Dell Australia fined by regulators over ‘misleading’ device discount tactics

Dell has been fined more than $6.5 million by Australian regulators after it was found to have misled consumers on discounted hardware prices. 

The Australian Consumer and Competition Commission (ACCC) imposed a $10 million AUS fine on the tech giant for “making false and misleading representations” about discounted prices for add-on computer monitors. 

Dell Australia admitted that it has misled customers over prices available on monitors in ‘bundle’ packages alongside desktop, laptop, or notebook devices.

Add-on monitors were “often advertised with a higher ‘strikethrough’ price,” an investigation by the regulator found. These strikethrough prices were framed as a way for consumers to make significant savings on monitors if purchased alongside other computing products. 

However, these discounted prices were often overstated, with the regulator ruling that the monitors were not sold for discounted prices in many instances. 

Dell also conceded it misled customers about the discounted price of add-on monitors with statements such as “Total Savings”, “Includes x% off”, “Discounted Price”, and “Get the best price for popular accessories when purchased with this product”.

“In many cases, consumers paid more than if they had purchased the monitor as a standalone product,” the ACCC said in a statement. 

More than 5,300 monitors were sold to customers with overstated discounts between 2019 and 2021, the regulator found. 

ACCC Commissioner Liza Carver said the fine sends a “strong message” to businesses making false statements about prices and discount incentives. 

“We took this action against Dell Australia because consumers rely on accurate information about prices and discounts to make purchasing decisions,” she said. 

“It is important that businesses are careful when advertising discount pricing to ensure they do not mislead consumers about the savings on offer.” 

The ACCC fine follows a lengthy court case that began last year. In November, the regulator began proceedings against the Australian subsidiary which resulted in Dell conceding its tactics had misled consumers in June. 

In the wake of this, Australian federal courts ordered the firm to offer refunds and issue “corrective notices” to all customers affected by the practices. The tech giant was also ordered to conduct a review of its compliance program, the ACCC said. 

Artificial discounts are rife

While the practice of artificially inflating the reference price of a product is not a novel offense, specific cases are often scarcely noticed.

Amazon’s Prime Day discounts, for example, are among the most well-known for being less beneficial than they appear during the two-day e-commerce holiday Amazon kickstarted in 2015. 

The same goes for ‘Black Friday’ - consumer investigators at Which? Found that products discounted in both Prime Day and Black Friday sales could be found cheaper at other points in the year.

UK-based fashion company Boohoo recently settled a case in the US similar to Dell Australia’s. It was accused of manipulating reference prices so that discounts appeared more favorable.

 The class-action lawsuit was settled in May 2023 for $197 million without admission of liability. An estimated 9.4 million people are eligible for a payout.