An Australian online florist has been fined $1 million after it claimed to be a local business in more than 150 suburbs when it was fulfilling all orders from one warehouse.

In proceedings brought by the Australian Competition and Consumer Commission (ACCC), the federal court this week ordered Meg’s Flowers to pay a $1 million penalty after it admitted to breaching Australian Consumer Law by making false or misleading representations.

This was in relation to the company claiming to be a local florist in each of the towns or suburbs referred to across 156 websites and in nearly 7,500 Google advertisements.

The company also marketed itself as offering a “fantastic local service”.

For example, if a customer searched for flowers in their suburb, Meg’s Flowers would appear as a result with a photo of a physical shopfront and banner stating they were a florist in this suburb.

Despite these representations, Meg’s Flowers is an entirely online company and doesn’t have any local shopfronts, with all customer orders fulfilled from a warehouse or by subcontractors.

“By making misleading claims about the location of the florists, Meg’s Flowers denied some consumers the opportunity to make an informed decision to support a local business, and likely denied truly local businesses the opportunity to make a sale to those customers,” ACCC Commissioner Liza Carver said in a statement.

“Making false or misleading representations to consumers is a breach of the Australian Consumer Law.

“We remind businesses in all industries that the claims they make about their products and services, including claims about the location of their business, must be accurate and not mislead consumers.”

Meg’s Flowers made admissions and agreed to make joint submissions to the federal court with the competition watchdog on the appropriate penalty and orders.

Along with the fine, Meg’s Flowers will also establish a compliance program, publish a corrective notice on its website, and contribute to the ACCC’s legal costs.

Crackdown on online florists

Meg’s Flowers, owned by Flowerscorp, is an online retailer that receives orders for flowers and other gifts via its location-based websites, or through a Brisbane-based call centre. These orders are then fulfilled at the company’s corporate warehouse or through independent florists acting as subcontractors.

In May last year, ACCC launched legal proceedings against the company for making false or misleading representations that it was a local florist.

The ACCC made 66 specific complaints about the business.

These included that when someone who lived in the Brisbane suburb of Ashgrove searched for flower delivery options, Meg’s Flowers would appear in the results with an image of a shop and a banner saying “Ashgrove florist”.

The search result would also read “finest quality flowers in Ashgrove” and a local Queensland number.

The ACCC claimed that Meg’s Flowers maintained similar websites for Sunbury in Victoria, Lane Cove in New South Wales and Ellenbrook in Western Australia, among others.

In September Meg’s Flowers admitted that it had misled customers into thinking they were ordering flowers from a local business.

A year earlier the competition watchdog put the sector on notice that it was going to target online florists that are claiming to be local.

A number of other businesses have also felt the wrath of the ACCC, with Lily’s Florist in late 2022 being hit with a similar penalty for making misleading representations about being a local florist.

Another company, Fig & Bloom, was also made to remove potentially misleading representations from 940 websites that could have given the impression that it was a local business operating from a specific suburb.

And earlier this year Bloomex was ordered to pay $1 million after it admitted to breaching Australian laws about making false and misleading online star ratings and price representations on its website.

The competition watchdog has found these misleading representations are prevalent in the online florist sector, in part due to consumers often specifically wanting to purchase from local businesses when it comes to flowers.