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COVID-19 and competition and consumer law issues; Yoghurta pay: ACCC fines Queensland Yoghurt Company; Hot off the press: ACCC releases concept paper on news media bargaining code; Holden agrees to reduce speed of engagement with dealers over compensation; That's a RAAP! ACCC Consumer Data Right accreditation platform now live; Voltaren claims didn't gel with the Federal Court; and EB Games to refund customers after not playing fair.
ACCC allows cooperation in retail tenancies
On 19 May 2020, the ACCC granted conditional interim authorisation to the National Retail Association and its participating industry organisations and their members who are tenants, landlords or both. The interim authorisation will enable:
- tenants who have been adversely affected by the COVID-19 pandemic to discuss, share information and collectively negotiate with landlords regarding the support to be provided to tenants by landlords; and
- landlords to discuss and share information, and make and give effect to agreements as to the nature of the relief to be offered to small and medium-sized enterprise tenants or classes of SME tenants by landlords.
Medical oxygen suppliers seek breathing room to coordinate supply
On 21 May 2020, the Australia New Zealand Industrial Gas Association applied for authorisation for its members and other suppliers of medical oxygen to exchange information and make contracts, arrangements and understandings with each other as to the supply of medical oxygen to hospitals and similar medical facilities for a period of 12 months.
The applicants anticipate there could be a significant increase in demand for medical oxygen as a result of COVID-19, and demand could be expected to be highly concentrated in the event of an outbreak.
The purpose of the authorisation sought is to allow medical oxygen suppliers to assist each other and jointly plan the most efficient way to ensure security of supply during the COVID‑19 pandemic. The conduct would be closely supervised by the ACCC.
Queensland Yoghurt Company Pty Ltd (QYC) was fined $12,600 by the ACCC for allegedly misleading consumers by omitting to disclose gelatine in its ingredient list in some of its yoghurt products. The ACCC alleged that from at least 2 July 2019, QYC failed to disclose the presence of gelatine (or the compound ingredient CFT-1 of which gelatine was a component) in its Queensland Yoghurt products, where gelatine was in fact an ingredient.
The ACCC noted this may be of particular concern to consumers who have chosen to not consume gelatine for dietary, religious, environmental or ethical reasons. The ACCC was also concerned that QYC may not have been competing fairly in the market, by being able to offer a more attractive product which was represented as being free from gelatine.
QYC has committed to amend its products' statement of ingredients by the end of May 2020.
This serves as a reminder to food manufacturers to ensure their product labels provide accurate information regarding a product’s ingredients, especially as misleading representations relating to foods are a 2020 enforcement priority area for the ACCC.
As directed by the Federal Government, the ACCC has commenced its work on developing a new mandatory code to address bargaining power imbalances between Australia’s news media businesses and digital platforms (primarily Google and Facebook) (the Code). The objective of the Code is to ensure that the commercial relationships between these parties do not undermine the ability and incentives for news media businesses to produce news to Australians. The Code is intended to cover data sharing arrangements, ranking and display of news content, and monetisation and revenue-sharing arrangements in relation to news.
On 19 May 2020, the ACCC released a concept paper which sets out a range of issues on which the ACCC is seeking feedback and information from relevant stakeholders, primarily relating to the scope and mechanisms of the Code. The ACCC did not seek submissions on whether the Code is required. The issues addressed in the concept paper include:
- how to create an effective bargaining framework, which would allow news media businesses to achieve outcomes consistent with those that would be achieved in the absence of the bargaining power imbalance;
- how to deal with digital platform algorithmic changes. The ACCC observed that the Code should include mechanisms requiring digital platforms to provide advance notice to news media businesses, so that they have sufficient time to amend their business strategies in light of an algorithm change;
- the difficulties of identifying and prioritising original news content. The ACCC noted that consideration may be given to include mechanisms in which news content and investigative journalism can be signalled as being 'original';
- whether paywalled news content and alternative news media business models should be treated a certain way. The ACCC noted this would involve detailed consideration of how those requirements would interact with the general operation of digital platforms' ranking algorithms; and
- whether policies and practices affecting the display and presentation of news should be included in the Code.
Submissions on the concept paper closed on 5 June.
The ACCC expects to publish a draft code for public consultation before the end of July 2020, with a final code to be settled soon thereafter.
On 22 May 2020, the ACCC announced that Holden has committed to negotiate with its 185 Australian dealers in good faith about compensation for its withdrawal from the Australian market, following pressure from the ACCC for Holden to extend the deadline for acceptance of its compensation offer and to engage in good faith negotiations with dealers.
The ACCC had received complaints that Holden was placing undue pressure on dealers by imposing an unnecessary deadline for acceptance of its proposed compensation package. This meant dealers would have had to decide whether to accept the compensation package before having a proper opportunity to negotiate with Holden or complete a dispute resolution process. The ACCC was concerned that this conduct may raise concerns under the good faith obligations of the Franchising Code of Conduct and the unconscionable conduct provisions of the Australian Consumer Law.
ACCC Chair Rod Sims said, 'We expect Holden to negotiate fairly with dealers who have represented the Holden brand in Australia for decades. We will continue to closely monitor Holden’s commitment to engage in good faith negotiations.'
On 26 May 2020, the ACCC launched the Consumer Data Right Register and Accreditation Application Platform (RAAP). This marks another milestone in the ACCC's Consumer Data Right project, which aims to give consumers greater access to, and control over, data held by businesses.
The purpose of the RAAP is two-fold. First, it provides a safe portal where approved participants can exchange encrypted data within the Consumer Data Right Regime. Second, it allows businesses to apply to be accredited, although accreditation is currently only available to banks and fintech businesses.
The ACCC has also published the Consumer Data Right Accreditation Guidelines to assist applicants with the accreditation process.
Consumer data sharing obligations will commence for the Big 4 banks on 1 July 2020. Non-major banks will follow from 1 July 2021 or 1 November 2021, depending on accreditation status.
Following agreed admission made by the parties, on 28 May 2020 the Federal Court ordered Novartis Consumer Health Australia (Novartis) and GlaxoSmithKline Consumer Healthcare Australia (GSK) to pay $4.5 million over false or misleading representations in the marketing of Voltaren Osteo Gel and Voltaren Emulgel pain relief products.
From January 2012 to March 2017, Novartis and GSK marketed Osteo Gel as being specifically formulated to treat osteoarthritis-related pain and inflammation, even though both Osteo Gel and Emulgel had the same active ingredients and were, in essence, the same. Despite this, Osteo Gel was generally sold at a higher price than Emulgel, and the products were often displayed next to each other at participating retailers.
This case is similar to the enforcement action taken against Reckitt Benckiser in 2016. Reckitt Benckiser was fined $6 million for marketing its Nurofen Specific Pain products as being formulated to specifically treat a particular type of pain, when in fact they all contained the same active ingredients and were essentially the same in respect of their effectiveness to treat pain. In both cases, the ACCC seems to have been particularly concerned because the same product was sold at a higher price under a different brand.
EB Games has provided a court-enforceable undertaking to refund customers after acknowledging it is likely to have misled consumers about their consumer guarantee rights in relation to the online video game Fallout 76.
The ACCC was concerned that EB Games representatives had advised consumers they were not entitled to a refund after they complained of experiencing a range of faults with the Fallout 76 game, including problems with servers and bugs in the game.
This is not the first time Fallout 76 refunds have been in the ACCC's spotlight. On 31 October 2019, the ACCC accepted a court-enforceable undertaking from Fallout 76's publishers, ZeniMax Media Inc, ZeniMax Europe Limited and ZeniMax Australia Pty Ltd, after they acknowledged they were likely to have misled consumers about their consumer guarantee rights in relation to Fallout 76.