INSIGHT

Furniture retailers punished for 'was/now' pricing claims; Mazda faces allegations of consumer law failings; and location data under the lens in ACCC case against Google

By Jacqueline Downes
Competition law

In brief 5 min read

Furniture retailers fined for false 'was/now' pricing claims; Mazda defends claims of unconscionable conduct and false or misleading representations over faulty vehicles; Unique ordered to pay millions in damages over its funded diploma courses; ACCC presses Google on its policies relating to location data; and ACCC approves ANZ Terminals' acquisition of GrainCorp Bulk Liquid Terminals.

ACCC furnishes retailers with fines for false 'was/now' prices

On 1 November 2019, the ACCC announced that furniture retailers, Plush, Koala Living, Early Settler and Oz Design Furniture, have each paid a fine of $12,600 for false and misleading statements in their advertising of sale or discounted items. Following an investigation into the furniture industry's use of 'was / now' comparison pricing, the ACCC issued infringement notices to these retailers for advertising incorrect or misleading 'was' prices for certain items, which may have led consumers to believe they were saving money.

The ACCC has alleged these retailers used 'was' prices or made savings representations when the furniture item had never been advertised at the 'was' price, or was only advertised at that price for a short period of time. A specific example cited by the ACCC is the advertisement of a ‘Roller Ottoman’ at a price of $539 with the words ‘save $360’, even though it was available for $449 directly before the sale.

The ACCC's guidance on comparison price advertising goes further and states that the advertised price is not the end of the enquiry. The ACCC recommends businesses should still exercise caution if none or very few of its products were sold at the 'was' price, as businesses must be able to show that the relevant consumers would have bought the product at the 'was' or 'strikethrough' price. This may be problematic if the business has an established practice of in-store discounting.

ACCC Commissioner Sarah Court stated that these penalties would send a 'strong message' to retailers about their use of comparison price advertising.

ACCC drives forward case against Mazda for consumer law failures

The ACCC has commenced proceedings in the Federal Court against Mazda Australia Pty Ltd (Mazda) in relation to alleged unconscionable conduct and false or misleading representations made to consumers about faulty Mazda vehicles.

The ACCC's case centres on various faults in Mazda vehicles experienced by consumers which affected their ability to use their vehicle, including in some cases, an unexpected loss of power while driving. The ACCC claims that despite the customers taking their vehicles to dealers for repair, during which time they were unable to use their vehicles (often for lengthy periods), some consumers continued to experience the same or other faults with their vehicle. The ACCC alleges that when the consumers contacted Mazda to request a refund or replacement vehicle at no cost, their requests were rejected by Mazda.

The ACCC is seeking penalties, declarations, injunctions, consumer redress, a publication order, an order requiring the implementation of a compliance program and costs.

Unique taught a lesson for unconscionable conduct

Unique International College Pty Ltd (Unique) has been ordered to pay $4.165 million in penalties by the Federal Court for unconscionable conduct and false and misleading representations made to a number of consumers in relation to the VET FEE-HELP Commonwealth funded diploma courses.

In 2017, the Federal Court ruled that Unique's marketing and selling of VET FEE-HELP funded diploma courses to disadvantaged and vulnerable consumers amounted to unconscionable conduct, misleading or deceptive conduct and breached the unsolicited consumer agreement provisions of the Australian Consumer Law (ACL). Unique sold these courses, which cost up to $22,000 per course, to consumers in remote communities and low socio-economic areas, including Indigenous communities, in New South Wales, Victoria and Queensland. In some cases the consumers were led to believe the course was free, when in fact they would incur a sizeable debt, and were given gifts such as laptops to encourage them to sign up.

The current judgment follows a successful appeal by Unique in 2018 against the finding of systemic unconscionable conduct to narrow the case down to claims by specific consumers. The penalties therefore relate to various breaches of the ACL in respect of six consumers only.

Location data under the lens in ACCC case against Google 

The ACCC has commenced proceedings against Google in the Federal Court, alleging it engaged in misleading conduct and made false or misleading representations to consumers about how and when it collects, keeps and uses their location-related personal information. It is the first case brought worldwide to probe Google's approach to location data collection, and highlights the increased focus on consumer awareness of personal data use in digital markets.

The case concerns two Google Account settings: 'Location History' and 'Web & App Activity', which enable users to control whether Google obtains, keeps and uses personal data relating to their location when using Google services. To stop Google collecting and retaining location data, both settings had to be switched off by users. However, the ACCC alleges that at certain times, Google misled consumers by not properly disclosing this fact to its users and by making on-screen representations that led users to understand the 'Location History' setting was the only one controlling whether location data was being collected. The ACCC also claims Google failed to disclose to users that it may use the location data for its own purposes, including for advertising. The ACCC alleges that as a result, consumers were deprived of the ability to make an informed choice about the collection and use of their personal location data.

The ACCC is seeking penalties, declarations and orders requiring the publication of corrective notices and the establishment of a compliance program. Google has expressed its intention to defend the ACCC's claim.

See our more detailed analysis of the allegations here.

No longer terminal: ACCC approves GrainCorp acquisition after undertaking

The ACCC has decided it will not oppose ANZ Terminals’ proposed acquisition of GrainCorp Bulk Liquid Terminals.

GrainCorp Bulk Liquid Terminals - a wholly-owned subsidiary of GrainCorp - stores and handles bulk liquids, including edible fats/oils, chemicals and petroleum. ANZ Terminals offers storage and handling services in Australia for a range of similar products.

The ACCC focused on the competitive impacts of the proposed acquisition on the supply of port-side bulk liquid storage services in South Australia, Victoria and New South Wales, where ANZ Terminals and GrainCorp both provide these services. It found significant competition concerns, particularly in NSW and South Australia, which are highly concentrated markets. It was also concerned about the impact in Melbourne, where GrainCorp and ANZ Terminals are the two largest providers of non-fuel bulk liquid storage in the Port of Melbourne.

The ACCC decided not to oppose the acquisition, however, as ANZ Terminals agreed to exclude GrainCorp’s bulk liquid facility at Port Kembla from the transaction and provided a court-enforceable undertaking, stipulating it would:

  • divest its Osborne facility in South Australia to a purchaser to be approved by the ACCC; and
  • not lease any more of the limited land remaining at the Port of Melbourne’s Coode Island without receiving ACCC clearance to do so.