Dell’s Australia arm has been slapped with a $10 million AUD (about $6.49 million) fine for “making false and misleading representations on its website about discount prices for add-on computer monitors,” the Australian Competition & Consumer Commission (ACCC) announced today. The Australian regulator said the company sold 5,300 monitors this way.
A for-profit company used a tactic to increase its profits. Shocking.
Honest question: Will the ACCC share the fine with customers that Dell ripped off?
No, but those users are probably free to launch a class action lawsuit themselves, and official government decisions make for good evidence.
The fine usually goes back into the operational expenses of trying to keep up with the flood of complaints about shitty companies the ACCC receives everyday.
Edited to add: IANAL and Dell have already been ordered to offer refunds in addition to the fine so a class action might not apply here. But it’s still something.
That’s good to know, actually. In the US, simply buying the product likely goes with an agreement not to participate in a class-action suit. Accepting the court-ordered refund definitely would.
They put that clause in our sales contracts too but I don’t it can be legally enforces.
I just double checked the class action thing, it looks like Dell has already been forced to offer refunds so a class action might not apply here, IANAL.
Either way, it’s something, even if it isn’t perfect.
@Madison_rogue I’ve heard there’s some debate over how much the refund should be for. The obvious complication is that, the actual price they paid matches what they expected to pay, the issue being that the list price was faked. I think the refund should take the advertised discount (60% off) and apply it to the real lost price, and refund them the difference. That makes the consumer whole, providing them the discount they were told they were receiving.
Then, the fine they receive on top of that should be double. Send a strong message that if you defraud consumers, it’s going to hurt. If all 5300 monitors cost the example price of $990, then the refund amount would be $600 each, for a total of 3.15 million in refunds and 6.3 million in fines. Sounds like this might be exactly what regulators had in mind since my number came pretty close to theirs. Dell is extremely fortunate they sold so few monitors. Because the advertised discount was so high, the fines alone appear to more than wipe out the revenue they made from these monitors, and whatever refunds they have to pay out on top of that puts them even further in the hole. Crime doesn’t always pay.
So… Pocket change then.
They were fined $1,900 per monitor they sold (at a price of $990) this way.
So the fine was double the price.
That does not sound like pocket change to me.
What do you think would be a reasonable fine?
They clearly meant the fine is such a small amount of money to the company that it won’t cause long term change in its practises.
They almost certainly will change their practices when it comes to this specific misrepresentation in Australia. Their ROI for this campaign would be in the negatives, and head office would not be happy with whatever department marketing lead ran this campaign.
Other countries will need to follow suit in providing decent consumer protections if we want to see wider-impacting change though. I would expect this tactic to still be used by Dell in other markets which do not have as robust false advertising legislation and enforcement.
What would be a reasonable fine to you?
Dell’s 2022 revenue was $102 billion. $6.5 million is 0.006% of their overall revenue.
To put in perspective, were I to make $75,000 annual income, 0.006% of that would be equivalent to $4.50.
EDIT
Math is hard, yo.
Cost of doing business…
The cost was $1,900 per monitor they sold…
