Australia: Sales And Marketing Law – Australia Tricks Of The Trade Practices Act*

Last Updated: 13 June 2011
Article by Hayden Martin

[* On 1 January 2011, the Trade Practices Act 1974 (Cth) (TPA) was renamed the Competition and Consumer Act 2010 (Cth) (CCA). The CCA incorporates and applies the new Australian Consumer Law (ACL), which is found in Schedule 2 to the CCA. Various provisions from the TPA, including those referred to in this article, are now found in the CCA or the ACL. For simplicity, the provisions referred to in this article are identified by reference to the TPA, given that the cases discussed in this article considered those provisions when the TPA was in force. The footnotes to the article identify the corresponding provisions of the new CCA and ACL.]


Two decisions of the Federal Court of Australia provide recent examples of business conduct that may contravene provisions of the Trade Practices Act ("TPA") and highlight for businesses certain activities which should be avoided.

In Australian Competition and Consumer Commission v Black & White Cabs Pty Ltd [2010] FCA 1399, the respondent ("B&W Cabs") conceded that it had engaged in the practice of "third line forcing" in contravention of the TPA and consented to orders by the Court restraining further similar conduct for 5 years, requiring an internal Trade Practices compliance and education program and imposing a monetary penalty of $110,000.

In Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd [2010] FCA 423, the respondent ("Specsavers") was found to have engaged in conduct that was misleading or deceptive in contravention of the TPA in a television commercial that compared the price of its spectacles to those of the applicant ("OPSM"). OPSM claimed damages, which are yet to be assessed.

The B&W Cabs case

Section 47(1) of the TPA1 prohibits a corporation from engaging in certain conduct known as exclusive dealing2. Subsection 47(6) of the TPA3 provides, relevantly, that a corporation engages in the practice of exclusive dealing if it supplies, or offers to supply, goods or services on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services will acquire goods or services of a particular kind
or description directly or indirectly from another person not being a body corporate relatedto the corporation
. This conduct is commonly referred to as "third line forcing".

B&W Cabs provided network services (booking, dispatch and other services) to various operators of approximately 1,000 taxis and managed approximately 250 taxi licences that it provided for use by certain taxi operators. B&W Cabs had an agreement with Cabcharge Australia Ltd ("Cabcharge") in relation to the use of Cabcharge's payment system, which is a system provided by Cabcharge to taxis that allows drivers to process Cabcharge vouchers, credit and debit cards for the payment of customers' fares. Under the agreement, Cabcharge provided a merchant facility to B&W Cabs so that its operators and drivers could use the Cabcharge payment system in their taxis, and Cabcharge would pay B&W Cabs 2.5% of the taxi fares processed using the system. B&W Cabs and Cabcharge were unrelated companies.

For about 3 months from April 2009, B&W Cabs used a standard form contract to sign up taxi operators, part of which provided that "The Operator must use the approved electronic payment system (Cabcharge's payment system) exclusively during the term of this Agreement." The effect was that operators were obliged to acquire services from Cabcharge as a condition of entering into the contract with and receiving services from B&W Cabs.

This conduct was "third line forcing" under the TPA and accordingly, prohibited conduct. B&W Cabs contravened the TPA by, in effect, forcing operators which agreed to acquire services from B&W Cabs, to acquire Cabcharge's services also.

The facts of the case were not in dispute. B&W Cabs conceded that it contravened the TPA as described above. Further, the ACCC4 and B&W Cabs agreed on proposed declarations and orders to be made by the Court in light of the contravening conduct. The Court agreed that the proposed declarations and orders were appropriate, which included the following:

  • A declaration that B&W Cabs engaged in exclusive dealing in contravention of the TPA;
  • An order restraining B&W Cabs for a period of 5 years from engaging in similar conduct in relation to Cabcharge or any other unrelated third party;
  • An order requiring B&W Cabs to implement and maintain for 3 years, at its own expense, a Trade Practices Compliance and Education/Training Program for its directors, officers and senior managers;
  • A penalty of $110,000 for the contravening conduct5 and a payment of $10,000 towards the ACCC's costs of the proceedings.

The significant monetary penalty and other orders were imposed despite the Court noting mitigating factors in favour of B&W Cabs. The conduct occurred over a limited period; it only affected 14 of B&W Cabs' 400 operators and 24 of its 1,000 taxis; there was evidence that B&W Cabs did not intend to engage in third line forcing or did not actively enforce the "Cabcharge clause" because one operator was permitted by B&W Cabs on request to use a different EFTPOS terminal; and as soon as the ACCC informed B&W Cabs of complaints about its conduct, B&W Cabs revised its standard contract and informed the operators that the "Cabcharge clause" would not be enforced and would be removed from their contracts.

The Specsavers case

Section 52(1) of the TPA6 prohibits a corporation from, in trade or commerce, engaging in conduct that is misleading or deceptive or is likely to mislead or deceive.

Specsavers, a competitor of OPSM in the spectacles, contact lenses and sunglasses market, undertook advertising in February/March 2010, which included a television commercial in which comparisons were drawn between the prices of spectacles sold by OPSM and Specsavers. OPSM commenced proceedings against Specsavers alleging that the commercial was misleading and deceptive. The commercial no longer aired when the case was heard, but OPSM sought damages and orders to compel Specsavers to publish corrective advertising.

During the commercial the screen showed the OPSM logo above a pair of spectacles with the words "PAID OVER $480 on average" underneath. There was a disclaimer on the screen in smaller print to the effect that the information was based on certain research and excluded health fund rebates. Alongside the OPSM logo and words, the Specsavers logo appeared above a pair of spectacles with the words "PAID OVER $114 LESS on average" underneath. The corresponding words and numbers appeared in the same font in both phrases. There was also a voiceover which included the words "On average OPSM customers paid over $480 for their prescription glasses" and "at Specsavers our customers paid on average $114 less for their prescription glasses than OPSM customers".

OPSM argued that the commercial was misleading and deceptive in three respects:

  • As the majority of OPSM customers had private health insurance, they were entitled to various rebates when they purchased spectacles and accordingly, the $480 figure referred to in the commercial was not the amount that most customers would ever pay.
  • It suggested to a casual observer that OPSM customers paid over $480 for spectacles, but Specsavers customers paid over $114 for spectacles – in effect, that the word "LESS"went unnoticed in the Specsavers graphic so that the commercial suggested an average price difference for spectacles between OPSM and Specsavers of $366 rather than $114.
  • It suggested that the average price paid for a single pair of OPSM spectacles was $480, when in fact, the research obtained by Specsavers showed that the average amount of money spent by an OPSM customer on their most recent visit to an OPSM store (which may have included spectacles plus other products or services) was $480.

The Court cited with approval existing authority to the effect that the approach to be taken in considering whether a television commercial contravened section 52 of the TPA7 was to consider the manner in which the commercial would be understood by the casual but not overly attentive viewer viewing a free-to-air program with only a marginal interest in the advertisements shown between the segments of the program.

Applying that approach, the Court held that the commercial was not misleading in the first two respects contended by OPSM. As to the first issue, the Court said that a person viewing the commercial would think it dealt with the average price of spectacles, not the customer's out-of-pocket expense of buying spectacles after a health fund rebate. As to the second issue, the Court said that the graphic and voiceover in the commercial together put sufficient emphasis on the word "LESS" such that the commercial conveyed a price difference of $114, rather than a comparison between a payment of $480 and a payment of $114.

The Court held that the commercial clearly was misleading in the third respect contended by OPSM. The commercial suggested to the viewer that the average price paid for a pair of spectacles by an OPSM customer was $480, and that price was $114 more than the average price paid by a Specsavers customer ($366). However, the actual research obtained by Specsavers showed that the average prices paid respectively were $418 for OPSM and $205 for Specsavers. Accordingly, Specsavers contravened section 52 of the TPA.This was despite the research actually indicating that on average Specsavers was $213 cheaper than OPSM for a pair of spectacles, rather than the lower saving of $114 suggested in the commercial – the commercial was misleading to consumers and contravened section 52 of the TPA, even though its misleading character was partly to the detriment of the advertiser.

In a separate and subsequent judgment8, the Court declined to order Specsavers to undertake corrective advertising, essentially on the basis that the effect of the deception in the offending commercial was lost with the passage of time since the commercial had aired. There was about 1.5 months between the date the commercial last aired and the trial date. The case is still before the Court on the issue of the damages clamed by OPSM.


For advice in relation to trade practices issues and compliance with the relevant legislation, contact one of our Trade Practices Team being Laura Hartley, Martin O'Connor, Jamie Nettleton, Kristy Dixon, Hayden Martin or Simone Vrabac.

1 Now section 47(1) of the CCA.

2 The various types of conduct that amount to exclusive dealing are set out in subsections 47(2) - (9) of the TPA (now subsections 47(2) - (9) of the CCA).

3 Now section 47(6) of the CCA.

4 Australian Competition and Consumer Commission, Australia's competition regulator.

5 Under section 76 of the TPA (now section 76 of the CCA), the maximum penalty was the higher of $10 million, three times the total value of the benefit obtained and was reasonably attributable to the conduct and, where the benefit cannot be determined, 10% of the corporation's annual turnover during the 12 month period preceding the conduct.

6 Now section 18(1) of the ACL.

7 Now section 18 of the ACL.

8 Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd (No 2) [2010] FCA 644.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.