An online florist has been fined $1 million for making misleading representations, after it passed itself off as a local business on websites and in online advertisements for three years.
Meg’s Flowers, which used a Brisbane call centre for orders and did not have physical florist stores, claimed it was a local florist located in each of the towns, suburbs or localities across Australia referred to in 156 websites and 7462 Google ads, between January 2019 and February 2022.
In the Federal Court decision delivered in Brisbane on Thursday, Acting Chief Justice Collier also ordered that Meg’s Flowers establish a compliance program, publish a corrective notice, and contribute $50,000 to the Australian Competition and Consumer Commission’s (ACCC) costs.
The florist admitted to engaging in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of Section 19 of the Australian Consumer Law (ACL); making false or misleading representations about the origin of goods, in contravention of Section 29(l)(k); and engaging in conduct likely to mislead the public as to the nature or characteristics of goods in contravention of Section 33.
It also admitted to breaching the laws by causing Google to publish advertisements which contained the misleading representations.
Examples of the websites it generated to secure orders included megsflowersauchenflower.com.au, megsflowersmaroubra.com.au, megsflowersseaford.com.au and mesgflowerstiwi.com.au.
The orders placed were fulfilled by one of 11 Meg’s Flowers premises or by sub-contractors.
Meg’s Flowers recorded revenue of more than $1.7 million for the 2021/22 financial year, while its parent company, the Flowerscorp Group, recorded a net profit after tax of $3,165,458 for that year.
Acting Chief Justice Collier said the fine amount included an appropriate discount to reflect the florist’s co-operation with the ACC.
“The proposed penalties are necessary and sufficient: (a) to remind other retailers of the importance of ensuring that advertising and communications with consumers do not contain misleading or false information; and (b) to send a clear message that advertising campaigns relating to the location of businesses must be accurate,” she said.
“The penalties are of a sufficient quantum having regard to the respondent and its parent company’s profits in the Relevant Period, such that the penalties would not be regarded as ‘an acceptable cost of doing business’.
“The penalties make proper allowance for the considerations that the respondent’s conduct did not result in direct financial loss to customers, that the respondent has cooperated in the proceedings, and that the respondent has agreed to injunctive and non-punitive orders to improve its compliance.”
The ACCC began proceedings against Meg’s Flowers in May 2023, after it issued a warning to online florists about making misleading representations that they were local florists or had a local presence.
“By making misleading claims about the location of the florists, Meg’s Flowers denied some consumers the opportunity to make an informed decision to support a local business, and likely denied truly local businesses the opportunity to make a sale to those consumers,” ACCC Commissioner Liza Carver said of Thursday’s judgment.
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