Lyoness has won a court case against the consumer watchdog, which accused the company of operating a pyramid scheme and engaging in referral selling. The Australian Competition and Consumer Commission initiated the proceedings against the Austrian company in August last year.
In his judgment in the Federal Court today, Justice Flick said there could be “no doubting the fact that inducements were held out to prospective members that they would ultimately receive financial benefits other than the discounts they received on purchases made from loyalty merchants”.
However, the court found that any entitlement was dependent not on the introduction of new members, but from those new members engaging in shopping activity. The ACCC also failed to establish that people could become members only by making down payments.
The court made similar findings about referral selling