In Australian Competition and Consumer Commission v Prouds Jewellers Pty Ltd [2008] FCA 75 the Federal Court held that 'Was/Now' discount advertising by Prouds Jewellers Pty Ltd was misleading in breach of the Trade Practices Act 1974.
The advertising of certain jewellery was in the form of price comparisons such as 'Was $199 / Now $99.50' and appeared in Prouds' February 2006 Summer of Love catalogue and its May 2006 Love You Mum catalogue. The case related to the 'Was/Now' price advertising of 17 items that appeared in both catalogues.
Justice Moore concluded that the 'Was/Now' advertising conveyed to consumers that the jewellery items had been offered for sale for a reasonable period immediately before the catalogue promotion at the 'Was' price. He also observed that: "The difference between those two ['Was/Now'] prices would be seen by the hypothetical consumer as the savings that would be achieved by him or her by purchasing an item during the sale period."
Justice Moore found that each of the 17 items had not in fact been offered at the 'Was' price in that period and concluded that the 'Was/Now' advertising of each of the items in both catalogues was misleading.
The contravening conduct of Prouds flows from the fact that goods offered for sale in the context of dual pricing, were not offered for sale at the "was" price in the period immediately before the sale. In my opinion there would be no contravention of the Act (and assuming continued use of the dual pricing promotion manifest in the two catalogues considered in this case) if the goods had been offered for sale at the "was" price for a period of two months preceding the sale period. While there can be no precision about the length of the anterior period, it must represent a period of substance in which the price the goods were offered for sale at the "was" price and, negotiated discounts aside, would have been purchased at that price. If the period was unduly short, then the publication of the "was" price in the context of dual pricing would remain misleading or deceptive.
Prouds consented to implementing a trade practices compliance program.
UPDATE December 2008: Appeal dismissed
