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Budding problem – ACCC proceeding against ‘local’ florist

13 June 2023

#Competition & Consumer Law

Published by:

Kayla Plunkett

Budding problem – ACCC proceeding against ‘local’ florist

The Australian Competition and Consumer Commission (ACCC) recently instituted proceedings in the Federal Court against online floristry business Meg’s Flowers Pty Ltd (Meg’s Flowers) for allegedly breaching the Australian Consumer Law (ACL) by claiming it was a local florist.

Between 1 January 2019 and 10 February 2022, Meg’s Flowers published representations on its websites and in Google advertisements stating it was a local florist, located in a specific town, suburb or locality in Australia when that was not the case.

Relying on the consumer law protections in the ACL, being Schedule 2 to the Competition and Consumer Act 2010 (Cth), the ACCC alleges Meg’s Flowers:

  • engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 18 of the ACL
  • made false or misleading representation concerning the place of origin of goods in contravention of section 29(1)(k) of the ACL
  • engaged in conduct that was liable to mislead the public as to the nature or characteristics of goods, in contravention of section 33 of the ACL.

With the regulator announcing that it will prioritise consumer and fair trading issues relating to manipulative or deceptive advertising and marketing practices in the digital economy as part of its 2023-24 Compliance and Enforcement Policy and Priorities, all individuals and companies are encouraged to revise their obligations and review any promotional materials.

ACCC alleges “local” flowers do not smell as sweet

According to the ACCC, despite operating a predominantly warehouse-based flower delivery service without maintaining a local shopfront, Meg’s Flowers’ generated multiple locality-specific websites.

The regulator has alleged that Meg’s Flowers made statements on seven location-specific websites referring to Ashgrove, Caboolture, Ellenbrook, Lane Cove, Mawson Lakes, Sunbury and Tewantin. Each of these named websites included a combination of the following:

  • a reference to the relevant town, suburb or locality name in the domain name
  • the name of the relevant town, suburb or locality and a phone number with the area code of the state or territory the town, suburb or locality is located in at the top of the page
  • a photograph of a florist’s store with a scooter branded Meg’s Flowers
  • the heading, “[relevant town, suburb or locality] Florist”
  • geographical details about the relevant town, suburb or locality
  • the statement, “direct from […] our [relevant town, suburb or locality] florist”
  • the statement “the finest quality flowers in [relevant town, suburb or locality]”
  • the statement “It’s a local approach” (local approach element)
  • the statement “our fantastic local service” (local service element)
  • the copyright notice “© [Year] – Meg’s Flowers [relevant town, suburb or locality name]”.

Meg’s Flowers also published 149 other locality-specific websites which contained, but to a lesser extent, the statements outlined above.

Separately, the ACCC alleges that Meg’s Flowers used the Google advertising platform to generate advertisements that were displayed as search listings referring to the relevant town, suburb or locality. 

Meg’s Flowers caused 7,462 advertisements to be published for websites relating to 3,649 suburbs, towns or localities that displayed each of the following elements:

  • a website domain name, which referred to the town, suburb or locality
  • a headline, which was in the form “Meg’s Florist [relevant town, suburb or locality]” or “Meg’s [relevant town, suburb or locality]”
  • a reference to “Same Day Local Flower Delivery”.

Thereby, in the regulator’s view, Meg’s Flowers represented that its flowers originated from a florist located in the town, suburb or locality referred to in the advertisement. Orders placed with the florist were fulfilled by one of the 13 warehouses used by Meg’s Flowers and by subcontractors.

According to the ACCC, these representations were false, misleading, deceptive or likely to mislead or deceive, because the flowers ordered from Meg’s Flowers did not originate from a florist located in the town, suburb or locality referred to in the website or advertisement in which the representations were made.

As a result, the ACCC is claiming declarations, pecuniary penalties, compliance orders, corrective notices, and costs.

A budding problem for the flower industry

This proceeding is not the first time the ACCC has identified issues within the florist industry and has issued a warning to consumers about misleading representations by online order gatherers.

With consumers willing to pay premium prices at local florists in the hope they will get fresh flowers, a direct point of contact and reliable delivery, there are concerns that large businesses are either creating floral arrangements themselves in large distribution centres or outsourcing orders to local businesses after charging undisclosed commissions.

The regulator took subsequent enforcement action in December 2022, with United Florists Pty Ltd trading as Lily’s Florist and Elysium Marketing Pty Ltd, providing the ACCC with a court-enforceable undertaking in relation to misleading representations that Lily’s Florist was a local florist.

Following a separate ACCC investigation, Fig & Bloom Pty Ltd removed potentially misleading representations from 940 webpages that may have given the impression that it was a local business.

The ACCC has also instituted proceedings against online florist and gift retailer Bloomex for allegedly publishing misleading online star ratings and price representations.

It’s therefore a timely reminder for all individuals and businesses that they must be able to substantiate claims they make, including statements about where their business is based and the standard, quality, value, grade, composition, style or model of goods and services.

Any business unable to do so may be in breach of the ACL.

How can we help?
Our team can assist you in understanding your consumer law compliance obligations, managing the risks associated with digital advertising and ensuring the accuracy of any statements that may affect consumers’ decisions, particularly in the online digital environment.

If you have any questions regarding this case or compliance with the ACL, please get in touch with a member of our team below.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Kayla Plunkett

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