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 March and April 2022. The previous update is available here.
Trivago ordered to pay $44.7 million in penalties for misleading consumers
The Federal Court has ordered Trivago to pay penalties of $44.7 million for making misleading representations about hotel room rates. As we have previously reported, the Full Court of the Federal Court upheld the previous decision that Trivago had breached the Australian Consumer Law by representing that its website allowed users to identify the cheapest hotel room rates when in fact it used an algorithm which was weighted towards booking sites which paid Trivago the highest cost-per-click fee. Trivago also used strike-through pricing which gave consumers the false impression that rates represented better savings than they actually did. Justice Moshinsky ordered $44.7 million in penalties having regard to the seriousness and "highly misleading" nature of the conduct, the length of time over which the conduct occurred, the large number of affected consumers, the "substantial loss or damage" caused to consumers, and the "substantial revenue" Trivago derived from the contravening conduct. The ACCC media release can be viewed here.
Peters Ice Cream pays $12 million penalty for exclusive dealing
The Federal Court of Australia has ordered Peters Ice Cream to pay a $12 million penalty for anti-competitive conduct in relation to the distribution of ice creams sold in petrol stations and convenience stores. Peters admitted that, between 2014 and 2019, it engaged the distributors PDF Food Services on the condition that PDF would not distribute competitors' single serve ice creams products in certain areas of Australia without consent from Peters. Peters admitted that this constituted exclusive dealing that had the likely effect of substantially lessening competition in the market for the supply of single serve ice creams. Peters made joint submissions with the ACCC seeking a $12 million penalty, which were accepted by the Court. The ACCC media release can be viewed here.
ACCC sues Meta for publishing scam crypto ads on Facebook
The ACCC has commenced proceedings in the Federal Court of Australia against Meta Platforms (the owner of Facebook) alleging that it engaged in misleading or deceptive conduct by publishing scam advertisements for cryptocurrencies or money-making schemes. The advertisements falsely claimed that prominent Australian celebrities and businesspeople had endorsed particular schemes. Users who clicked through on the ads and sought to sign up to the schemes were then pressured into depositing funds into the fake schemes, with the ACCC aware of one instance where a consumer lost more than $650,000 due to the scam. While Meta was not responsible for the scams, it did publish the advertisements, which forms the basis of the ACCC's allegations that Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers. The case will raise interesting questions as to the liability of publishers under the Australian Consumer Law and Australian Securities and Investments Commission Act. The ACCC media release can be viewed here.
Uber admits that cancellation messages were misleading or deceptive
The ACCC has commenced proceedings against Uber, which has admitted that it engaged in misleading or deceptive conduct and made false or misleading representations by displaying a cancellation warning to customers which stated that "You may be charged a small fee since your driver is already on the way". Uber displayed the message even if riders were within their advertised five minute 'free cancellation period'. Uber changed the message in September 2021, and has made joint submissions to the Court with the ACCC seeking orders which include penalties totalling $26 million. The Federal Court will decide whether the orders sought are appropriate. The ACCC media release can be viewed here.
ACCC commences proceedings against Honda for misleading conduct
The ACCC has commenced proceedings against Honda in the Federal Court of Australia, alleging that it made false and misleading representations between January and June 2021 that two of its former authorised Honda dealerships would close or had already closed. The ACCC alleges that these statements were false because both former franchisees were continuing to trade, albeit, independently (ie, not as HONDA branded dealers) even through their franchise agreement with Honda had been terminated. The ACCC is seeking declarations, pecuniary penalties, and costs. The ACCC media release, including the Concise Statement filed by the ACCC to commence the proceeding, can be viewed here.
ACCC appeals against Mazda unconscionable conduct decision
The ACCC has appealed the Federal Court's decision that Mazda did not engage in unconscionable conduct in relation to representations made to consumers regarding their refund rights. As we previously reported, the Federal Court dismissed this aspect of the ACCC's case, but found that Mazda did engage in misleading and deceptive conduct and made false or misleading representations to consumers by denying refund requests in relation to vehicles that had serious and recurring faults. The ACCC is now arguing that Mazda's conduct "fell below the applicable norms of commercial behaviour, and was in all the circumstances unconscionable". The ACCC media release can be viewed here.
Legislative and Other Developments
Speedway Australia undertakes to address competition concerns
Speedway Australia, the governing body for speedway racing in Australia, has provided a court-enforceable undertaking to the ACCC that it will not prohibit its tracks from hosting racing events that include divisions or classes other than those that are approved by Speedway Australia. The ACCC alleged that Speedway Australia's track operators were being restricted in their choice of the speedway racing classes or divisions they could program to race at their tracks due to an agreement between Speedway Australia and the Sprintcar Control Council of Australia. The ACCC media release can be viewed here.
Preliminary competition concerns raised
The ACCC has outlined preliminary competition concerns with the following proposed transactions:
- The proposed acquisition of the Port of Geelong by the Spirit Super Palisade Consortium. The ACCC media release can be viewed here.
- THL's proposed acquisition of Apollo. New Zealand-based THL and Australian-based Apollo, both tourism companies, are involved in the rental, sale and manufacture of RVs and, according to the ACCC, are by far the two largest suppliers in this market. The ACCC media release can be viewed here.
Digital Platform Services Inquiry
The ACCC has released its fourth report, as part of the Digital Platform Services Inquiry, which examined whether online marketplaces are promoting fair and competitive markets for consumers and sellers. The report has highlighted a number of concerns about the operation of online retail marketplaces, including that:
- some marketplaces are not transparent in the way they display and rank products shown to consumers;
- there may be a conflict of interest faced by hybrid marketplaces (those that sell third party goods as well as their own products), including by way of self-preferencing;
- in some cases, consumer data collected and used by marketplaces may not align with the privacy preferences and expectations of consumers;
- there was a lack of dispute resolution mechanisms; and
- there was a need for more consumer protections (eg, in relation to unsafe products).
The media release, and report, can be accessed here.
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