• CMI Legal

What is Group Buying and How are Consumers Protected?

Group buying is a relatively new concept in Australia which offers products and services at heavily discounted prices when purchased at a minimum quantity.

Group buying is advantageous to consumers and merchants, allowing the former to access massive discounts and the latter to maintain a competitive edge by reaching new markets and growing their businesses. Examples of group buying platforms in Australia include Catch of the Day, Shopping Square, Deals Direct and Crazy Sales.

Although there is no legislation that specifically governs group buying in Australia, issues relating to data-driven marketing and consumer privacy are managed by the Association for Data-Driven Marketing and Advertising (ADMA). ADMA has developed a Code of Practice which aims to set industry standards and benchmarks in relation to marketing, media and advertising, helping companies self-regulate through adherence to the Code.

The Code of Practice intends to achieve the above objective through ensuring that merchants abide by the following:

  1. Responsible collection, use and storage of data in compliance with regulatory provisions;

  2. Provide clear notification and explanation regarding the collection and use of personal information, hence allowing consumers to decide whether to share their personal information;

  3. Ensure that all personal information is collected and used fairly;

  4. Be clear and transparent regarding the purpose of collecting personal information, as well as all policies, costs and processes that affect consumers;

  5. Must not engage in misleading and deceptive conduct;

  6. Take reasonable steps to ensure the safety and security of personal information and inform consumers if the safety and security of their personal information is breached;

  7. Merchants are held accountable to ensure compliance with the Code.

If you are a consumer engaging in group buying, you should ensure the following to protect yourself:

  • Be aware of what goods and/or services are being offered and what is/not included in the offer;

  • Read the terms and conditions of an offer and any fine print provided on the group buying website;

  • Be aware of expiry dates on vouchers or blackout periods that may apply to certain services;

  • Check and ensure that you understand the refund policy.

If you encounter any issue relating to a group buy, an online deal or when engaging with a group buy merchant, you can make a complaint to the Australian Competition & Consumer Commission (ACCC).