Overstock.com To Appeal Ruling In California Comparison Advertising Case

(RTTNews) - Overstock.com Inc. (OSTK) announced Monday that it will appeal the tentative ruling of a California trial court which prohibits the company from comparison price advertising unless done in conformity with new court-mandated practices which diverge widely from industry standards.

The court imposed a civil penalty on Overstock.com for each day it used price comparisons that were not in accordance with new practices the court outlined. From March 2006 to September 2008, the court imposed a penalty of $3,500 per day and from September 2008 through September 2013, $2,000 per day, amounting to $6.82 million in total. The court also allowed the People to apply for payment of such fees and costs as are allowed by law. The company said it will appeal both the injunction and the amount of the penalty.

The company noted that court did not order restitution, which is consistent with the company's contention that no harm was shown, and that the company is, in fact, an online low-price leader.

The firm stated that among other restrictions, the court's ruling would require more elaborate price comparison disclosures on individual product website pages, depending on the type of comparison made. Assuming that other retailers will have to follow the same rules as Overstock.com, traditional retail stores will have to make lengthy disclosures on paper price tags disclosing their methods of price comparisons. The ruling also could prohibit a retailer from using common reference terms like "compare," without going through a prohibitively difficult and often impossible validation process.

Overstock Chairman and CEO Dr. Patrick Byrne said, "We are the gold standard in retail price comparisons......and we have been for many years. We verify each comparison price we use, and thoroughly disclose the manner in which we do so. Judge Carvill's decision is a fine example of the principle, 'No good deed goes unpunished."