Consumer Law Update – February 2019
The High Court yesterday dismissed the Commerce Commission's application for an interim injunction to prohibit Viagogo (a Switzerland-based ticket resale website) from making allegedly false representations on its website about the number of tickets available, the likelihood of tickets selling quickly and the validity of the tickets.1 Given the Commerce Commission received more complaints about Viagogo than any other trader in 2018, it considers the dismissal to be a loss for consumers and has issued a media release urging ticket buyers to purchase from official ticket websites.
The Commission's application for an injunction can be seen as "round one" in broader Commerce Commission court proceedings against Viagogo. The Commission claims that Viagogo made false or misleading representations that it was an "official" seller for events in New Zealand, that tickets were limited, that consumers would receive "valid" tickets for their event, and about the price of the tickets. The proceedings came about due to the large number of complaints to the Commission about Viagogo (more than 750 to date; making Viagogo the most complained about trader in 2018). A number of other international regulators in Europe and Australia are also taking similar actions against Viagogo.
Commission proceedings against an overseas-based online retailer were always going to give rise to interesting jurisdictional questions (see Consumer Law Update – A Year in Review 2018). This injunction application lived up to those expectations.
The Court decided it did not have jurisdiction because Viagogo has not been formally served in Switzerland (which would "apparently, take some six months"2). Justice Courtney said that before the Court would have jurisdiction to determine the injunction application the Commission must effect service, or if the matter is sufficiently urgent, substituted service on Viagogo:3 4
"A party is brought within the jurisdiction of the New Zealand courts by being served."
"…it is not right to say that merely because the conduct complained of is amenable to the jurisdiction of this Court, that necessarily brings a defendant, upon whom service has not yet been effected, within the jurisdiction of the Court."
This decision highlights the difficulties for the Commission in taking pre-emptive action against companies based overseas. Counsel for Viagogo indicated that once validly served, Viagogo would lodge a protest to the New Zealand Court's jurisdiction to determine the substantive proceedings too. So it will be a matter of watch this (cyber) space.
If you have any questions in relation to the above, please contact Joe Edwards, Troy Pilkington, or Sarah Keene.