Repeatedly misrepresenting the price of its add-on monitors will cost Dell Australia $10 million, after the Federal Court imposed the sizeable penalty on the company for “false and misleading representations” about the advertised price of computer and monitor bundles on its website.

Between August 2019 and December 2021, customers buying Dell computers were offered the opportunity to add one of 138 models of add-on monitors at claimed substantial discounts off the normal retail price.

The company emphasised the amount of those discounts by publishing the offered price next to ‘strikethrough prices’ – higher prices that were claimed to be the normal price of the monitors – and talking up the purported savings using phrases like ‘total savings’, ‘includes x% off’, ‘discounted price’, and ‘get the best price for popular accessories when purchased with this product’.

The problem with Dell’s marketing, the Federal Court ruled in June, is that the strikethrough prices weren’t actually the prices at which the monitors were sold before the discount was applied.

This meant that Dell was overstating the savings it was offering customers who could buy the monitors at lower prices elsewhere – including through other sections of Dell’s own website.

“In many cases, consumers paid more than if they had purchased the monitor as a standalone product,” the ACCC noted as the announcement of the penalty brought to a close the enforcement action that the competition regulator initiated in November 2022.

The misrepresentation occurred between August 2019 and December 2021, with overstated discounts tainting the sale of more than 5,300 monitors for over $2 million.

“Consumers rely on accurate information about prices and discounts to make purchasing decisions,” ACCC commissioner Liza Carver said, warning that “it is important that businesses are careful when advertising discount pricing to ensure they do not mislead consumers about the savings on offer.”

Dell Australia previously refunded or offered compensation to more than 4,250 affected customers, and was ordered to undergo an external audit of its processes for complying with Australian Consumer Law.

“As a general matter, price and discounts are an important consideration for consumers when purchasing electronic goods and can be a key differentiating factor between product offers,” Justice Jackman wrote in the June decision.

“Provision of accurate information concerning pricing and discounts is thus important for consumers to make an informed choice as to whether to make a purchase, and if so, which product to purchase.”

Federal Court baring its teeth

It’s not the first time the ACCC has tussled with Dell Australia over its pricing activities.

In 2002, the Federal Court ruled, and upheld on appeal, that Dell had engaged in deceptive or misleading conduct for more than seven years by failing to inform customers of mandatory shipping charges that applied when a computer was purchased from the delivery-only computer maker.

Dell also attracted the ire of the ACCC in 2010, after the regulator alleged that the company’s refund policies contravened Australia’s Trade Practices Act 1974.

The new penalty is the latest in a string of increasingly large penalties levied on tech companies found to be misrepresenting their pricing or policies to Australian consumers.

Last month, the Federal Court fined Meta $20 million for deceptive conduct related to its Onavo Protect VPN security tool, which was actively harvesting data about the app and Internet usage of the more than 270,000 devices to which it had been downloaded.

Earlier this year, online retailer Booktopia was fined $6 million for misrepresenting the circumstances under which it would offer refunds to its customers, while last December Uber was fined $21 million for falsely telling more than 2 million customers they would be charged a fee for cancelling their trips.

Now, by penalising Dell an average of $1,883 per misrepresented monitor – the total penalty is five times higher than the revenue Dell earned from its illegal marketing – the Federal Court is continuing its strong pro-consumer tradition by ensuring that Dell won’t retain any revenue from transactions where any consumer had a deceptive representation made to them.

“This outcome,” the ACCC’s Carver said, “sends a strong message to businesses that making false representations about prices or inflating discounts is a serious breach of consumer law and will attract substantial penalties.”