ACCC puts comparison websites on notice

ACCC puts comparison websites on notice

 

Facilitating honest, like-for-like comparisons, being transparent about commercial relationships and clearly disclosing who and what is being compared are three of the major recommendations to come out of a new set of guidelines for businesses setting up comparator websites. 

The Australian Competition and Consumer Commission (ACCC) has released its latest set of guidelines for businesses to adhere to when setting up comparator websites.            

Comparator websites can be fraught with misleading information and the guidelines seek to show industry how to highlight comparisons with other businesses in a way that is fair and accurate to consumers.

The ACCC conducted a recent review of comparator websites after it found a number of websites included information that may mislead consumers as to the extent of the comparison service, the amount of savings that could be achieved and the impartiality of the comparisons.

ACCC deputy chair Delia Richard said in a statement that operators of such websites should carefully read this guidance and warned there would be “no excuse for non-compliance”.

“Comparator websites can drive competition and assist consumers to make informed purchasing decisions when comparing what are often quite complex products,” she said.

“However, the ACCC is concerned that poor conduct by some industry participants can mislead consumers.”

Ralph Bonig, special counsel of Finlaysons risk management team, told SmartCompany this morning that businesses setting up comparator websites sometimes found it difficult to make sure that products or services were compared “fairly to a comparable product”.

“That’s where the ACCC in the past has been successful in prosecuting organisations that have used comparator websites, because if you don’t properly reflect a true comparison, then you are guilty of misleading and deceptive conduct just as if you were publishing something about your own product that was wrong,” he says.

Bonig welcomes the ACCC’s efforts to give guidance to businesses that are seeking to provide comparisons, especially with the increasing online shopping trend.

“The ACCC is trying to give guidance to make sure when they are setting up comparators that they are firstly not biased or skewed and true comparators and that the consumer is getting the correct information, just as if they went out and independently researched each product or service” he says.

According to Bonig, the new ACCC guidelines should serve as an “eye-opener” for small businesses.

“I think they will help these businesses understand the complexity of area they are seeking to tread when their marketing their products,” he says.

Borig says that in the past small businesses likely found setting up comparator websites to be a bit of a minefield.

“Small businesses need to be careful that if they do want to market through comparator websites or comparator information that they have actually done the proper research and due diligence to make sure the material they are publishing is accurate,” he says.

“That is a costly exercise and involves more than just looking at straight price comparison.”

“You need to make sure you are comparing the same product or service and that involves sometimes some in-depth research, because there may be terms and conditions that your competitor has on their product or service that change its value.”

“For SMEs to understand all of that does involve in-depth research, which can sometimes be time consuming and costly.”

“But needs to be done if you are going to go down that path of comparator marketing because whether a small business or large multinational, the same penalties apply.”

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