Latest Consumer Law Updates in Australia for 2024

Federal Court finds DG Institute made false or misleading representations, sole director knowingly concerned in contraventions (Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd)

Date:10 April 2024
Court: Federal Court of Australia
Judge(s): Jackman J
Judgment date: 9 April 2024
Catchwords: Consumer law – misleading and deceptive conduct – accessorial liability

Abstract:

The Federal Court has found Master Wealth Control Pty Ltd (Master Wealth Control), trading as DG Institute, made false or misleading representations in the promotion and sale of two education programs for control of wealth. Its director, Ms Dominique Grubisa, was also found liable for aiding, abetting and procuring contraventions and being knowingly concerned in and party to the contraventions.

Background

DG Institute offered two education programs relating to property and business investment to consumers called Real Estate Rescue (RER) and Master Wealth Control (MWC) from April 2017 to November 2022. Both programs were promoted through free in-person and online seminars and in videos featuring Ms Grubisa on its website.

During this period, at least 1,900 and 1,800 students were enrolled in the RER and MWC programs respectively and each paid between $4,500 to $9,200 to participate. DG Institute earned a total of over $18 million in revenue from both programs.

CCA amendments establishing designated complaints function for ACCC to commence 1 May 2024

Date: 9 April 2024
Source: Parliament of Australia

Abstract:

The Competition and Consumer Amendment (Fair Go for Consumers and Small Business Act 2024 (Cth) (Act) passed both houses of Parliament on 26 March and received Royal Assent on 8 April 2024. It will commence operation on 1 May 2024.

The Act amends the Competition and Consumer Act 2010 (Cth) (CCA) to insert a new Part XIE which establishes a designated complaints framework, allowing consumer and small business advocacy groups approved by the Minister to submit designated complaints to the Australian Competition and Consumer Commission on issues of significant or systemic market issue affecting consumers and/or small businesses, or relating to breaches of the Australian Consumer Law (ACL) or the CCA.

The ACCC must respond to designated complaints publicly within 90 days and indicate whether or not it will take further action on them. If it determines that further action is warranted, it must set out the proposed action, commence undertaking it within 6 months and then report on the outcome.

EU Directive on Empowering Consumers for the Green Transition comes into force

Date: 4 April 2024
Source: European Commission

On 27 March 2024, the new European Union (EU) Directive on Empowering Consumers for the Green Transition (Directive) entered into force. The rules empower consumers for the green transition by ensuring better information on durability and reparability of goods and consumer guarantee rights are provided at the point of sale, and aims to prevent greenwashing and early obsolescence practices.

The Directive amends the existing Consumer Rights Directive and the Unfair Commercial Practices Directive to best support changes in consumer behaviour to promote a more resource-efficient, sustainable and circular economy. Companies will no longer be able to make vague environmental claims that they are “green” or “environmentally friendly” if they cannot demonstrate their statements and displaying uncertified sustainability logos will be prohibited.

To ensure consumers are well informed, information on a good’s commercial guarantee of durability must be offered by producers on a harmonised label and on legal guarantee of conformity via a harmonised notice. The European Commission will specify the content and design of the harmonised label and notice through the implementation of acts by 27 September 2025.

Sweeping changes to the Food and Grocery Code of Conduct recommended

Date: 8 April 2024
Source: Treasury

Abstract:

The Interim Report for the Independent Review of the Food and Grocery Code of Conduct has found that the current voluntary industry code of conduct, the Food and Grocery Code of Conduct (Code), is ineffective and in need of strengthening.

While noting there is a heavy imbalance in market power between suppliers and supermarkets in Australia’s heavily concentrated supermarket industry, the Review does not support a forced divestiture power to address market power issues.

The Interim Report proposes eleven recommendations for the Code’s improvement, of which eight are firm recommendations and three are subject to further stakeholder feedback.

Firm recommendations

The Code is currently voluntary and is not enforceable by the Australian Competition and Consumer Commission (ACCC). The Interim Report recommends that the Code be made mandatory and apply to all supermarkets with annual revenues over $5 billion (this covers Coles, Woolworths, ALDI, and Metcash, who are currently signatories), with all suppliers to be automatically covered. This would allow stronger enforcement by the ACCC, including penalties for serious breaches amounting to the greater of:

• up to $10 million;
• 10% of a supermarket’s annual turnover; or

Federal Court finds Vanguard engaged in greenwashing by misrepresenting ESG credentials of investment fund (Australian Securities and Investments Commission v Vanguard Investments Australia Ltd [2024] FCA 308)

Date: 3 April 2024
Court: Federal Court of Australia
Judge(s): O’BRYAN J
Judgment date: 28 MARCH 2024
Catchwords: CONSUMER LAW – ss 12DB and 12DF ASIC Act – greenwashing – ESG representations

Abstract:

In proceedings brought by the Australian Securities and Investments Commission (ASIC), the Federal Court has found Vanguard Investments Australia Ltd (Vanguard) liable for breaching the consumer protection provisions in ss 12DB and 12DF of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) by making false or misleading representations about the ESG screening criteria for its Ethically Conscious Global Aggregate Bond Index Fund (the Fund). A hearing as to penalties will occur at a later date.

The case:

ASIC alleged that in Product Disclosure Statements (PDS), media releases, website content, a Youtube video interview and at a promotional event presentation later published online, Vanguard had made representations that the Fund offered an ethically conscious investment opportunity by seeking to track the Bloomberg Barclays MSCI Global Aggregate SRI Exclusions Float Adjusted Index (Index)) and that before being included in the Index (and thus, the Fund), securities were researched and screened against ESG criteria and those that breached the criteria were excluded or removed.

New legislation to increase the accessibility and affordability of financial advice

Date: 28 March 2024
Source: Treasury

Summary originally published by Capital Monitor

The Government has introduced the first tranche of legislation to deliver its comprehensive package of reforms to ensure Australians have access to quality and affordable financial advice, said Assistant Treasurer Stephen Jones. There are over five million Australians at or approaching retirement who need assistance to navigate the pension and superannuation systems. Unfortunately, the average cost of financial advice puts professional advice out of reach for many Australians. The Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 implements reforms which reduce unnecessary red tape that adds to the time and cost of preparing financial advice.

Federal Court dismisses ASIC claim in relation to alleged unfair contract terms in insurance contracts (Australian Securities and Investments Commission v Auto & General Insurance Company Limited)

Date: 25 March 2024
Court: Federal Court of Australia
Judge: Jackman J
Judgment date: 22 March 2024
Catchwords: INSURANCE — Unfair contract terms regime — Where term of product disclosure statement required insured to “tell us if anything changes while you’re insured with us” — Whether term unfair — How lack of transparency should be taken into account under unfair contract terms regime.

Abstract:

The Federal Court (Jackman J) has dismissed the Australian Securities and Investments Commission’s (ASIC’s) claim that certain terms in insurance contracts issued by Auto & General Insurance Company Limited (A&G) were unfair under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

Background

A&G issued approximately 1.4 million home and contents insurance contracts between April 2021 and May 2023 under numerous brands such as Budget Direct, ING and Virgin Insurance.

Each contract contained terms requiring the insured to notify the insurer of certain events during the insurance period. These notification obligations included broadly-worded obligations to “[t]ell us if anything changes while you’re insured with us” and “[w]hile you’re insured with us… tell us if anything changes about your home or contents”.

Online florist Bloomex to pay $1M penalty for misleading price representations and star ratings (Australian Competition and Consumer Commission v Bloomex Pty Ltd)

Date: 18 March 2024
Court: Federal Court of Australia
Judge(s): Anderson J
Judgment date: 15 March 2024
Catchwords: CONSUMER PROTECTION – misleading or deceptive conduct by making false representations in respect of advertised discounts, customer ratings and prices – agreed declaratory relief, injunctions and a compliance program agreed – penalty disputed and total penalty of $1 million imposed

Abstract:

The Federal Court has ordered online floristry and gift retailer Bloomex Pty Ltd (Bloomex) to pay a penalty of $1,000,000 for making misleading or deceptive representations in ‘strikethrough’ discounts, displaying false star ratings and imposing inconsistent price surcharges.

Background

Bloomex is one of the largest online florists in Australia and advertised approximately 730 products through its website. During the relevant period of February 2019 to March 2023, Bloomex’s website was visited 6.3 million times and contained the following representations:

• Discount Representations: discounted product listings that had a purchase price and a strikethrough price with the statements “You Save” and “50% off” despite products never having been sold at the strikethrough price;

ACCC launches inquiry into general internet search services in Australia

Date: 18 March 2024
Source: Australian Competition and Consumer Commission

The Australian Competition and Consumer Commission (ACCC) has released an issues paper for its new inquiry into the state of competition in general internet search services such as Google and Bing in Australia. This new inquiry is part of the ACCC’s ongoing Digital Platform Services Inquiry (see our previous Latest Legal Update here).

The issues paper seeks the views of interested parties about the level of competition present in general search services as well as general trends in search quality and the relationship between the two.

The inquiry will also consider the impacts of regulatory and industry developments including those in other jurisdictions and the emergence of AI-powered search engines and its potential impact on competition in the market for general search services. The report will not examine issues relating to generative AI more broadly, including privacy, online safety, or misinformation issues.

The ACCC previously considered competition and consumer issues in general search and web browser services in its September 2021 and July 2019 Digital Platforms Inquiry reports.

Interested parties have been asked to make submissions to the ACCC by 17 April 2024.

See the ACCC’s media release here and the issues paper here.

US House of Reps passes bill to ban TikTok if company doesn’t cut ties with China

Date: 14 March 2024
Source: Protecting Americans from Foreign Adversary Controlled Applications Act

Social media platform TikTok is under threat of becoming banned in the United States (US) as the House of Representatives have passed a bill that, if successful in the Senate, would outlaw the application if it fails to sever ties with Chinese owner ByteDance.

The bill passed 352-65 with overwhelming bipartisan support just a week after it was first introduced. It faces a potentially less easy path through the Senate however as Democrat-controlled Senate has expressed a less rushed approach to the ban.

White House National Security Adviser Jake Sullivan said "do we want TikTok, as a platform, to be owned by an American company or owned by China? Do we want the data from TikTok – children's data, adults' data – to be staying here in America, or going to China?"

On the other side of the debate, senators like Republican Robert Garcia from California argued that the potential ban would have a negative impact on small business owners, entrepreneurs and young people, stating that it will “eventually backfire on the US itself".

Draft Buy Now Pay Later legislation released for consultation

Date: 13 March 2024
Source: Treasury.gov.au

On 12 March 2024 the Australian Government released for consultation the Treasury Laws Amendment Bill 2024 (Cth) (Amending bill). The Amending bill, if passed will regulate Buy Now, Pay Later (BNPL) products within Australia.

The Amending bill amends the National Consumer Protection Act 2009 (Cth), extending its application to BNPL products and bringing them into the existing regulatory framework for other credit products. The proposed legislation will require providers of BNPL products to hold an Australian Credit Licence and take steps to ensure that they are lending responsibly and meeting industry standards concerning product disclosure, dispute resolution and hardship assistance.

The draft bill is accompanied by an explanatory memorandum and draft regulations accompanied by an explanatory statement.

Submissions for interested parties will remain open until 9 April 2024 before the introduction of a final bill to Parliament later this year.

ACCC’s 2024 compliance and enforcement priorities reinforce focus on consumer protection

Date: 12 March 2024
Source: Australian Competition & Consumer Commission (ACCC)

On 7 March 2024 the Australian Competition and Consumer Commission released its compliance and enforcement priorities for 2024/25. ACCC Chair Gina Cass-Gottlieb announced the priorities in her address to the Committee for Economic Development Australia.

The ACCC’s priorities span across both competition and consumer law. Many of the issues identified in the ACCC’s 2022 and 2023 compliance and enforcement priorities remain a focus for the ACCC again this year. Other priorities have gained further prominence due to prevailing economic trends and conditions including the cost-of-living crisis (and price increases across a range of products and services) and the drive towards green and sustainable alternatives for the benefit of consumers and the environment.

Exclusive arrangements by firms with market power and competition and consumer issues relating to digital platforms and in global and domestic supply chains are among the enforcement priorities from 2023/4 that were not listed in the 2024/5 priorities.

New ACCC compliance and enforcement priorities for 2024:

• Supermarkets: In view of the ACCC’s 12-month price inquiry into competition in the supermarket and grocery sector, the inclusion of this new priority is not surprising.

ACCC releases 2024 compliance and enforcement priorities

Date: 7 March 2024
Source: Australian Competition & Consumer Commission (ACCC)

The ACCC has released its compliance and enforcement priorities for 2024. ACCC Chair, Gina Cass-Gottlieb outlined these regulatory priorities in the annual Committee for Economic Development Australia (CEDA) address. The priorities span across both competition and consumer law and many of the issues identified in the ACCC’s 2022 and 2023 compliance and enforcement priorities remain a focus for 2024 including essential services, the environment and sustainability and the digital economy. New priorities for the ACCC in 2024 include competition and consumer issues in the aviation and supermarket sectors.

A full transcript of Ms Cass-Gottlieb’s speech is available here and a summary of the Compliance and Enforcement Priorities for 2024 is here. The ACCC’s press release is here.

A further Latest Legal Update containing more detailed analysis of the ACCC’s 2024 compliance and enforcement priorities will be published shortly.

Federal Court issues record contempt penalty of $1.5M to Ultra Tune for failure to comply with Franchising Code obligations (Australian Competition and Consumer Commission v Ultra Tune Australia Pty Ltd (No 3))

Date: 4 March 2024
Court: Federal Court of Australia
Judge(s): Bromwich J
Judgment date: 1 March 2024

Catchwords: Contempt of court – breach of compliance orders – endorsement pursuant to r 41.06 – dispensing with r 41.06

Abstract:

In previous proceedings compliance orders containing a number of obligations were made against the respondent Ultra Tune Australia Pty Ltd (Ultra Tune). Ultra Tune failed to comply with these, and the ACCC brought further proceedings for alleged contempt of court. Despite a technical issue with the orders, the Federal Court held that Ultra Tune was guilty of four contempt charges and imposed a record contempt penalty of $1.5M.

The case

In proceedings brought by the Australian Competition and Consumer Commission (ACCC) in 2019 (Ultra Tune Australia Pty Ltd v Australian Competition and Consumer Commission [2019] FCAFC 164), Ultra Tune was found to have contravened ss 18 and 29 of the Australian Consumer Law (ACL) and cl 15CTH_REG_2014-168_SCH1PT3DV2SUBDVACL15 of the Franchising Code, by failing to disseminate mandatory documentation to franchisees in a timely manner and misleading a prospective franchisee regarding the details of the proposed transaction.

ASIC’s appeal successful in its misrepresentation case against ACBF and Youpla (Australian Securities and Investments Commission v ACBF Funeral Plans Pty Ltd (in Liq))

Date: 4 March 2024
Court: Federal Court of Australia – Full Court
Judge(s): Murphy, O’Bryan and Shariff JJ
Judgment date: 29 February 2024

Catchwords: Consumer law – Alleged false and misleading representations and misleading or deceptive conduct in marketing and selling funeral insurance plans to Indigenous communities

Abstract:

The Australian Securities and Investments Commission (ASIC) has successfully appealed against ACBF Funeral Plans Pty Ltd (ACBF) and Youpla Group Pty Ltd (Youpla), with the Full Federal Court finding that their representation that they were under Aboriginal ownership or management from 1 January 2015 to 30 November 2018 was false.

Background:

ACBF, a Youpla subsidiary, offered, promoted and sold their funeral expenses insurance policy named the “Aboriginal Community Funeral Plan” (ACF Plan) primarily to Aboriginal consumers and promoted the plan as “Australia’s only funeral insurance plan dedicated to the Aboriginal community”.

In 2017, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry made adverse findings against ACBF. In 2020, ASIC initiated proceedings against ACBF and Youpla for contraventions of ss 12DA and 12DB of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) alleging the following misrepresentations:

ASIC issues interim stop order to retailer for Centerpay deductions

Date: 4 March 2024
Court: Federal Court of Australia
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

The Australian Securities and Investments Commission (ASIC) has issued an interim stop order under s 739 of the Corporations Act 2001 (Cth) (Corporations Act) to Coral Coast Distributors (Cairns) Pty Ltd (CCD), which operates Urban Rampage retail stores, to halt its practice of having customers enter into credit agreements for purchases through Centrepay deductions.

As these deductions constituted a credit facility, CCD was required to adhere to the design and distribution (DDO) regime, contained in Pt 7.8A of the Corporations Act by publishing a Target Market Determination (TMD) to identify the class of consumers for whom the product was suitable and taking steps to ensure it would be marketed to that class. ASIC considered that CCD's Target Market Determination (TMD) lacked detail, particularly regarding consumers' financial capacity assessment and that this resulted from CCD’s inability to ensure that this form of credit facility was suited to the needs of the consumers identified in the TMD.

The decision was driven by concerns over financial harm to First Nations consumers, particularly those in remote Indigenous communities who are low-income Centrelink recipients with limited access to other credit forms.

ACCC seeks consumer and industry stakeholder feedback in supermarkets inquiry

Date: 1 March 2024
Source: Australian Competition and Consumer Commission

The Australian Competition and Consumer Commission (ACCC) is consulting both consumers and industry stakeholders for input into its inquiry into pricing and competition in the Australian supermarket sector. The regulator has published an issues paper seeking submissions from participants in grocery supply chains and issued an online consumer survey.

Background

The Federal Government issued formal directions to the ACCC to conduct an inquiry into competition and consumer issues in the supermarket sector (Inquiry) on 1 February 2024, in response to concerns from both consumers and suppliers about the growing costs of living.

The Inquiry’s Terms of Reference consider the following matters:

• the structure of markets for supply of groceries by suppliers, wholesalers and retailers;
• the approach of suppliers, wholesalers and retailers when setting grocery prices;
• factors affecting input prices along the supply chain; and
• non-price aspects of competition in markets for groceries such as loyalty programs and discounts for future or other services.

See the Ministerial direction here. For further information, see the ACCC’s last comprehensive inquiry into the grocery sector completed in 2008 here.

Treasury announces review of Australia’s credit reporting framework

Date: 1 March 2024
Source: The Australian Treasury

The Australian Government has announced an independent review of Australia’s Credit Reporting Framework.

The review will evaluate the effectiveness and efficiency of the credit reporting provisions in the Privacy Act 1988 (Cth) and the National Consumer Credit Protection Act 2009 (Cth) in enabling effective lending decisions by credit providers while ensuring the personal information of consumers is adequately protected.

The review is being conducted by former Australian Prudential Regulation Authority (APRA) senior executive Heidi Richards, with a report to be delivered by 1 October 2024.

For more information, see the terms of reference for the review here, and Treasury’s statement here.

TGA issues infringement notices for unlawful import, advertisement and supply of medicines totalling over $155,000

Date: 28 February 2024
Source: Therapeutic Goods Administration

The Therapeutic Goods Administration (TGA) has recently issued a total of 17 infringement notices to three different parties for unlawful import, advertisement, and/or supply of medicines not unapproved or unregistered under the Australian Register of Therapeutic Goods (ARTG).

Individual fined for alleged advertisement and supply of unapproved erectile dysfunction medicines

In February 2023, the TGA and NSW Police seized over 55,000 potentially dangerous products connected to an individual operating in the Newcastle area. The products seized were not listed in the ARTG and have not been approved for supply in Australia. Testing of the products revealed that the search had identified several prescription-only medicines such as Tadalafil, Sildenafil and Dapoxetine that the individual had no authority to import nor advertise directly to consumers under the Therapeutic Goods Act 1989 (Cth) (Therapeutic Goods Act).

The NSW individual was issued 13 infringement notices totalling $42,900. For further details, see the TGA’s media release on the matter here.

ACCC takes action against Grays for false or misleading representations in car auction listings

Date: 26 February 2024
Source: Australian Competition and Consumer Commission

The Australian Competition and Consumer Commission (ACCC) has initiated legal proceedings in the Federal Court against Australia-wide online auction business Grays eCommerce Group Ltd (Grays) for false or misleading listings about cars involving their features, characteristics, legal title or undisclosed obvious faults.

Grays has admitted to engaging in misleading or deceptive conduct in making false or misleading representations about cars listed for sale between 1 July 2020 and 30 June 2022 contravening ss 18, 29 and 33 of the Australian Consumer Law (ACL). At least 750 consumers purchased vehicles with misleading descriptions. Some then had to convince Grays to provide a remedy and waited months to have an outcome while others paid for vehicle repair themselves or resold their vehicles at a loss.

On 23 February, the ACCC accepted a court-enforceable undertaking from Grays under s 87B of the ACL that will commence once the court’s final orders are made. The undertaking includes:

• jointly seeking declarations, compliance program orders and a pecuniary penalty of $10 million;
• reviewing complaints during the relevant period and customer contacts during the term of the undertaking to identify and inform consumers eligible for redress;

Sydney Airport slots reform to target competition and consumer outcomes

Date: 23 February 2024
Source: Minister for Infrastructure, Transport, Regional Development and Local Government

The Australian Government has announced reforms to the Sydney Airport demand management scheme which are intended to deliver better efficiency, competition and consumer outcomes. The management scheme allocates slots to airlines which are permissions for an aircraft to either enter or leave an airport gate at a particular time. The Hon Catherine King MP states the scheme will be updated so that it better aligns with modern international standards.

Competition outcomes

The proposed reforms will seek to improve competition among airlines competing for slots at Sydney Airport by:

• increasing transparency about how the slots are allocated through monitoring reports;
• publishing independent audits of slot usage to detect and deter anticompetitive behaviour;
• updating the compliance regime to include penalties that address anti‑competitive behaviours, and bolster enforcement tools for the government.

The government intends that the reforms will benefit new entrant airlines, address slot misuse and create a more level playing field in the slot allocation process.

CER declares installer ineligible to install small solar photovoltaic systems for 12 months

Date: 16 February 2024
Source: Clean Energy Regulator

On 5 February 2024, the Clean Energy Regulator (CER) declared that Mr David Keith Coulthard, accredited Clean Energy Council installer, is ineligible to install small generation solar photovoltaic (PV) systems under the Small-scale renewable energy scheme for 12 months.

Accredited installers must be onsite during the set-up, mid-installation check-up and testing and commissioning of small solar PV systems to be eligible to receive Small-scale Technology Certificates (STCs). STCs can be sold to recoup costs of purchasing and installing or transferred to others at negotiated prices.

During 1 February 2022 and 5 August 2022, Mr Coulthard made false statements that he was the accredited installer or supervisor of 12 solar PV systems when he had not attended the sites himself. The CER exercised their power under reg 20AG of the Renewable Energy (Electricity) Regulations 2001 (Cth) (Regulations) in making the declaration and did not pursue court action after considering the nature of the offending and Mr Coulthard’s cooperation. Any solar PV systems installed by Mr Coulthard during the 12 month period will be ineligible to receive STCs.

Mazda ordered to pay $11.5 million penalty for false representations on consumer guarantee rights

Date: 15 February 2024
Court: Federal Court of Australia
Judge(s): O’Callaghan J
Judgment date: 14 February 2024

Catchwords: Consumer law – misleading and deceptive conduct – false or misleading representations – existence, exclusion or effect of any condition, warranty, guarantee, right or remedy

Abstract:

The Federal Court has ordered Mazda Australia (Mazda) to pay a pecuniary penalty of $11.5 million for making false or misleading representations in response to nine consumers’ requests for a refund or replacement of their vehicles with serious faults.

Background:

Nine consumers who bought Mazda vehicles between 2013 and 2017 experienced major failures within two years of purchase and took their vehicles to Mazda dealers for repeated repairs. Mazda refused to provide refunds or free replacements when requested and pressured consumers to accept lesser offers only after multiple failures.

The ACCC instituted proceedings against Mazda in October 2019 alleging unconscionable conduct and false and misleading representations. In November 2021, the Federal Court found that Mazda had engaged in misleading and deceptive conduct contravening ss 18(1) and 29(1)(m) of the Australian Consumer Law (ACL).

Legislation to establish ACCC designated complaints framework introduced into Parliament

Date: 15 February 2024
Source: Parliament of Australia

Abstract:

Legislation providing for certain consumer and business advocacy groups to make complaints to the Australian Competition and Consumer Commission (ACCC) has been introduced in the Federal Parliament.

The Competition and Consumer Amendment (Fair Go for Consumers and Small Business) Bill 2024 (Cth) (Bill) provides for groups designated by the Minister to be empowered to make complaints to the ACCC regarding significant or systemic market issue affecting Australian consumers or small business, and which relate to a breach of the Competition and Consumer Act or the Australian Consumer Law. The ACCC would be required to assess and publicly respond to such designated complaints within 90 days, specifying what if any further action it will take.

A designated complaints mechanism, also sometimes referred to as “super complaints”, was an election commitment of the Labor Government and has since been subject to Treasury consultation with industry stakeholders. The framework draws on a similar super complaints function which has operated in the United Kingdom since 2003.

Westpac ordered to pay $1.8 million penalty for unconscionable pre-hedging in interest rate swap deal

Date: 12 February 2024
Court: Federal Court of Australia
Judge(s): Lee J
Judgment date: 31 January 2024

Catchwords: Corporations – unconscionable conduct – insider trading – pre-hedging – Corporations – breach of financial services licensee obligations – services not provided efficiently, honestly and fairly

Abstract:

The Federal Court has ordered Westpac Banking Corporation (Westpac) to pay penalties of $1.8 million for unconscionable conduct in an $12 billion interest rate swap deal and $8 million towards for the Australian Securities and Investments Commission’s (ASIC) costs.

Background:

On 20 October 2016, Westpac executed the largest interest rate swap in Australian financial market history (Swap Deal) to allow a consortium of investors from the IFM group and AustralianSuper to acquire a 50.4% interest in Ausgrid. Westpac had previously quoted the consortium an execution margin on the basis that it would not receive notice of the Swap Deal to prevent on-market pre-hedging. Despite awareness of its clients’ concerns regarding potential pre-hedging, Westpac made internal plans to pre-hedge up to 50% of the interest rate and failed to disclose these plans to the consortium.

Final Report into Franchising Code finds it is generally fit for purpose but recommends some regulatory changes

Date: 9 February 2024
Source: Federal Treasury

The Final Report on the review of the Franchising Code of Conduct (Franchising Code) conducted by Dr Mihael Schaper was released on 8 February 2024 with 23 formal recommendations and 34 suggestions for implementation.

The Franchising Code is a mandatory industry code under the Competition and Consumer Act 2010 (Cth), which regulates franchisor-franchisee relationships.

The review spanned from August to December 2023. Input was received in over 40 meetings with industry stakeholders, 95 submissions and a total of 544 survey responses.

The Report concludes that the Franchising Code is generally fit for purpose, however recommended some changes to existing provisions to ensure wider coverage across franchisees and promote best practice across the sector’s operations.

Key findings and recommendations of the Report include:

• Franchising sector: the need for better statistical metrics to measure demographics and success of franchise sector;
• Scope and structure of the Code: a lack of understanding about the Franchising Code’s purpose and scope, especially amongst franchisees;
• Entering into a franchise agreement: detailed disclosure requirements are burdensome for franchisors to comply with and franchisees to understand;

Court declares Westpac engaged in unconscionable conduct for interest rate swap, maximum penalty applied

Date: 5 February 2024
Source: Australian Securities and Investments Commission (ASIC)

Abstract:

The Federal Court has declared Westpac Banking Corporation (Westpac) engaged in unconscionable conduct in October 2016 when executing a $12 billion interest rate swap transaction, the largest of its kind in Australian financial market history. Westpac will pay the maximum penalty of $1.8 million in relation to the conduct, together with $8 million for ASIC's litigation and investigation costs. Westpac's unconscionable conduct arose when it engaged in pre-hedging ahead of an interest rate swap transaction with a Consortium comprising AustralianSuper and IFM entities.

Summary originally published by Capital Monitor.

$302,500 penalty paid by Outdoor Supacentre for spam breaches

Date: 31 January 2024
Source: Australian Communications and Media Authority (ACMA)

Outdoor Supacentre has paid a $302,500 penalty for sending 83,273 marketing text messages that were in breach of the Spam Act 2003 (Cth). The ACMA has also accepted a three year court-enforceable undertaking that Outdoor Supacentre will appoint an independent consultant to review and report on their internal procedures.

Businesses must have a user’s consent before sending electronic marketing messages. Under s 18, these messages must also allow users to unsubscribe, which must be actioned within five business days if requested.

In response to increased consumer complaints during 2022 and 2023, the ACMA issued Outdoor Supacentre five alerts regarding the alleged non-compliance of their text messages sent without an ability to unsubscribe.

The ACMA investigation spanning communications between 1 December 2022 and 4 May 2023 found 81,698 texts were sent without the user’s consent and 1,575 texts were sent to customers who had already unsubscribed. The relevant text messages concerned sale offers or promotions and did not allow users to effectively unsubscribe, falling under ‘commercial electronic messages’ with an ‘Australian link’ under s 16(1) of the Spam Act 2003 (Cth).

ACCC releases childcare services inquiry recommendations

Date: 29 January 2024
Source: Australian Competition and Consumer Commission

Abstract:

The Australian Competition and Consumer Commission (ACCC) has released its recommendations and findings from its year-long inquiry into childcare services, which examines how childcare markets and competition are working for Australian households.

In the final report of its inquiry, the ACCC finds that the functioning of the childcare market under current regulations is not delivering on key policy objectives, including relating to accessibility and affordability.

The report makes thirty-one findings and eight recommendations, including that Government consider a mix of different regulatory measures to improve childcare outcomes.

The ACCC’s media release is available here and the childcare services inquiry’s final report here.

ACCC inquiry to examine competition and prices in the supermarket sector

Date: 25 January 2024
Source: Australian Competition and Consumer Commission

On direction from Treasurer Jim Chalmers, the Australian Competition and Consumer Commission (ACCC) will carry out an inquiry into Australia’s supermarket sector. The year-long inquiry will cover competition in the supermarket sector, pricing practices of the supermarkets and the relationship between wholesale, including farmgate, and retail prices. The inquiry will also look at any emerging issues related to more recent trends, including online shopping, changes in technology, and loyalty programs.

ACCC Deputy Chair Mick Keogh stated that the inquiry “will examine the nature of the current competitive environment between supermarkets, as well as the barriers to greater competition and new entry in the sector.”

The Treasurer is empowered to direct the ACCC to hold a price inquiry into a particular matter under Part VIIA of the Competition and Consumer Act 2010 (Cth).

An issues paper is expected to be published in February seeking views on the key issues the ACCC will consider in the inquiry, with an interim report due to be provided to the Government later this year. The final report is anticipated in early 2025.

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TM — use of BED & BATH not an infringement, but applicant’s reputation leads to a success in claims under the ACL and passing off

Date: Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2023] FCA 1587
Court: Federal Court of Australia
Judgment date: 14 December 2023
Catchwords: TRADE MARK INFRINGEMENT – deceptive similarity – independent reputation in “BED BATH” or whether the words are descriptive – relevance of confusion evidence
TRADE MARK DEFENCES TO INFRINGEMENT – s 122(1)(b)(i) good faith defence – defence would not apply if there was infringement
TRADE PRACTICES – well-established reputation of the applicant – wilful blindness of the respondent – elements established of breaches of ss 18 and 29 of the ACL and of passing off

Abstract:

In Bed Bath ‘N’ Table Pty Ltd v Global Retail Brands Australia Pty Ltd [2023] FCA 1587, Global Retail Brands Australia Pty Ltd, which owns stores and trade marks incorporating the word “House”, was found not to infringe the trade marks comprising the words “BED BATH N’TABLE”, by use of “BED & BATH” in its logo.

ACCC to have increased powers under expanded News Media and Digital Platforms Bargaining Code

Date: 18 December 2023
Source: The Hon Stephen Jones MP

All recommendations made in Treasury’s review of the News Media and Digital Platforms Mandatory Bargaining Code (the Code) will be implemented by the Government, as announced by Government Ministers Michelle Rowland and Stephen Jones.

Treasury made five recommendations to improve the Code’s operation, in response to which the Government will introduce legislative amendments to facilitate the Australian Competition and Consumer Commission (ACCC) preparing periodic reports on the digital platforms that should be covered by the Code. In addition, the ACCC will have compulsory information-gathering powers to assist it to prepare these reports, and to allow scrutiny of commercial deals between the digital platforms and Australian news businesses.

The joint media release from MPs Michelle Rowland and Stephen Jones is available here and the full Government response is available here

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ACCC provides guidance on unfair contract terms in franchise agreements

Date: 18 December 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

The ACCC has released a report detailing key findings of recent targeted compliance checks on franchisors under the Australian Consumer Law’s unfair contract terms (UCT) regime. The report also sets out the ACCC’s recommendations for reducing UCT risk in franchise agreements.

Background

The ACCC’s compliance checks involved reviewing the franchise agreements of 10 newly established and small franchise systems (2 to 32 franchisees) in a variety of industries.

In its report, the ACCC indicates that many franchise agreements are likely to be standard form small business contracts that are subject to the UCT regime, given that prospective franchisees “generally have limited or no opportunity to meaningfully negotiate the terms within a franchise agreement”.

The ACCC found that all 10 franchise agreements contained potentially unfair terms. The key terms of concern were:

• unilateral variation clauses;
• withholding or set-off clauses;
• audit power clauses;
• restraint of trade clauses; and
• termination clauses.

In addition to the specific recommendations outlined below, the ACCC reiterated that the above types of clauses (and the terms of franchise agreements more generally) should not go beyond what is reasonably necessary to protect the franchisor’s legitimate business interests.

Franchisor of “Delicia” health food stores gives ACCC undertaking and pays infringement notice for Franchising Code breaches

Date: 13 December 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

Delicia Franchising Pty Ltd (Delicia), the franchisor of approximately 10 “Delicia Acai & Protein Bar” stores predominantly based in South Australia, has given an enforceable undertaking to the ACCC for admitted breaches of its marketing fund obligations under the Franchising Code of Conduct (Franchising Code). Delicia also paid an infringement notice for its most recent contravention.

Franchisors’ marketing fund obligations

Under the Franchising Code, a franchisor with a marketing fund must:

• prepare an annual marketing fund statement within 4 months after the end of each financial year that includes sufficient detail to give meaningful information about income sources and expenditure items (cl 15(2)); and
• give franchisees a copy of that statement within 30 days after preparing it: cl 15(4).

Delicia’s breaches

The ACCC alleged, and Delicia admitted, that although Delicia prepared an annual statement for each of the 2020-2022 financial years, Delicia breached the Franchising Code by:

• failing to give franchisees copies of those statements within 30 days; and

failing to include sufficient detail in those statements (the statements only described significant expenditures at a high level without providing further explanatory information).

Government consults on designated ACCC complaints function

Date: 11 December 2023
Source: Andrew Leigh – MP

Abstract:

The Assistant Minister for Charities, Competition and Treasury Andrew Leigh has released a statement announcing draft legislation that if enacted will create a designated complaints function within the Australian Competition and Consumer Commission (ACCC).

Under the proposed legislation, designated consumer and small business advocates will be able to submit a complaint to the ACCC where they have evidence of a significant or systemic market issue affecting Australian consumers or small businesses.

In practice, this will mean that when a complaint is lodged the ACCC will be obligated to consider and publicly respond to the complaint within 90 days. The ACCC will also be required to state any further action that will be taken in response to the complaint when applicable.

The consultation period is open until 3 January 2024.

View the exposure draft legislation and explanatory materials here.

Class action launched against JB Hi-Fi for extended warranty sales

Date: 11 December 2023
Source: Supreme Court of Victoria

A class action against electronics retailer JB Hi-Fi has been filed in the Victorian Supreme Court alleging that extended warranties sold by the electronics retailer since 2011 were of little to no value as consumers already had access to the same remedies by virtue of the consumer guarantees provided under the Australian Consumer Law (ACL) for no cost.

The pleadings allege that JB Hi-Fi engaged in misleading or deceptive conduct and unconscionable conduct by misleadingly implying that its extended warranties provided additional protections not covered by the ACL and that its promotional material failed to make clear the limits of the rights available under extended warranties.

The class action is seeking compensation for consumers who purchased an extended warranty from JB Hi-Fi any time between 1 January 2011 and 8 December 2023.

High Court finds class action waiver clause unfair, allows Ruby Princess appeal

Date: 6 December 2023
Court: High Court
Judge(s): Gageler CJ, Gordon, Edelman, Gleeson, Jagot JJ 
Judgment date: 6 December 2023

Catchwords: CONSUMER PROTECTION - Extraterritorial application of s 23 of Australian Consumer Law - Whether s 5(1)(g) of Competition and Consumer Act 2010 (Cth) extended application of s 23 of ACL to contract- Whether class action waiver clause constituted unfair term under s 23 of ACL and void.

REPRESENTATIVE PROCEEDINGS - Whether class action waiver clause unenforceable as contrary to Pt IVA of Federal Court of Australia Act 1976 (Cth)

PRIVATE INTERNATIONAL LAW – Forum – Exclusive jurisdiction clause – Whether strong reasons not to grant stay of proceedings.

Abstract:

In Karpik v Carnival plc [2023] HCA 39 the High Court determined an interlocutory application arising out of representative proceedings brought on behalf of passengers of the Ruby Princess cruise ship against Carnival plc and Princess Cruise Lines Ltd (Princess) claiming losses caused by illness and deaths caused by the COVID-19 outbreak. The main proceedings were recently determined by the Federal Court in In Karpik v Carnival plc (The Ruby Princess) (Initial Trial) [2023] FCA 1280.

Telstra pays $24 million in penalties and consumer refunds after ACMA finds TCP Code breaches

Date: 6 December 2023
Source: ACMA

Abstract:

An investigation by the Australian Communications and Media Authority (ACMA) has found that Telstra wrongly billed 6,532 customers over a period of time ranging from April 2012 to August 2023 breaching billing accuracy provisions in the Telecommunications Consumer Protections Code 2019 (Code) and prior versions of the Code. ACMA’s investigation also found that Telstra breached s 121 of the Telecommunications Act 1997 (Cth) in failing to comply with a prior ACMA direction to comply with billing accuracy requirements given in 2020.

The earlier direction to comply with the Code was given as a result of previous charging accuracy issues that resulted in more than 10,000 customers being overcharged a cumulative $2.5 million over a 12-year period. Another similar instance also occurred in 2022.

As a result, ACMA has issued Telstra with a further direction to comply with the Code and an infringement notice imposing a penalty of $3,010,320. Telstra has also refunded over $17.7 million to customers with a further $3.4 million to be refunded by the end of the year.

Supermarket competition at the centre of Senate inquiry

Date: 5 December 2023
Source: The Greens

The Australian Greens party has moved to establish a Parliamentary Senate inquiry into alleged price gouging by major supermarkets. Senator Nick McKim announced the inquiry will focus on the impact of market concentration on food prices and the pattern of pricing strategies. Senator McKim referenced the market power held by what he describes as the “duopoly” of Coles and Woolworths.

The inquiry proposed by the Greens sets out nine terms of reference, including:

• the effect of market concentration and the exercise of corporate power on the price of food and groceries;
• the pattern of price setting between the two major supermarket chains; and
• the contribution of home brand products to the concentration of corporate power.

The inquiry will move through the Senate this week.

ASIC announces 2024 enforcement priorities

Date: 24 November 2023
Source: Australian Securities and Investments Commission

Summary originally published by Capital Monitor.

ASIC announced its enforcement priorities for 2024, indicating its enforcement focus for the coming year and communicating its intent to industry and stakeholders. In 2024, two new priorities have been added in relation to the superannuation industry, including a focus on member services failures and misconduct relating to the erosion of superannuation balances. New priorities relating to insurance claims handling, compliance with financial hardship obligations and the reportable situation regime have also been added. In addition, ASIC will be taking action against misconduct relating to used car financing to vulnerable consumers and gatekeepers such as auditors, registered liquidators and financial services and credit licensees who do not comply with their legal obligations.

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Hungry Jack’s trade mark not deceptively similar to McDonald’s mark, found to breach ACL (McD Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412)

Date: 20 November 2023
Court: Federal Court of Australia 
Judge(s): Burley J
Judgment date: 16 November 2023 
Catchwords: Trade marks – Application for cancellation – Infringement – Deceptive similarity

Abstract:

Mcd Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412 involved a trade mark dispute where the Applicants (collectively referred to as McDonald’s) alleged that the Respondent (Hungry Jack’s) infringed upon two registered trade marks through the usage of two deceptively similar marks. Burley J found that the infringement case failed, as BIG JACK and BIG MAC are not deceptively similar; nor were MEGA JACK and MEGA MAC. However, Hungry Jacks was found to have engaged in misleading and deceptive conduct in breach of s 18 of the Australian Consumer Law when it represented its burger contained 25% more Australian Beef.

Retail clients compensated over $17.4 million following breaches of financial services laws by OTC derivative issuers

Date: 9 November 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

The Australian Securities and Investments Commission (ASIC) has overseen over $17.4 million in combined compensation payments to more than 2,000 retail clients affected by breaches of financial services laws by eight retail over-the-counter (OTC) derivative issuers.

Since March 2021, approximately $4.3 million in compensation has been paid to over 1,500 retail clients of the following contracts for difference (CFD) issuers: Capital Com Australia Pty Ltd, CMC Markets Asia Pacific Pty Ltd, Eightcap Pty Ltd, IG Australia (IG Markets Limited and IG Australia Pty Ltd), Pepperstone Group Limited, Saxo Capital Markets (Australia) Limited, and StoneX Financial Pty Ltd trading as City Index.

The affected clients suffered losses on more than 150,000 CFD trades across 100 different CFD instruments which exceeded the leverage ratio limits prescribed by the ASIC Corporations (Product Intervention Order – Contracts for Difference) Instrument 2020/986. The CFD issuers self-reported the breaches, identifying the underlying causes to be change management weaknesses and manual errors, and undertook remediation programs. ASIC reviewed the compensation paid by the CFD issuers, prompting four issuers to agree to pay additional compensation of $2.8 million.

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Further modernising business communications measures for corporations, competition, consumer, superannuation and insurance sectors

Date: 30 October 2023
Source: Federal Register of Legislation

Abstract:

The Governor-General has issued the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Commencement Proclamation 2023 (Cth) (Proclamation) to prescribe 1 January 2024 as the start date for the modernised publication measures under the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023 (Cth) (Modernising Business Communications Act).

The Governor-General has also made the Treasury Laws Amendment (Modernising Business Communications) Regulations 2023 (Cth) (Amendment Regulations) to modify corporations, consumer credit, insurance and superannuation regulations in line with the Modernising Business Communications Act.

Proclamation

The Proclamation fixes 1 January 2024 as the start date for the modernisation of certain publication requirements in the Corporations Act 2001 (Cth) (Corporations Act), the Competition and Consumer Act 2010 (Cth) (CCA) and other legislation, as set out in Pt 4, Sch 1 of the Modernising Business Communications Act.

Joint ACCC/OAIC Compliance and Enforcement Policy for the Consumer Data Right

Date: 25 October 2023
Source: Office of the Australian Information Commissioner (OAIC)

The Australian Competition Consumer Commission (ACCC) and the Office of the Australian Information Commissioner (OAIC) have published a joint policy to outline their approach toward compliance and enforcement of the Consumer Data Right (CDR).

The CDR allows consumers to have more control over their personal data held by businesses and how this data is shared. The CDR regulatory framework consists of:

• Core provisions under the Competition and Consumer Act 2010 (Cth), the Privacy Act 1988 (Cth) and the Australian Information Commissioner Act 2010 (Cth);
• Rules made under legislation (Rules);
• the Competition and Consumer Regulations 2010 (Cth); and
• Consumer Data Standards made under the Rules.

The OAIC and ACCC will encourage and monitor compliance with the CDR through consumer complaints, mandatory reporting from businesses who hold consumer data, and audits, assessments and information requests for further compliance information.

The OAIC and ACCC will separately exercise discretion for enforcement, giving priority to matters causing harm to the greater CDR regime, widespread detriment to CDR consumers or vulnerable consumers and other conduct of significant public interest. Examples of conduct that are enforcement priorities include…

Jeep distributor undertakes to improve complaints handling for consumer guarantee claims

Date: 25 October 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

The Australian Competition and Consumer Commission (ACCC) has accepted a court-enforceable undertaking given by Stellantis (Australia and New Zealand) Pty Ltd (Stellantis) under s 87B of the Competition and Consumer Act 2010 (Cth). Stellantis, the importer and distributor of Jeep vehicles in Australia, has committed to improving the way it handles consumer guarantee complaints.

Under the Australian Consumer Law (ACL), there are certain consumer guarantees that apply to the sale of new and used vehicles, and remedies for breach of these guarantees. The ACCC received many consumer complaints about Stellantis’ complaints-handling process, including lengthy delays in obtaining a remedy, vehicles requiring multiple repairs for the same issue, and delays in spare parts being provided. Stellantis acknowledged the ACCC’s concerns that its staff may lack understanding about the company’s ACL obligations due to deficient internal policies.

Stellantis has undertaken to review and improve its complaints-handling procedures and staff training to ensure that consumers who experience a ‘major failure’ with their vehicle are given the refunds or replacements that they are entitled to.

ASIC revises licensee obligations under the reportable situations regime

Date: 24 October 2023
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

The Australian Securities & Investments Commission (ASIC) has made the ASIC Corporations and Credit (Amendment) Instrument 2023/589 (Instrument), which enacts key alterations to the reportable situations regime. Under the prior regime, Australian financial services (AFS) licensees and Australian credit licensees were mandated to notify ASIC regarding certain reportable situations, particularly ‘significant’ infringements of ‘core obligations’ under s 912D of the Corporations Act 2001 (Cth) (Corporations Act) and s 50A of the National Consumer Credit Protection Act 2009 (Cth).

Under the Instrument , certain breaches relating to misleading or deceptive conduct under subsection 1041H(1) of the Corporations Act and subsection 12DA(1) of the Australian Securities and Investments Commission Act 2001, and false or misleading misrepresentations under s12DB(1) of the ASIC Act, are no longer considered significant breaches of core obligations requiring reporting. For a breach to be eligible for these exemptions, it should:

• Affect only a single individual or those jointly involved in financial or credit-related products;
• Not cause, nor be likely cause, financial harm to anyone, irrespective of potential remediation ; and
• Not lead to or likely lead to another reportable scenario.

ACCC/AER annual report summarises annual enforcement outcomes

Date: 24 October 2023
Source: Australian Competition and Consumer Commission

The Australian Competition and Consumer Commission (ACCC) and Australian Energy Regulator have released their annual report for 2022–2023 which highlights the performance of both regulators in their enforcement of Australia’s competition, consumer and electricity and gas laws. The information contained in the report demonstrates the ACCC’s continued commitment to its compliance and enforcement priorities.

Competition law enforcement

In 2022–2023, the ACCC:

• assessed 305 mergers and 23 non-merger authorisation applications;
• commenced 11 court cases with 14 court cases continuing;
• completed 19 in-depth competition investigations;
• increased activity for Consumer Data Right, accrediting 40 data recipients; and
• continued focus on cartel conduct, including litigation involving Alkaloids of Australia, BlueScope Steel and Bingo Industries.

Consumer law enforcement

The ACCC also continued rigorous enforcement of consumer laws, including:

• product safety monitoring with 2,586 mandatory injury reports assessed;
• achieving 6.95 million ScamWatch website views; and
• completing 48 in-depth Australian Consumer Law and industry code investigations.

View the ACCC annual report 2022–23 here.

Nutrano pays $24,850 in penalties for alleged Horticulture Code breaches

Date: 23 October 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

Seven Fields Operations Pty Ltd, a fruit grower and trader trading as Nutrano, has paid penalties totalling $24,850 in response to two infringement notices issued by the Australian Competition and Consumer Commission (ACCC). The ACCC alleged that Nutrano contravened s 51ACB of the Competition and Consumer Act 2010 (Cth) by breaching clauses 12(1) and 29(1) of the Horticulture Code, a mandatory industry code set out in the Competition and Consumer (Industry Codes—Horticulture) Regulations 2017 (Cth).

The ACCC undertook an investigation after receiving complaints from citrus growers about the lack of transparency regarding the price Nutrano paid them for their produce and the timing of final payments.

The ACCC alleged that Nutrano failed to specify the price it received for produce in grower statements and traded under Horticulture Produce Agreements (HPAs) which failed to adequately specify the quality requirements and specifications that would be used to determine the quality of a grower’s produce, in contravention of the Horticulture Code. Nutrano’s HPAs also contained clauses that were potentially unfair within the meaning of the Australian Consumer Law, including clauses giving Nutrano absolute discretion to change the produce specifications.

Key findings from OAIC annual report 2022-23

Date: 19 October 2023
Source: Office of the Australian Information Commissioner (OAIC)

Abstract:

The Office of the Australian Information Commissioner (OAIC) has published its annual report for 2022-23 (Report), which highlights the work undertaken by the OAIC to uphold privacy and information access rights. The OAIC’s regulatory activities include conducting investigations, handling complaints, reviewing decisions made under the Freedom of Information Act 1982 (Cth), monitoring agency administration, and providing advice to the government and the community.

Ticketek pays $515,040 penalty for repeat spam breaches

Date: 19 October 2023
Source: Australian Communications and Media Authority (ACMA)

Abstract:

Ticketek Pty Ltd (Ticketek) has paid a $515,040 penalty in response to an infringement notice issued by the Australian Communications and Media Authority (ACMA) following an investigation that found that Ticketek had sent 98,000 texts and emails in breach of s 16(1) the Spam Act 2003 (Cth) (Spam Act).

ACMA has alleged that throughout 2022, Ticketek had sent around 41,000 marketing texts and emails without the consent of recipients and around 57,000 texts and emails to people who had previously unsubscribed. Despite being issued with a formal warning from ACMA in 2019, Ticketek continued to breach its obligations under the Spam Act.

Ticketek had mischaracterised some emails as being non-commercial because they contained event information for ticket holders. However, the emails also contained advertising material and promotions for upcoming events, meaning they were not exempt from spam rules and required consent to be sent.

ACMA has also accepted a three-year court-enforceable undertaking from Ticketek under s 38 of the Spam Act to report to ACMA and appoint an independent consultant to review and improve its compliance with spam rules.

ACCC Chair reiterates need for reform in Digital Future Summit address

Date: 18 October 2023
Source: Australian Competition and Consumer Commission

In an address at King and Wood Mallesons' Digital Future Summit on 17 October 2023, Chair of the Australian Competition and Consumer Commission (ACCC) Gina Cass-Gottlieb reiterated the need for regulatory reform to address competition and consumer issues identified by the ACCC in its digital platforms work, including its Digital Platform Services Inquiry. See our previous Latest Legal Update: Platform for change: ACCC reinforces calls for targeted regulation of digital platforms to address competition and consumer issues.

Ms Cass-Gottlieb restated some of the ACCC’s proposed reforms, noting that it is “critical [Australia has] fit-for-purpose regulatory tools that ensure effective and robust competition and consumer protection.”

X (formerly Twitter) fined $610,500 for shortfalls in measures to address child sexual abuse material

Date: 18 October 2023
Source: Australian Government eSafety Commissioner (ACMA)

Abstract:

After failing to comply with a legal notice given by the eSafety Commissioner in February 2023, X (formerly Twitter) has been issued with an infringement notice for $610,500 and has 28 days to pay the penalty or request a withdrawal. The Basic Online Safety Expectations (Expectations) under the Online Safety Act 2021 (Cth) require tech companies to answer questions about the measures taken to address child sexual abuse material. X did not provide any response, or provided inaccurate or incomplete responses, to important questions including:

• the time taken to respond to reports of child sexual exploitation;
• the measures in place to detect child sexual exploitation in livestreams;
• the tools and technologies used to detect child sexual exploitation material; and
• the number of safety and public policy staff employed after the acquisition and job cuts in October 2022.

Google has similarly failed to comply with the eSafety Commissioner’s notice, and has been issued a formal warning for providing generic responses to specific questions and providing aggregated information when asked questions about specific services.

ACMA takes action against two telcos for breaching anti-scam rules

Date: 18 October 2023
Source: Australian Communications and Media Authority (ACMA)

Abstract:

The Australian Communications and Media Authority (ACMA) has taken action against two telcos, Vonage Business Inc (Vonage) and Twilio Inc (Twilio), for allowing their customers to send SMS with text-based sender IDs (ie shortened business names) without sufficiently checking whether the sender IDs were being used to perpetrate scams, in breach of the with the Reducing Scam Calls and Scam SMs Code (Code).

ACMA audits and investigations revealed that:

• Vonage allowed over 11,780 non-compliant SMS to be sent, including 3,387 scam texts impersonating businesses such as Commonwealth Bank, ApplePay and Australia Post;
• Vonage failed to report to ACMA for three consecutive quarters the number of scam SMS it had blocked; and
• Twilio had inadequate systems in place to comply with the anti-scam rules, but there was no evidence that scammers took advantage of these vulnerabilities.

ACMA has formally directed these telcos to comply with the Code. Telcos that breach ACMA directions to comply with the Code face penalties of up to $250,000.

Australian telcos have reported blocking almost 257 million SMS scams since the anti-scam rules came into effect in July 2022.

Treasury consults on regulation of digital and crypto assets

Date: 17 October 2023
Source: The Treasury

Abstract:

The Federal Government has released a proposal paper that recommends making crypto exchanges and digital asset platforms subject to existing Australian financial services laws and requiring platform operators to obtain an Australian Financial Services Licence. The proposal paper also recommends requiring digital asset platforms adhere to minimum standards for holding tokens, standards for custody software, and standards when transacting in tokens. Feedback on the proposal paper is due by 1 December 2023, with further consultation on draft legislation planned for 2024.

In recent years, consumers have suffered harm and lost assets due to the collapse of crypto platforms. The proposed regulatory framework intends to increase oversight, protect consumers, support innovation, provide certainty in the industry, and ensure consistency with other jurisdictions.

The proposal paper discusses approaches to regulating digital asset intermediaries, licensing digital asset intermediaries, introducing minimum standards for facility contracts, and introducing minimum standards for ‘financialised functions’.

Tesla pays $155,460 in penalties for alleged breaches of button battery safety and information standards

Date: 12 October 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

Car manufacturer Tesla Motors Australia Pty Ltd (Tesla) has paid penalties totalling $155,460 in response to ten infringement notices issued by the Australian Competition and Consumer Commission (ACCC) for alleged breaches of mandatory button battery safety and information standards.

The ACCC alleged that Tesla failed to comply with both mandatory safety standards and mandatory information standards for products powered by button batteries in contravention of sections 106 and 136 the Australian Consumer Law. Between June 2022 and May 2023, Tesla supplied three models of Tesla key fobs (Model 3/Y, Model X and Model S) and two models of Tesla illuminated door sills (Model 3 and Model S) without conducting the required safety tests and providing mandatory safety warnings.

Button batteries, when ingested or inserted, can result in serious injury and death. The mandatory product and information standards for button batteries, which came into effect in Australia in June 2022, seek to mitigate the risk of injury and death caused by button batteries, especially for young children.

ACCC warns caravan industry against misleading price and caravan weight claims

Date: 12 October 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

The Australian Competition and Consumer Commission (ACCC) has put the caravan industry on notice that misleading representations are in contravention of the Australian Consumer Law (ACL) and may result in strong enforcement action.

In July 2022, the ACCC published the New caravan retailing: Ensuring industry compliance with the Australian Consumer Law report, which identified issues relating to the treatment of consumers and compliance with consumer law in the market for new caravans. The ACCC has continued to receive and investigate consumer complaints about caravans.

Some recent examples of misrepresentation include:

• statements about ‘price certainty’ in which the retailer told customers that the price of the caravan they ordered was fixed, but subsequently sought to increase the price while also giving the customer an option to cancel the contract; and
• inaccurate statements about the important features of the caravan, including weight and tonnage.

These caravan retailers have removed the false and misleading representations from their marketing materials and have committed to training their staff to improve compliance with the ACL.

Telecommunications Industry Ombudsman identifies consumer complaints in Annual Report 2022-23

Date: 11 October 2023
Source: Telecommunications Industry Ombudsman (TIO)

Abstract:

The Telecommunications Industry Ombudsman (TIO) has released its Annual Report 2022-23 (Report), outlining top complaints made by consumers and small businesses about phone, internet and landline services. In the financial year ending 30 June 2023, the TIO received 66,388 complaints from consumers and small businesses (a decrease of 16.5% from the previous year).

Key findings from the Report include:

• Complaints about mobile services accounted for 48% of all complaints (the highest proportion in 6 years).
• For all service types, there was an increase in complaints in relation to poor customer service, failure to cancel a service, inadequate fault testing, and non-financial loss (including delays, stress and inconvenience). There was a decrease in complaints about service and equipment fees, intermittent service or drop outs, slow data speed, and other common issues.
• The TIO received 29.5% more complaints about Optus than in the previous financial year (a total of 20,323 complaints), largely in relation to the Optus data breach in September 2022.
• There were 1,634 complaints relating to financial hardship (an increase of 1.2%), with a majority these complaints being from residential consumers who experienced issues with their mobile service

New mandatory safety standard protecting young children from choking hazards

Date: 6 October 2023
Source: Product Safety Australia, Australian Competition & Consumer Commission (ACCC)

Abstract:

Following consultation and advice from the Australian Competition & Consumer Commission (ACCC), the Albanese Government has approved a new mandatory safety standard for toys marketed at children under three years of age. The mandatory standard, set out in the Consumer Goods (Toys for Children up to and including 36 Months of Age) Safety Standard 2023 (Cth) (Standard), seeks to minimise the risk of choking and suffocation for small children.

Every year in Australia, approximately 2,500 young children present to hospital emergency departments due to injuries from dangerous or unsuitable toys. These toys often include rattles, teethers, dummies, and other toys that have small parts.

The Standard introduces strict design, construction, and testing requirements for all toys that are manufactured, designed, labelled, and marketed as playthings for children up to and including 36 months of age. The requirements ensure that toys do not contain small parts that can come loose during play or after reasonable wear and tear, aiming to prevent choking, suffocation, and death. The Standard also requires toys that contain button batteries to have secured battery compartments only accessible by a tool.

Telecommunications Amendment (Disclosure of Information for the Purpose of Cyber Security) Regulations 2023 (Cth)

Date: 5 October 2023
Source: Federal Register of Legislation
Jurisdiction: Commonwealth
Status: Commenced

Abstract:

The Telecommunications Amendment (Disclosure of Information for the Purpose of Cyber Security) Regulations 2023 commenced on 30 September 2023, extending the operation of sections 15A and 15B of the Telecommunications Regulations 2021 for a further twelve months. This will allow the Australian government additional time to weigh the ongoing appropriateness and effectiveness of the regulations and to implement a more permanent solution in primary legislation.

These sections allow the disclosure of information or documents to financial services entities (s 15A) or government entities (15B), circumventing the prohibitions contained in s 276 of the Telecommunications Act 1997, if it is for the purpose of cyber security. Sections 15A(2) and 15B(2) provide the specified circumstances that must be present for the disclosure to be allowable under the regulations.

The amendment also changes the form by which the Minister for Communications may specify additional types of information or documents as disclosable under the sections, from a notifiable instrument form to a legislative instrument form.

ASIC appeals Federal Court findings in case against ACBF Funeral Plans

Date: 4 October 2023
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

In September 2023, the Federal Court of Australia ordered ACBF Funeral Plans Pty Ltd (ACBF) to pay a $1.2 million penalty for misrepresenting the sale and promotion of a funeral expense insurance policy (ACF Plan) to consumers, primarily Indigenous people, in contravention of ss 12DA(1), 12DB(1)(a) and 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) (ACBF Funeral Plans Pty Ltd [2023] FCA 1041; BC202312500). See our previous Latest Legal Update here.

The court accepted the Australian Securities & Investments Commission’s (ASIC) claim that ACBF, by offering, promoting and selling the ACF Plan and representing that the ACF Plan provided a lump sum payout, had engaged in conduct that was misleading or deceptive and had made false or misleading representations. ASIC also alleged that ACBF falsely represented that it was owned or managed by Indigenous persons. Dismissing this claim, the court found that ACBF did make such representations, but that the representations were not false. ASIC is appealing this part of the decision.

ASIC Action Against Cigno Australia and BSF Solutions for Alleged Unlicensed Credit Operations

Date: 4 October 2023
Source: Australian Securities & Investments Commission (‘ASIC’)

Abstract:

The Australian Securities and Investments Commission (ASIC) has initiated civil penalty proceedings against Cigno Australia Pty Ltd (Cigno) and BSF Solutions Pty Ltd (BSF), and their respective directors, concerning allegations of unlicensed credit activity.

Between July and December 2022, ASIC claims that the two companies provided short-term credit to over 100,000 consumers through a 'No Upfront Charge Loan Model' without holding valid Australian credit licenses. Under this scheme, consumers were charged excessive fees, sometimes amounting to more than 600% of the total loan value, which is in violation of the National Consumer Credit Protection Act 2009 (Cth). ASIC is concerned that this lending model was intentionally designed to circumvent consumer protection laws, allowing the companies to impose substantial fees on vulnerable and financially distressed consumers.

Moreover, ASIC also alleges that Cigno and BSF charged consumers over $70 million in fees while providing more than $34 million in loans without the requisite licenses. ASIC also believes that both directors participated in these unauthorised credit operations.

Government responds to Privacy Act Review Report

Date: 29 September 2023
Source: Australian Government Attorney-General’s Department

On 28 September 2023, the Australian Government responded to the Privacy Act Review Report (Report) released by the Attorney-General in February 2023 after nearly three years of extensive consultation. The Report reviews the scope and application of the Privacy Act 1988 (Cth) (Privacy Act), including whether the Privacy Act is fit for purpose and whether individuals should have direct rights of action to enforce privacy obligations, among other issues of protection, regulation, and enforcement.

Of the 116 proposals in the Report, the Government agrees to 38 proposals, agrees in-principle to 68 proposals and notes 10 proposals. ‘Agrees in-principle’ indicates that the Government would like to conduct a comprehensive impact analysis and further engagement before making a final decision on the implementation of the proposals.

Fintech company pays $53,280 penalty for potentially misleading representations about crypto product

Date: 27 September 2023
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

Bobbob Pty Ltd (Bobbob), a fintech company, has paid $53,280 in response to four infringement notices issued by the Australian Securities & Investments Commission (ASIC). ASIC was concerned that Bobbob was making certain representations about a crypto-asset linked investment product (product) that had the potential to mislead consumers about the product’s approvals, risks, characteristics and benefits.

In the infringement notices, ASIC stated that it had reasonable grounds to believe that Bobbob had contravened s 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) by making false or misleading representations about:

• whether the product was approved or licensed by ASIC;
• the similarity of the product to a bank account, including the risk profile;
• whether the product was a safe and stable investment with minimal risk of capital loss; and
• whether the product earned all customers an interest rate of 7.6% per annum from the time they invested.

The product was offered between April and December 2022. During this time, approximately 700 customers deposited funds totalling $1.6 million. Bobbob has since returned all funds to customers (with interest).