It probably seemed like a great idea at the time; making sure only happy customers received the email inviting them to give Meriton a TripAdvisor review. But the ACCC and the Federal Court said - hmm not so much.

Meriton has been hit with a $3M penalty for false representations based on conduct with its TripAdvisor reviews.

So how did the Court get to $3M? It was a lot less than the $20 million that the ACCC asked for, but a lot more than the $330,000 to $440,000 that Meriton suggested.

For a company, the Court is limited to a maximum penalty of $1.1M per contravention. 'Per contravention' is the key part here, as the number of contraventions was hotly contested. The ACCC was arguing one contravention per email address masked, or group of emails withheld (in the thousands). Meriton argued it was one contravention for each of the two relevant sections breached. The judge ultimately found 13 contraventions, one for each property. This meant a maximum penalty of $14.3M.

Then the judge considered the nature and extent of breach, the fact that Meriton hadn't done it before, that the conduct was deliberate and involved senior management. There was no discount for co-operation. Mix that all up and out comes $3M.

That sounds like a sizeable flogging at first blush. But it's not. Meriton's gross revenue from the 13 properties over the relevant period was $242M. Seven figure fines aren't much of a deterrent if you have a nine or ten figure revenue line.

ACL penalties are a hot topic at the moment. A lot of folks (us included) reckon the $1.1M maximum is way too low. This case is just one of many examples showing why. There is legislation before Parliament at the moment to bring ACL penalties up, in line with penalties for anti-competitive conduct. The proposed maximum for companies would be the greater of $10M, or three times the benefit they obtained (which can be tricky to determine), or 10% of the annual turnover.

Couple an increased maximum with the Meriton case and other authorities on the number of contraventions, and we could start to see some serious penalties for misleading behavior. Bring it on.

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