27 March 2014

Direct Selling Legal Update - March 2014



2014 has got off to a busy start with many local changes of relevance to the direct selling sector.
Australia Consumer Protection
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Welcome to the latest edition of the Addisons Direct Selling Legal Update.

2014 has got off to a busy start with many local changes of relevance to the direct selling sector.
In this update, we consider the following matters and developments.

ACCC releases Compliance and Enforcement Policy for 2014 - What does this mean for the direct selling sector?

Each year, the Australian Competition and Consumer Commission (the ACCC) releases a Compliance and Enforcement Policy, which sets out the priority areas for the year and the key factors that the ACCC will consider when determining whether to take enforcement action.

On 21 February 2014, the ACCC published its Compliance and Enforcement Policy for 2014. The 2014 Policy provides insight into the ACCC's focus areas for 2014, particularly those areas that the ACCC will be considering when exercising their investigative and enforcement powers.

Australia's New Privacy Laws Take Effect – when will the OAIC take enforcement action and what does this mean for your business?

On 12 March 2014, significant changes to the Privacy Act 1988 took effect. The changes included the introduction of a set of Australian Privacy Principles (APPs), which set out the standards, rights and obligations in relation to the collecting, handling, holding, access and correction of personal information.

Given the Privacy Commissioner's new powers, it is unsurprising that the Office of the Australian Information Commissioner (OAIC) has been busy, recently announcing its enforcement approach to the new privacy laws. We take a look at what the OAIC will consider when deciding whether to take enforcement action against a business.

Transfer Pricing Reforms - International Transaction Documentation - Time for a refresh?

In July 2013, new Australian transfer pricing rules came into effect. One of the features of the rules was that cross-border transactions are to be undertaken on an arms-length basis. The Australian Taxation Office (ATO) may disregard actual transactions and "reconstruct" them on a hypothetical arm's length basis. The rules not only apply to entities within the same group, but can apply to transactions between unrelated parties if they have not dealt with each other on an arm's length basis.

Parallel Imported Products and Counterfeit Goods - Direct Selling Companies Protect Your Brands - Lodge a Notice of Objection with Customs

Direct selling companies may either have trade marks registered in Australia or be an authorised user of an Australian trade mark. Often, the business may have international operations which involve the production and sale of goods in various countries throughout the world. Issues relating to the importation of products from one country to another (which may not be authorised) or counterfeit products often arise. These issues can cause significant problems for the business. One step which direct selling companies can take is to lodge a Customs Notice. We outline details about this process.

ACCC Succeeds in False Testimonials Case: ACCC v P & N Pty Ltd (2014) - Guidance for Using Testimonials

Businesses that publish testimonials to promote their products or services should ensure that their testimonials are not false or misleading. This is demonstrated by the recent case of ACCC v P & N Pty Ltd (2014), which provides some guidance on publishing testimonials.

Reforms to the Therapeutic Goods Act 1989 (Cth)

Recent reforms to the Therapeutic Goods Act 1989 (Cth) (the Act) change the classification of therapeutic goods, the way regulatory decisions are published and the advertising requirements in respect of therapeutic goods to reduce potential risks to the public. New criminal offences and civil penalties are also introduced.

ACCC v Lux: the Federal Court provides clarity on unconscionable conduct provisions under the ACL

The Full Federal Court judgment in ACCC v Lux (2013) marks a significant decision on the application of the prohibition against unconscionable conduct contained in the Australian Consumer Law (ACL). Notably, the case provides greater clarity on the statutory concept of unconscionable conduct. Relevantly for direct selling businesses, this decision examines, in detail, unconscionable conduct that was engaged in by direct salespersons.

We explore the factors that make up "unconscionable conduct" and provide take home points designed to help businesses avoid engaging in unconscionable conduct.

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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