Ticket reseller Viagogo has been fined $7 million for misleading Australian consumers.
ACCC Chairm Rod Sims said Viagogo’s business practices were unacceptable.
“Today’s $7 million penalty sends a strong signal to businesses like Viagogo conducting business in Australia that they cannot get away with profiting from misleading Australian consumers about the price of the tickets they are selling,” he said in a statement.
However, does it really send a strong message Mr Sims?
This is nothing more than a parking ticket where the fine is cheaper than it would have costed to park your car in a car park. It makes no sense, and will incentivise everyone to keep parking illegally.
Scott Galloway, a marketing professor at N.Y.U. refers to the “algebra of deterrence,” by which he means a price and a punishment that makes certain you will not do a bad thing again.
$7 million dollars is not that price.
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In November last year, Viagogo announced its acquisition of StubHub for US$4.05 billion in cash. The fine the ACCC dished out represents approximately 0.001% of this purchase, it’s smaller than a rounding error.
Who the hell would even notice it at Viagogo?
The fine only emboldens Viagogo and other firms like them. $7 million may seem like real dollars to the ACCC and the Australian public – we feel like justice is being served – but Viagogo add it as a cheap “Cost of Sale” to their balance sheet and continue their efforts knowing that paying fines are more profitable than doing business ethically and legally.
What Needs to Happen
For this advice, I’m going to re-write the words of Scott Galloway when he addressed the same concerns over the recent Facebook fine issued by the FTC and apply them to Viagogo;
Just as traffic fines are doubled in construction zones, as irresponsible behaviour can have more dire outcomes, shouldn’t the same be true of fines levied against firms that engage in the exploitation of the Australian public and our hugely economically significant industry?
The ACCC needs to add a zero to this number and make it $70 million if they want to produce a change in behaviour. Although Viagogo’s revenues aren’t disclosed, Stubhub’s revenue alone (who they recently acquired) is $306 million.
At the end of the movie Vice, Christian Bale, portraying Vice President Cheney, turns to the camera and says, “You chose me. Well, I did … what you asked.” Haven’t we, vis-à-vis the markets and our regulatory bodies, asked Viagogo to “Don’t go changing”?