This is the latest in a series detailing developments in competition and consumer law in Australia, including the activities of Australia's competition and consumer regulator, the Australian Competition and Consumer Commission (ACCC), published judgments, recently issued proceedings and any relevant changes in the law.
This article covers events which occurred between December 2021 and February 2022. The previous update is available here.
Training college ordered to pay $153 million in damages
The Federal Court has ordered the Australian Institute of Professional Education (AIPE) to pay $153 million in penalties for engaging in a system of unconscionable conduct and misleading and deceptive conduct. The penalty award follows a declaration from the Court that AIPE breached the Australian Consumer Law by enrolling students under the VET FEE-HELP program by misrepresenting that the courses were free and targeting vulnerable consumers. This is the highest total penalty awarded under the Australian Consumer Law, but may be mostly symbolic in circumstances where AIPE is in liquidation. This ACCC media release can be viewed here.
ACCC commences proceedings against Booktopia regarding refund policy
The ACCC has instituted proceedings in the Federal Court against online retailer Booktopia. The ACCC alleges that, last year, Booktopia stated on its website that consumers had to notify it of a faulty product within two days of delivery in order to have a right to a refund in relation to that product, and that consumers had no refund rights in relation to digital content such as eBooks. The ACCC alleges that this was misleading, because the Australian Consumer Law does not limit consumers' rights in this way. The ACCC media release can be viewed here.
ACCC appeals Employsure penalty
As reported in the previous Competition and Consumer Law Update, the Full Court of the Federal Court found that Employsure had breached the Australian Consumer Law in relation to its Google advertisements. The Full Court ordered Employsure to pay a pecuniary penalty of $1 million. The ACCC has appealed this decision, seeking an increased penalty of $5 million, on the basis that the original penalty was "manifestly inadequate". The ACCC media release can be viewed here.
Legislative and Other Developments
ACCC action regarding rapid antigen test pricing
The ACCC has issued several media releases regarding the pricing of COVID-19 rapid antigen tests (RATs). On 4 January 2022, the ACCC stated that it was "aware of the significant public concern" about the pricing of RATs and will be examining claims of price gouging. The ACCC reiterated its concerns on 17 January 2022 and revealed that its investigations had shown that some retailers were pricing the tests at as much as $70, despite a wholesale cost of between $3.95 to $11.45. The ACCC stated that it was working with the Australian Federal Police to determine whether these practices were a breach of declarations made under the Biosecurity Act, which contains a prohibition on selling RATs bought at retail level with more than a 20% markup. On 1 February 2022, the ACCC released a further statement that it is continuing to receive a high volume of complaints about this issue and has referred several reports to the Australia Federal Police. Further action from the ACCC in this space seems likely. The ACCC media releases can be viewed here, here, and here.
Ford pays penalties for false advertising of Mustang features
Ford has paid penalties of $53,280 for allegedly misleading consumers about the performance features of its 2021 Mustang Mach 1 model. Ford published brochures which represented that the Mach 1 model had various features such as rear parking sensors, LED fog lamps, and adaptive cruise control when this was not the case. Ford has agreed to provide an 'improved compensation offer' (including the option of a full refund) to customers who bought a Mustang Mach 1 during the time that the brochures were published. The ACCC media release can be viewed here.
Funeral companies provide court-enforceable undertakings
Consistent with one of its enforcement priorities of targeting competition and consumer issues in the funeral services sector, the ACCC has issued infringement notices to two funeral companies, Parkside Funerals and Bowra & O'Dea. In the case of Parkside Funerals, the company admitted that it made a false and misleading statement by representing that the 'estate fee' on its invoices was a fee associated with delivery of its funeral services, when in fact it was a penalty charged to the customer if they did not pay the invoice by the due date. Parkside agreed to pay a penalty of $13,320, to refund affected consumers, and to amend its invoices. In the case of Bowra & O'Dea, the company agreed to pay a penalty of $26,640 in relation to advertising prices for its funeral services which did not include all unavoidable costs and including unfair terms in its contracts. The ACCC media releases can be viewed here and here.
CovaU pays penalties regarding its electricity plans
Electricity provider CovaU has paid $33,300 in penalties as a consequence of advertising its residential electricity plans without stating a percentage difference to the comparison price set by the government, as mandated by the Electricity Retail Code. The ACCC media release can be viewed here.
ACCC's 2022 enforcement priorities
The ACCC has released its 2022-2023 compliance and enforcement priorities. These priorities indicate the ACCC's likely focus in the coming year, and include a focus on consumer, fair trading and competition issues relating to:
- environmental claims and sustainability;
- digital platforms (including manipulative or deceptive advertising and marketing practices in the digital economy);
- the COVID-19 pandemic;
- pricing and selling of essential services (focusing on energy and telecommunications);
- empowering consumers and promoting industry compliance and consumer guarantees, focusing on high value goods such as motor vehicles;
- global and domestic supply chains;
- financial services;
- exclusive arrangements by firms with market power that impact competition;
- ensuring small businesses receive the protections of the competition and consumer laws, particularly in the areas of agriculture and franchising; and
- consumer product safety issues for young children (including compliance with the button battery safety standards).
Enduring priorities (ie, conduct the ACCC always regards as a priority) include anti-competitive conduct, product safety and conduct impacting vulnerable or disadvantaged consumers, or Indigenous Australians.
The ACCC's 2022-2023 Compliance and Enforcement Priorities document can be viewed here.
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.