Oscar Wylee penalised $3.5 million for misleading consumers about charitable donations

In a previous article, we discussed the ACCC’s action against eyewear company Oscar Wylee Pty Ltd (Oscar Wylee) for allegedly misleading consumers about its charitable donations and affiliations, in breach of the Australian Consumer Law (ACL).¹

The Federal Court has now ordered Oscar Wylee to pay $3.5 million in penalties for contraventions of the ACL.² The orders followed Oscar Wylee admitting liability and making joint submissions with the ACCC consenting to the orders sought.

The relevant misleading or deceptive conduct included marketing claims such as ‘buy a pair, give a pair’ as well as other statements which falsely overstated the charitable affiliations that Oscar Wylee held.³

Pair for Pair Representation

Between at least 13 January 2014 and 31 December 2018, Oscar Wylee made statements to the effect that for each pair of glasses a consumer purchased it would donate another pair of glasses to someone in need (Pair for Pair Representation) and that it would make such donations at or around the time of the purchase. However, in that period, Oscar Wylee sold 328,010 pairs of glasses and donated only 3,181 pairs of glasses.

The Federal Court declared that in respect of the Pair for Pair Representation, Oscar Wylee:

1. Engaged in misleading or deceptive conduct, in contravention of s 18 of the ACL; and
2. Engaged in conduct that was liable to mislead the public as to the quantity of goods being donated, namely one pair for the customer and one pair to be donated, in contravention of s 33 of the ACL.⁴

Rose Charities Representation

Oscar Wylee also represented that it had a solid affiliation or partnership with Rose Charities (Rose Charities Representation). For example Oscar Wylee stated:⁵

• “We have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia”, (which appeared on the home page of the Oscar Wylee website between at least 15 January 2014 and 29 April 2015);
• “Oscar Wylee Eyewear works with established partners in developing nations around the world who are committed to making the biggest impact possible with the support we provide. Currently we have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia. See more at https://www.oscarwylee.com.au”, (which appeared on the I Care Video and was available for viewing on YouTube between June 2013 and January 2019); and
• “… he just needs some glasses so we, with a bit of help from Rose Cambodia, have made sure he has them”, (posted on Facebook between 20 March 2015 and at least 25 March 2019).

However, during the period between 13 January 2014 to 31 December 2018 Oscar Wylee allegedly only appeared to donate a total of $2,000 and 100 glasses frames to that charity. By representing that it had a close charitable association, the Federal Court declared that Oscar Wylee had:

3. Engaged in misleading or deceptive conduct, in contravention of s 18 of the ACL; and
4. Made false or misleading representations that it had an affiliation with Rose Charities, in contravention of s 29(1)(h) of the ACL.⁶

The $3.5million penalty ordered by the Federal Court was made up of:

1. $2,100,000 in respect of the contraventions of s 33 of the ACL (relating to the Pair for Pair Representation); and
2. $1,400,000 in respect of the contraventions of s 29(1)(h) of the ACL (relating to the Rose Charities Representation).

No pecuniary penalty was ordered by the court in respect of the contravention by Oscar Wylee of s18 of the ACL, as civil penalties do not apply to contraventions of s18 of the ACL.

Oscar Wylee was also ordered to publish information online explaining its breaches of the ACL, and pay a contribution to the ACCC’s costs.⁷

Interestingly, the claim filed by ACCC in 2019 had originally also asserted that Oscar Wylee’s Pair for a Pair Representation amounted to a false or misleading representation as to the benefits of its optometry and eyewear goods and services, in contravention of s 29(1)(g) of the ACL.⁸ However, this claim was not mentioned in the Federal Court’s findings on the Pair for Pair Representation. The Federal Court’s findings on this representation / conduct considered solely the contravention of sections 18 and 33 of the ACL.⁹

ACCC Deputy Chair Delia Rickard said that “Oscar Wylee promoted its charitable activities as a core reason why consumers should buy Oscar Wylee’s glasses”.¹⁰ In doing so Oscar Wylee falsely portrayed itself “as a socially-conscious company that made significant donations of glasses to people in need”.¹¹ Rickard described Oscar Wylee’s actions as “not true” and an unfair differentiation from other brands in the market.¹²

Rickard noted that not only did Oscar Wylee induce consumers and take advantage of their “charitable nature of goodwill”, it also “deprived disadvantaged people in need of the benefits it promised in its advertising” and “diminish[ed] consumer confidence to support other businesses that genuinely engage in philanthropic activities”.¹³

In her judgement, Justice Katzmann’s reprimanded Oscar Wylee for building a reputation, and profiting from, the contravening conduct which induced socially-conscious consumers to purchase its products. Justice Katzmann described the contravening conduct as a “betrayal of that promise”.¹⁴

Takeaways

Businesses must ensure that any claims they make (including in their on-line, video, social media and / or in-store marketing materials) that relate to philanthropic endeavours, donations or partnerships can be substantiated to avoid any claims that they have misled consumers in contravention of the ACL.¹⁵

This article was written by Teresa Torcasio, Partner, Ruth Trevenen-Williams, Solicitor and Rebecca Richards, Law Graduate.

¹ https://www.accc.gov.au/media-release/oscar-wylee-in-court-for-alleged-misleading-charity-donation-claims.
² Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340.
³ https://www.accc.gov.au/media-release/oscar-wylee-penalised-35m-for-%E2%80%98buy-a-pair-give-a-pair%E2%80%99-charity-claims#:~:text=Eyewear%20retailer%20Oscar%20Wylee%20has,breach%20of%20Australian%20Consumer%20Law.
⁴ Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340, [1].
⁵ Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340, [41].
⁶ Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340, [2].
⁷ https://www.accc.gov.au/media-release/oscar-wylee-penalised-35m-for-%E2%80%98buy-a-pair-give-a-pair%E2%80%99-charity-claims#:~:text=Eyewear%20retailer%20Oscar%20Wylee%20has,breach%20of%20Australian%20Consumer%20Law.
⁸ https://www.accc.gov.au/system/files/ACCC%20v%20Oscar%20Wylee%20Pty%20Ltd_%20Concise%20Statement.pdf, at 14.2
⁹ Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340, [4]-[5].
¹⁰ https://www.accc.gov.au/media-release/oscar-wylee-penalised-35m-for-%E2%80%98buy-a-pair-give-a-pair%E2%80%99-charity-claims#:~:text=Eyewear%20retailer%20Oscar%20Wylee%20has,breach%20of%20Australian%20Consumer%20Law.
¹¹ https://www.accc.gov.au/media-release/oscar-wylee-penalised-35m-for-%E2%80%98buy-a-pair-give-a-pair%E2%80%99-charity-claims#:~:text=Eyewear%20retailer%20Oscar%20Wylee%20has,breach%20of%20Australian%20Consumer%20Law.
¹² https://www.accc.gov.au/media-release/oscar-wylee-penalised-35m-for-%E2%80%98buy-a-pair-give-a-pair%E2%80%99-charity-claims#:~:text=Eyewear%20retailer%20Oscar%20Wylee%20has,breach%20of%20Australian%20Consumer%20Law.
¹³ https://www.accc.gov.au/media-release/oscar-wylee-penalised-35m-for-%E2%80%98buy-a-pair-give-a-pair%E2%80%99-charity-claims#:~:text=Eyewear%20retailer%20Oscar%20Wylee%20has,breach%20of%20Australian%20Consumer%20Law.
¹⁴ Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340, [76].
¹⁵ https://www.accc.gov.au/media-release/oscar-wylee-in-court-for-alleged-misleading-charity-donation-claims.