With the change from Trade Practices Act to the
Competition and Consumer Act comes a new national regime
for consumer protection. To assist the ACCC in monitoring and
enforcing these new laws, the ACCC now has the ability to issue
infringement notices for suspected breaches of the Act and it
appears to be making good use of these powers. Notices have been
issued to businesses in a variety of industries on a variety of
issues including in respect of pricing, refunds, affiliations and
The ACCC can issue an infringement notice if the ACCC has
reasonable grounds to believe that a person or corporation has:
engaged in unconscionable conduct
engaged in unfair practices (though not for misleading or
engaged in pyramid selling
failed to comply with certain product safety and product
information requirements, or
failed to respond to (or properly respond to) a substantiation
If the ACCC forms this belief then it can issue a notice that
you pay up to $1,320 (individuals) and $6,600 (corporations). You
then have 28 days in which to pay the infringement.
If you pay the infringement, then the ACCC will not take the
matter further. However, if you fail to pay the notice then the
ACCC may commence proceedings.
A recent example of where this has taken place is where the ACCC
issued 8 infringement notices to 8 different restaurants for
failing to advertise a single price for their products. The
restaurants had used disclaimers at the bottom of their menus
stating that a surcharge applied on Sundays or public holidays, a
practice which in unlawful. Four of these restaurants paid the
notices and no further action was taken. Their financial exposure
was limited to the amount of the infringement notice, which could
not have been more than $6,600.
The other four restaurants did not pay the infringement notice
and the ACCC commenced proceedings against the restaurants. Each of
those 4 restaurants was found guilty and the court ordered that
they each pay a penalty of $13,200 (double the maximum amount
permissible under an infringement notice). Further, and perhaps
more significantly, each was ordered to pay the ACCC's costs.
Costs of legal proceedings can be very significant and will often
far exceed the cost of an infringement notice.
That said, paying the infringement notice may not always be the
right decision for your business. It is important to bear in mind
the public nature of the process and the potential damage to your
business's reputation, particularly given the ACCC only needs
to suspect a breach to issue a notice. Either way you should not
sit on a notice if received and should act quickly to get advice
and assistance in responding.
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.
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The Federal Court decision is likely to encourage the ACCC to maintain unconscionable conduct as an enforcement priority.
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