The Australian Competition and Consumer Commission (ACCC) is taking online group buying website Scoopon to court for allegedly engaging in misleading and deceptive conduct.
The ACCC has issued proceedings against the company in the Federal Court for allegedly making false and misleading representations to both businesses and individuals.
It includes allegations by the ACCC that Scoopon told businesses 20 to 30 per cent of vouchers would not be redeemed when there was no "reasonable basis for this".
The ACCC alleges customers were also misled in their refund rights, the prices of advertised goods and services in some deals and customers' ability to redeem vouchers.
Scoopon also allegedly made misrepresentations to businesses about the risk involved and costs related to running deals on the website, when charges were required to be paid to Scoopon.
The ACCC said there have been a significant number of complaints about group buying websites since the websites started in 2010.
"The ACCC has worked closely with other [Australian Consumer Law] regulators to address issues and improve practices in the sector to reduce consumer and business detriment," Rod Sims, ACCC chairman, said in a statement.
"The ACCC has made online competition and consumer issues a compliance and enforcement priority. Ensuring that the digital revolution delivers competition benefits to consumers and small businesses is a focus for the ACCC."
"Businesses must have reasonable grounds when making representations to consumers and to other businesses. The ACCC is working to ensure that consumers making purchases online are not misled and that online traders take adequate steps to meet their obligations under the Australian Consumer Law."
The ACCC is seeking declarations, injunctions, community service orders, pecuniary penalties and costs from Scoopon.
"We will review the ACCC allegations made and work to resolve the issues raised," a spokesperson from Scoopon said.
The case has been filed in the Federal Court in Brisbane. It is due to be heard 25 July at 9.30am.
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