Kogan’s courtroom battle heats up with call by Judge to “bang some heads together”
Friday, April 19, 2013/
The battle between online retailer Kogan and former Smart50 entrant ispONE has continued in the Victorian Supreme Court, with the telco accusing Kogan of false or misleading advertising.
The battle comes after Kogan successfully won an injunction against ispONE last week, accusing the telco of refusing to recharge some customers’ mobile services.
In the latest round of proceedings on Wednesday, ispONE accused Kogan of engaging in misleading and deceptive conduct by advertising the mobile plans as “unlimited”.
“We say that it is problems that Kogan Mobile has created for itself by representing to the public that its plans were in fact unlimited or only limited in certain specific ways when they are in fact far more limited that has created the current disputes,” ispONE’s counsel told the court.
ispONE says these services were not unlimited as users would be flagged if they used a certain amount of voice, text or data in a short period of time. As a result, ispONE argues Kogan has breached part of the companies’ wholesale agreement.
In response, counsel for Kogan, Norman O’Bryan, argued ispONE knew Kogan would be offering an unlimited plan and even referred to that plan, by name, on its own letterhead.
“So the service suspension policy itself confirms that the service is intended to be an unlimited service,” Kogan’s counsel said in court.
But counsel for ispONE said both companies were aware “there would be people who would have to be cut off” because they would be abusing the mobile plan.
Speaking with SmartCompany this morning, O’Bryan said Kogan “emphatically denies” it has engaged in any misleading or deceptive conduct.
“Both Kogan and ispONE have described aspects of the Kogan service or offering as unlimited, and entirely appropriately in Kogan’s view.”
Justice James Judd said he was troubled by the case, due to the “distraction it causes to business management’s time and effort”.
“That is the real cost to business and it seems to me, if I may be so bold, to be the kind of case that screams out for somebody to sit down and bang some heads together and say you have got to arrive at a solution to a very practical problem,” Justice Judd said.
The case was prompted by complaints from Kogan customers who found they could no longer recharge their services. This backlash was originally targeted at Kogan, which pointed to its acceptable use policy enforced by ispONE, which mandated users couldn’t use an excessive amount of data in a short period of time.
Kogan subsequently took the matter to the Supreme Court and won an injunction against ispONE, which stopped the company from blocking customer recharges.
Both parties are in mediation today, but a trial is set for April 29 if the outcome is unsuccessful.
Ruslan Kogan, owner and founder of Kogan, declined to comment to SmartCompany.