Digital advertising business, Multimedia International Services
Pty Ltd, trading as The Community Network, (TCN),
has been fined $230,000 and accepted court enforceable undertakings
for engaging in unconscionable and misleading conduct in its
dealings with small businesses throughout Australia.
TCN sells digital advertising which is presented on branded LCD
screens at sites such as fitness centres, newsagencies and shopping
In one instance, TCN refused to release a business from its
contract for advertising services when it was not providing those
services, and then pursued the debt. TCN also used a standard form
contract which included an automatic renewal term.
In this case, the ACCC was concerned that the automatic renewal
term was misleading to TCN's customers, but under new laws to
take effect in November this year, the ACCC could also argue this
term was an unfair term according to the unfair contract
provisions. From November, the unfair contracts regime will be
extended to include standard form contracts with small businesses.
See our previous article
Federal Government passes new laws extending unfair contract terms
protections to small business contracts. One of the terms
that the regime presumes is unfair (in the absence of evidence to
the contrary) is a term that permits a party to unilaterally renew
In the undertaking TCN provided it agreed that any automatic
renewal term would be drawn to the attention of any potential
advertiser, and any advertiser would have an option (without
penalty) not to renew automatically. It also agreed to allow the
advertiser to terminate the contract at certain stages, and that if
it was to change the site it displayed the advertising, TCN would
give the advertiser notice and the option of terminating the
contract without penalty.
As well as the $230,000 fine, and the undertakings, TCN also
agreed to implement consumer law training for its staff, and to
contribute to the ACCC's costs.
The case is a timely reminder for businesses to review the terms
of their contracts with small businesses and their conduct in
relation to such businesses, in the lead up to the change to the
laws in November when the ACCC will have increased scope to
prosecute in this space.
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