About flipping time. Parliament has spoken and the penalties for Australian Consumer Law (ACL) breaches are getting higher. Like, a lot higher.
The maximum penalty for companies used to be $1.1M. Now, it will be the highest of:
- three times the benefit the company received from its contravention (if the Court can calculate it); or
- 10% of the annual turnover (if the Court can't calculate the benefit).
The maximum penalty for individuals is also jumping from $220,000 to $500,000.
For big companies especially (supermarkets, telcos, airlines we're looking at you) this means megabucks. Scrooge McDuck's swimming pool full of money kind of megabucks. That's because these numbers are per contravention. In most prosecutions the judge finds multiple contraventions. Until now, that was the only way they could boost the penalty up over $1.1M.
We say bring it on. Big companies have been getting off lightly for too long. Under the old rules, it was too easy to just see this as a cost of doing business (particularly when the breaches were otherwise quite profitable). Case in point: Coles paying $10M for unconscionable conduct when its operating revenue that year was $37.4B.
So, when can penalties be awarded? Here are a few examples.
- Unconscionable conduct – like Coles bullying suppliers into paying Coles to supply their products – genius!
- False representations – like misrepresenting the availability of consumer guarantees.
- Misleading advertising – like bait advertising or dodgy comparative advertising, and in fact pretty much any kind of misleading advertising. You've been warned.
So, time to update that risk matrix and perhaps explain to the business that ACL compliance is actually now a thing. A big thing.
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