.

[18]      I bear in mind also that, for reasons set out below, the consumer may not see the pop-up box every time they return to the Landing Page. Having the statement in  a fixed position on the Event Page is a useful backstop.

Format

[19]      The parties agree that the pop-up box containing the corrective statement on the Landing Page is to be positioned above the “cookies” pop-up box that the consumer must close before continuing on the website.

[20]      The parties also agree that the fixed corrective statement on the Payment Details Page should appear above the otherwise highest-positioned link that a consumer may interact with to continue the purchasing process. The fixed version to be published on the Event Page should also appear in this position. From hereon, what I say regarding the fixed version of the corrective statement applies to both the Payment Details Page and the Event Page.

Font

[21]      The parties disagree on the size of the font in which the corrective statement is to be published. viagogo has assisted by providing mock-ups of what it proposes. It also advises that whatever is published will be in bold type.

Font size for pop-up box

[22]      Taking into account the mock-ups, and having also referred to the Commission’s submissions, I am satisfied that the font size that viagogo proposes for the pop-up box on its mobile website is sufficient.

[23]      However, what viagogo proposes for the desktop version is too small to bring the message to the consumer’s attention. Given that, as the Commission submits, the corrective statement in the pop-up box on the desktop version is to be published in font that is at least 2.5 times larger than the largest font in the cookies box.

[24]      If viagogo is unable to use different text sizes on its desktop and mobile sites, then the font size for the desktop version is to prevail.

Font size for fixed statement

[25]      The font size viagogo proposes for the fixed statement on the mobile version of the Payment Details Page is sufficient but, again, it is not sufficient for the desktop version. The statement needs to be substantially larger than it is in the mock-up and, accordingly, I shall accept the Commission’s submission of a font 2.5 times larger than the largest font used in the cookie pop-up box.

Frequency of the pop-up box

[26]      The parties disagree as to the frequency with which the pop-up box should appear on the Landing Page.

[27]      viagogo submits that, as a consumer may return to the Landing Page more than once in a browsing session, it should only be necessary to display the pop-up box to the consumer once in every 24 hour period. Accordingly, and by way of example, a consumer who goes to the website at 9am will see the corrective statement in the pop- up box. They would not see that pop-up box if they return at, say, 2pm. They would next see the pop-up box at 9am the following day.

[28]      viagogo submits that this is sufficient to allay any concern about consumers who may share a device with others, or consumers who revisit the site several months later, when they may have forgotten the contents of the corrective statement.

[29]      The Commission accepts that it is unnecessary for the pop-up box to be displayed every time a consumer returns to the Landing Page, but submits the box should appear once every 30 minutes.

[30]      As it is conceivable that two or more consumers may use the same device, I consider the pop-up box needs to reappear more frequently than once every 24 hours. However, I do not think every 30 minutes is necessary. Every two hours is a reasonable compromise between the parties’ positions, and that is what I order.

Period of the order

[31]      I make the orders concerning the publication of the corrective statement for a 12-month period, subject to further order of the Court.

Injunction

[32]      The Commission sought injunctive relief in its second cause of action, pursuant to s 41 of the FTA. The second cause of action concerned viagogo’s statements as to its “guarantee” of tickets sold on the website, and was a significant part of the trial.

[33]      I ordered the relief the Commission sought but, again, asked for submissions regarding the terms of the injunction.

[34]The parties have agreed what follows:

Schedule C

(a)“All tickets are fully protected by our guarantee”;

(b)“All tickets are fully protected by our guarantee. Buy with confidence”;

(c)“All Tickets Are 100% Guaranteed”;

(d)“We guarantee that you’ll get valid tickets in time for the event”;

(e)“Buyers are guaranteed to receive valid tickets in time for the event. If a problem arises, viagogo will step in to provide comparable replacement tickets or a refund”;

(f)“You will be protected by our guarantee if you attempt entry and are refused. That’s our promise – enjoy the Event!”

Schedule D

This Court makes an order prohibiting the defendant from representing on viagogo.com/nz that the defendant may offer replacement tickets or refunds in respect of invalid event tickets, without also disclosing equally prominently

that this is contingent on consumers meeting certain conditions and that the defendant’s terms and conditions give it the right to choose between providing replacement tickets or a refund, at its sole discretion.

[35]      The Commission also wishes the order to prohibit viagogo from making “representations to substantially the same effect” as those listed in (a) to (f) above.

[36]      viagogo is opposed to this. viagogo submits that the addition is not sufficiently specific to form the basis of a prohibitive injunction; that the addition is unnecessary; and that, if it were to publish representations similar to the prohibited representations, it would be vulnerable to further action from the Commission. viagogo submits this possibility is a sufficient deterrent.

[37]      The Commission seeks the additional prohibition so as to guard against viagogo making similar representations, having made minor changes to the wording. The gist of the Commission’s submission is that viagogo cannot be relied upon to observe the spirit of the order and that experience has shown viagogo is willing to take a legalistic and technical view of its obligations. For instance, viagogo has changed its website only when required to do so by litigation and even then only in the relevant jurisdiction. The Commission does not wish to be in the position of having to restart the laborious process that has led to the injunction being ordered in the first place.

[38]      Finally, the Commission submits that it can be relied upon to make a fair assessment of whether a future representation is in breach of the order, and that viagogo may always engage with the Commission on any particular wording it wishes to use.

Order

[39]      viagogo is correct that there needs to be a degree of certainty about any order I make. It is only fair that viagogo is able to assess whether a statement it wishes to make would or would not be in breach.

[40]      However, I am not persuaded that viagogo, or the Court for that matter, would be in any real difficulty in making that assessment if the order prohibits representations to “substantially similar effect”. To the extent there is any genuine doubt in viagogo’s

mind, viagogo may wish to take up the Commission’s offer to communicate regarding the matter.

[41]      Given that I am satisfied the order could be complied with, there are compelling reasons to make the order in the terms Commission seeks.

[42]      First, as I have said, viagogo’s representations as to the guarantee were a significant part of the case. The representations listed in (a) to (f) were only ever pleaded as examples of the type of representation with which the Commission was concerned. The statement of claim did not suggest the list was exhaustive.

[43]      Also, in its prayer for relief in relation to the second cause of action, the Commission sought an injunction on terms then set out in Schedule 1 to the statement of claim. That schedule included the additional words the Commission now wishes the order to include.

[44]      Accordingly, what the Commission now seeks is within the scope of its pleading at trial.

[45]      The second reason is that, as I have said, viagogo’s representations to the effect that it guaranteed tickets sold on the website were valid have been the subject of much complaint, both to viagogo and to the Commission. It is no exaggeration to say that viagogo has received thousands of complaints on this issue, caused by (or said to have been caused by) rejection of the ticket at the entry gate. Not surprisingly, refusal has been a source of disappointment and also of financial loss.

[46]      It is for that reason the corrective statement to be published makes it clear that viagogo cannot guarantee that tickets purchased on the website will be valid for entry. Consistently with that, it is essential that representations to the effect that a ticket is “guaranteed” to be valid for entry and similar cease to be made. It is not difficult to think of variations on the wordings listed in (a) to (f) above which would convey the same, wrong, impression. This can only be avoided by adding the words the Commission proposes.

[47]      I accept the Commission’s submission that it should not have to police viagogo’s website, and then litigate if necessary. That, however, is secondary to the need to protect to the consumer at the point of purchase.

Formal order

[48]      The Commission submitted draft orders with its memorandum of 14 June 2024. I ask the Commission to amend the drafts to reflect the terms of this judgment. When that has been done, counsel should send the drafts to the case officer and viagogo. viagogo should then revert to the Court with any comments within 24 hours.

Timing

[49]      viagogo is to make such changes as are required to its website as soon as possible and, in any event, by no later than the period set out in the joint memorandum of 14 June 2024.

Peters J