The Federal Court has ordered Kogan to pay a penalty of $350,000 for making false or misleading representations about a tax time sales promotion.
Most prices were raised by at least 10%, with the eTailer then slashing the prices soon after the sale had ended.
Kogan encouraged consumers to shop the sale and made statements to consumers in June 2018 on its website, via emails sent to over 10 million consumers, and by SMS messages to over 930,000 consumers.
The business then created a sense of urgency in the last hours of the sale, sending emails containing statements such as ‘48 hours left!’ and ‘Ends midnight tonight!'
ACCC chair Rod Sims said that many consumers were paying higher prices during the advertised 'sale' than they otherwise would have.
"In many cases, consumers who used the promotional code to purchase these products paid the same as, or more than, they would have paid before or after the promotion.
"Consumers were not receiving a genuine 10% discount as promised, and this affected high-value products such as Apple MacBooks, cameras and Samsung Galaxy mobile handsets," he said.
This is not the first time Kogan has been found to have raised the prices of products prior to a sale, paying $32,400 in penalties in 2016 for a Father's Day 2015 promotion on its eBay store which offered consumers a 20% discount following a price raise.
Handing down her judgement, Justice Davies said that this conduct can harm consumer confidence.
"Kogan’s contravening conduct must be viewed as serious, as misrepresentations about discounts offered on products not only harm purchasers acquiring such products on the basis that they are getting a genuine discount but also may impact on consumer confidence in discount promotions when legitimately made – that is, when products are being offered for sale with a genuine discount on price," she said.
"This decision sends a strong signal to businesses like Kogan, which regularly conduct online sales promotions, that they must not entice consumers to purchase products with a promise of discounts that are not genuine," Sims added.
In a statement released to the ASX, Kogan said that it is reviewing the ruling of the Federal Court.
"As previously announced, the profit derived by the Company from the promotion was immaterial, and the prior ruling will not have any impact on the Company's ongoing promotional activities, which were updated in 2018.
"Kogan has a compliance program in place, which comprises protocols for the internal and external review of promotional statements and associated collateral.
"In its Judgement, the Federal Court noted that, "... Kogan did not deliberately intend to engage in the contravening conduct and the material does not indicate a culture of non-compliance or disregard of the law."
"The Company is currently reviewing the ruling of the Federal Court and may provide a further update once its review is complete.
"At all times, the Company has been focussed on making the most in-demand products and services more affordable and accessible," the business said.
The Court also made declarations and ordered Kogan to pay the ACCC’s costs of the proceedings.
Kogan set aside $0.7 million for the potential penalty and costs in its FY20 accounts.