Telecommunications company iiNet last week became the first
publicly listed company to pay an infringement notice penalty
issued by the ACCC for an alleged contravention of the
Australian Consumer Law. The infringement notice, in the
amount of $102,000 was issued in response to iiNet's
advertising campaign for its Naked DSL service.
iiNet's advertisements were displayed on the rear side of
buses in metropolitan Sydney in February and March 2013 with the
tag line "Free yourself from phone line rental forever".
The advertisements prominently stated the monthly price of the
service of $59.95. The advertisements also displayed the total
minimum price of the service ($59.95 for each month for 24 months
plus a $79.95 connection fee amounting to a total price of
$1,518.75) but did so in substantially smaller print than the
$59.95 monthly fee and towards the bottom corner of the
advertisement (see pic below issued by the ACCC). In the ACCC's
view, the references to the total price did not satisfy the
requirements of a "prominent" display as required under
section 48 of the Australian Consumer Law and accordingly
issued the infringement notice.
The ACCC may issue an infringement notice where it has
reasonable grounds to believe that a person has contravened certain
consumer protection provisions, including the unfair practices
provisions found in Part 3-1 of the Australian Consumer
Law such as section 29 (false or misleading representations)
and section 48.
The case is a useful illustration of the ACCC's active
enforcement of its extensive powers under the Australian
Consumer Law. The ACCC has repeatedly made it clear that
misleading advertising and particularly the "full and honest
disclosure of prices" is a priority area, with telco and
airline companies being particularly closely scrutinised in recent
Penalties are calculated in accordance with section 134C of the
Australian Consumer Law, with $102,000 payable for a
listed corporation per offence. Similar conduct by an unlisted
corporation would attract an infringement notice of $10,200, whilst
a person who is not a corporation could be subject to an
infringement notice in the amount of $2,040. Whilst the ACCC cannot
force a person or business to pay an infringement notice penalty,
if the recipient chooses to do so, they are not, merely because of
the payment, to be regarded as having contravened the law.
Moreover, the ACCC cannot commence court proceedings in relation to
the alleged contravention if the infringement notice penalty is
The ACCC will use the infringement notice procedure only for
relatively minor contraventions of the Australian Consumer
Law. In more serious cases and where there has been
significant detriment arising from the alleged conduct, the ACCC is
still likely to pursue tougher enforcement options, including
Federal Court proceedings. The ACCC did so in another recent case
where it commenced proceedings against the former operator of Abel
Rent a Car in Brisbane regarding price information on its website
which stated a daily car hire rate of $35 per day without referring
to additional mandatory fees, including a $5 per day "vehicle
registration recovery fee" and a 7.5% "administration
fee". In her judgment handed down on 18 June 2013, Gordon J
found the advertising to be misleading and that the
misrepresentations were not sufficiently negated by the disclosure
of the additional fees on subsequent pages of the company's
website. Her Honour ordered payment of a pecuniary penalty in the
amount of $30,000.
Advertisers are reminded by the iiNet and Abel Rent a Car
Take care in the production of any advertising materials and to
ensure that they do not convey any false representations, including
in regard to price of goods or services;
Ensure that reference to the total minimum price of goods as
services is displayed equally as prominently as the display of any
references to components of the price, such as monthly rental
Consider the effect of any advertising on the consumer and be
aware that different forms of advertising (for example, a newspaper
advertisement which may be looked at carefully by a reader as
opposed to the back of a bus which passes the consumers' view
fleetingly) will be understood in different ways;
Seek immediate advice if contacted by the ACCC in relation to
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 issue of recording telephone calls was recently considered in the Federal Court in Furnari v Ziegert  FCA 1080.
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