Mega bucks cartel conduct penalties for K-Line and Garuda
The ACCC has had a couple of big wins in penalties for cartel conduct.
First, a record Australian fine for criminal cartel conduct - $34.5M. Japanese shipping company K-Line pleaded guilty to price fixing for the transport of cargo like cars, trucks, buses, etc. The Federal Court wanted to send a powerful message that global cartel conduct will be dealt with harshly by Australian courts. A potential max penalty of $100M (10% of the company's annual turnover relating to Australia) and 28% discount for early guilty plea and cooperation produced the $34.5M figure.
Separately, Garuda was hit with a $19M penalty for its part in the global air cargo price fixing cartel. This concludes the ACCC's prosecution of a 14 major airlines over at least the past decade. Australian penalties ran to $132.5M in total, Garuda coming in second top. Qantas got the gold medal with $20M. ACCC Chair Rod Sims described it as 'one of the worst examples' of price fixing that the Commission has seen. Whether Garuda pays the penalty remains to be seen. It has so far obtained two extensions of time and may seek a permanent stay of the penalty order on the basis that it would 'significantly disrupt' its internal affairs.
$2.3M penalty for misleading Indigenous Australian art claims
It's a $2.3M penalty for Birubi Art. Turns out that using words like 'Authentic Aboriginal Art', 'hand painted' and 'Australia' created the impression that its products were hand painted by Australian Aboriginal people and made in Australia. As the products were actually made in Indonesia, the Court said the claims were firmly in the misleading category. Even though Birubi was in liquidation and was unlikely to be able to pay, the Court said the importance of the Indigenous art industry to Indigenous people required a robust deterrence message. A $2.3M message.
Advertised discounts must actually be a discount
Kogan Australia is facing Court after advertising a 10% discount promotion. Yes, it did discount its products by 10%. But only after it inflated prices immediately before offering the discount. Then it reduced prices after the discount period. The ACCC says that this creates the false impression of an effective discount, making customers think they were getting products below their usual prices. No sneaky technicalities allowed.
ACCC tackling environmental issues through consumer law
Environmental claims are on the ACCC radar.
First, the ACCC took issue with 'flushable' wipes, saying they weren't really flushable. It argued that this was both misleading and a problem for the sewerage system. The ACCC lost at trial, but is appealing, saying that it should be enough to show that the wipes are a kind that could pose a risk, rather than demonstrating the particular 'flushable' wipes caused actual damage.
Second, the ACCC is appealing a decision about the claim that Woolworths' disposable plates, bowls and cutlery were 'biodegradable and compostable'. There is hot debate about what these words mean to the average customer, and whether it is a representation about future quality of the products, meaning they need reasonable grounds to make it. The appeal will be well worth following and will likely have implications for a lot of advertising claims.
We do not disclaim anything about this article. We're quite proud of it really.