Federal Court dismisses Viagogo

Lawsuit by Circus Knie against Viagogo

Viagogo (defendant and complainant) offered tickets for circus performances of Circus Knie (plaintiff and respondent) on its website. The website contained an overview of the next performances of Circus Knie, whereby Viagogo marked some of these events as “sold out”, although tickets for those performances were still available from Circus Knie itself.

Viagogo also incorporated some unfair practices in the ordering process. Among other things, the message “Only 43 tickets left” was displayed several times during the ordering process. When selecting seats, Viagogo then used seating categories that Circus Knie had not intended to use and used a seating plan that did not correspond to the actual seating plan of Circus Knie. The customer was thus able to select tickets that did not exist at all in terms of designation and location. After selecting a seat, the user was informed that he or she had, for example, only 9.5 or 6 minutes left to buy the tickets. After that, the user was shown a countdown. During the countdown, there were repeated notices or notes of the following type: “2 people have joined the queue”, “Please note that these tickets may no longer be available at this price if you cancel your purchase”, “There is a high demand for these tickets! If you do not wish to purchase them, release them for other buyers”, as well as a red bar that noted the areas that were supposedly already sold out.

The price was also not always clearly displayed. During the entire ordering process, the price was only visible in a column on the far left in small, light grey letters. To complete the ordering process, the user had to scroll down the page several times and click on the “Continue” field. As soon as the user scrolled down, however, the price was covered by notes. It was also written in small, light grey letters that the price was exclusive of handling fee (plus VAT) and booking fee (plus VAT). Even if the user had to select the delivery method, a “handling fee (plus VAT)” was mentioned, but this was immediately “covered” again when scrolling further. The amount of the “booking fee” was not mentioned, but the countdown remained. When the user then had to choose the payment method, a “ticket price” and a “handling fee (plus VAT)” were mentioned, but not a booking fee. If payment was made by credit card, the “booking fee (plus VAT)” and a “total price” were listed in addition to the “ticket price” and the “handling fee (plus VAT)”. The user was finally asked to confirm the payment details. The countdown also appeared on this final page. As the user had to scroll down the page to click on the “Confirm purchase” box, the individual price components and the total amount to be paid were “covered” again (cf. E. A.c.).

Circus Knie thereupon filed a lawsuit against Viagogo, relying in particular on the general clause in Art. 2 UCA and the special offence under Art. 3 para. 1 lit. b UCA. According to Art. 2 UCA, any conduct or business behaviour that is deceptive or otherwise contrary to the principle of good faith is unfair and unlawful if it affects the relationship between competitors or between suppliers and customers. Anyone who makes false or misleading statements about himself, his company, his business name, his goods, works or services, their prices, the quantity in stock, the type of sales event or about his business relationships acts unfairly according to Art. 3 para. 1 lit. b UCA (E. 3.2 ff.)

Labelled as “sold out”

The Federal Supreme Court supported the opinion of the Commercial Court according to which the average user understands the indication “sold out” to mean that tickets for that performance can no longer be purchased through conventional distribution channels. This was not least due to the fact that Viagogo itself advertises that tickets for officially sold-out events can still be purchased on its platform. However, the Federal Supreme Court left open under which reference point in Art. 3 para. 1 lit. b UCA the labelling as “sold out” should be subsumed. After all, this labelling was misleading in the sense of a discrepancy between the user’s subjective perception and reality (E. 3.4). Viagogo’s unfair practices contribute to users being pressured to quickly buy tickets that are not yet sold out without comparing prices (E. 5.2.3).

Inaccurate seating plan and seating categories

The Federal Supreme Court also confirmed the opinion of the lower court on the question of the unfairness of the incorrect seating plan and the different seat categorisation. This circumstance meant that Viagogo’s offers were not comparable to those of Zirkus Knie itself. On Viagogo, on the other hand, customers were sold tickets in the two cheapest price categories with a face value of CHF 76.00 (two times CHF 38.00) for CHF 325.77. The tickets were sold at a price of CHF 38.00 each. Viagogo thus misled customers about the seat category and the location of the seat (E. 6.1). Viagogo, for its part, did not dispute the error, but raised the question of how this was misleading.

According to the Federal Supreme Court, the unfairness results rather from the lack of comparability. By offering seat categories that do not exist in reality, potential customers are deprived of any possibility to compare the offers and to look for a cheaper option. Viagogo thus deliberately prevented market transparency and thus runs counter to a principle of unfair competition law, which also underlies Art. 3 para. 1 lit. b and i UCA (E. 6.3).

Unfair ordering process

Finally, the Federal Supreme Court did not deviate from the opinion of the lower court on the last point concerning the unfair design of the entire ordering process. The countdown that appears on the screen and the numerous notices suggest to the customer that there is a low offer with a high demand, without mentioning that these are exclusively available tickets on Viagogo (E. 7.1).

Viagogo argued before the Federal Supreme Court that the relevant legal question in this case was whether the ordering process was an aggressive sales method within the meaning of Art. 3 para. 1 lit. h UCA. Consequently, it tried to explain why its sales methods lacked aggressiveness. However, Viagogo failed to recognise that Art. 3 para. 1 lit. b and h UCA are linked to different conduct. Lit. h also covers situations in which a provider operates with inherently true and clear statements. However, this requires a psychological predicament. In contrast, lit. b does not require such a predicament, but rather a deception that leads to a misconception of the actual circumstances on the part of the potential contracting party (E. 7.4). Thus, the Federal Supreme Court also came to the conclusion that Viagogo’s website had a competition-related misleading potential and therefore violated the requirement of clarity under unfair competition law pursuant to Art. 2 and Art. 3 para. 1 lit. b UCA.

Furthermore, Viagogo claimed that the lower court implied that it was not legally compliant to display the total price only at the end of the ordering process. However, the Federal Supreme Court pointed out that the lower court explicitly stated that it was sufficient if the total price was mentioned at the end of the ordering process, provided that the user had sufficient time to study the price.

Viagogo then argued that the fact that the total price was hidden when scrolling did not constitute unfair conduct because the user himself scrolled down, which meant that the price overview remained under his control. The Federal Court did not accept this argument either, as Viagogo failed to recognise that, on the one hand, the total price was calculated in a complicated and unclear manner and, on the other hand, the user was put under considerable time pressure. The website thus distracts from the fact that the price was significantly increased in a final step and pressures the user to complete the order by means of time pressure (E. 7.5.3.).

Consequently, the countdown intensifies the pressure on the user with the aim of inducing him to conclude a contract that may be unfavourable. The unclear price information together with the pressure to make a decision ultimately constitutes a violation of the requirement of clarity enshrined in Art. 3 para. 1 lit. b UCA (E. 7.1).

Conclusion

The Federal Supreme Court thus dismissed Viagogo’s complaint on all three disputed points. The ruling makes it clear that caution is required when advertising with availability information and that availability on other channels must be taken into account.

However, it cannot be inferred from the ruling that detailed price information must now in principle only be listed at the end of an order process, as long as the user has sufficient time to complete the order. Such a statement can at most be attributed to the lower court. The few statements of the Federal Supreme Court on price information must always be seen in combination with the countdown. It then remains questionable how the use of countdowns in the ordering process alone would be judged by the Federal Supreme Court and whether this would influence customers’ freedom of choice as an aggressive sales method under Art. 3 para. 1 lit. h UCA.

Read the ruling of the Federal Supreme Court.