Latest in competition and consumer law 7 min read
The Full Federal Court has upheld an appeal lodged by the ACCC finding that workplace relations advisor, Employsure Pty Ltd, breached the Australian Consumer Law by making misleading representations that it was, or was affiliated with, a government agency.
The Federal Court has ordered Decathlon to pay $1.5 million in penalties for contravening the Australian Consumer Law by selling sports and recreation goods that did not comply with the applicable mandatory safety standards.
The ACCC has commenced proceedings against Mercedes-Benz for allegedly failing to comply with their obligations under a compulsory recall of defective Takata airbags.
The Federal Court has found that former training college Phoenix Institute of Australia Pty Ltd and its marketing arm, Community Training Initiatives Pty Ltd, made false or misleading representations and implemented systems of unconscionable conduct in relation to online diploma courses.
The ACCC has authorised Country Press Australia and its members to collectively negotiate with Google and Facebook about payments for their news content published on the platforms.
The ACCC has instituted proceedings against Telstra, Optus and TPG for allegedly making false or misleading representations in relation to the promotion of some NBN plans.
Between August 2016 to August 2018, Employsure's Google Ads appeared in response to Google searches for keywords such as 'fair work commission', 'fair work Australia' and 'fair work ombudsman', and contained headlines such as 'Fair Work Ombudsman Help - Free 24/7 Employer Advice'.
In earlier proceedings (as reported previously in In Touch), the Federal Court dismissed the ACCC's allegations that the Google Ads falsely represented that Employsure was, or was affiliated with, a government agency.
The Full Federal Court unanimously overturned this decision finding that:
- Employsure's use of Google’s 'dynamic keyword insertion' service and selection of government agency names as keywords meant the headline of each Google Ad gave the false impression that the help or advice would be provided by the named agency;
- the false impression was furthered by the fact that Employsure was not mentioned in the Google Ads and there was no clarification that the advice was, in fact, not provided by the named government agency, but by a private company;
- advertising the 'help' and 'advice' as being 'free' supported the impression that the service was provided by the government agency named in the headline; and
- the display of URLs such as 'www.fairworkhelp.com.au/Fair-Work/Australia' and 'www.fairworkhelp.com.au/Fair-Work/Commission' immediately under the headlines further supported the impression that the free advice would be provided by the government agency named in the headline.
See our detailed Insight for more on the implications of this case.
On 17 August 2021, the Federal Court ordered Decathlon (Australia) Pty Ltd (Decathlon) to pay $1.5 million in penalties for contravening the Australian Consumer Law by selling sports and recreation goods that did not comply with the applicable mandatory safety standards.
Decathlon admitted that between 1 January 2016 and 15 December 2019, it sold basketball rings, backboards and portable swimming pools that were not accompanied by appropriate safety labelling, consumer warnings and installation and use instructions. In addition, Decathlon admitted that the installation instructions accompanying its basketball rings and backboards products contained false or misleading representations about the ability to affix those products to brick walls.
In the proceedings, the ACCC submitted that the appropriate pecuniary penalty was $3.5 million. Decathlon argued that this sum was excessive and inappropriate, and instead submitted that $800,000 was more appropriate.
The court considered the sum of $1.5 million to be the appropriate penalty taking into account:
- the relatively modest profits made by Decathlon from the sale of the relevant products;
- the fact that Decathlon was 'careless' in supplying the non-compliant products but was not reckless;
- Decathlon's failure to take effective and timely action in response to the ACCC's concerns;
- Decathlon's willingness to cooperate with the ACCC in relation to the proceedings and the steps it has since taken to improve compliance with the relevant safety standards (including establishing a compliance committee, employing additional staff with relevant expertise and engaging an outside consultant to provide advice in relation to compliance issues);
- the fact that the relevant products may have complied with European safety standards; and
- the need for general deterrence in relation to mandatory safety standards, especially in relation to products that are to be supplied for use by children.
ACCC commences proceedings against Mercedes-Benz for attempting to 'cushion the blow' on the compulsory recall of Takata airbags
On 4 August 2021, the ACCC commenced proceedings against Mercedes-Benz for allegedly failing to comply with its obligations under a compulsory recall of defective Takata airbags.
The recall notice required suppliers of the airbags to communicate with customers in a way that emphasised the danger of the Takata airbags (particularly the risk of serious injury or death), and the urgency of replacing the airbags.
The ACCC alleged that Mercedes-Benz contravened the compulsory recall notice by minimising the risks associated with the defective Takata airbags in communications with customers, and failing to use attention-capturing, high-impact language to prevent customers ignoring the recall notices. For example, it is alleged that customers were told the 'recall was more a precautionary measure' and that they were 'still okay to drive [the affected] vehicle up until the point of completion of [the] recall'.
The ACCC is seeking declarations, pecuniary penalties, an order requiring a product recall compliance program, and costs.
Taught a lesson: Federal Court determines Phoenix Institute acted unconscionably and misled students
On 13 August 2021, the Federal Court found that former training college Phoenix Institute of Australia Pty Ltd (Phoenix) and its marketing arm, Community Training Initiatives Pty Ltd (CTI), made false or misleading representations and implemented systems of unconscionable conduct in relation to online diploma courses.
Phoenix and CTI were found to have misled consumers and acted unconscionably in marketing to students and enrolling them in online diploma courses under the VET FEE-HELP loan program.
Between mid-January and mid-November 2015, at least 11,393 consumers were enrolled in online courses with Phoenix, with only nine of those consumers formally completing their online course. Many of the consumers were unaware they were enrolled, and many remained enrolled after requesting cancellation.
Phoenix and CTI achieved this by misleading consumers into thinking the courses were free, and offering them 'free' laptops for enrolling. They also paid large commissions to sales agents for signing up customers, but failed to properly train and monitor those agents. Furthermore, Phoenix and CTI enrolled students without properly assessing their eligibility or suitability for the course, their capacity to speak English, or even whether they intended to undertake the course.
This is the ACCC's fifth action in which the court has found that a VET FEE-HELP provider has engaged in misleading and unconscionable conduct.
The court will decide on penalties at a later date.
On 5 August 2021, the ACCC authorised Country Press Australia (CPA) and its members to collectively negotiate with Google and Facebook about payments for their news content published on the platforms.
This follows the interim authorisation granted to CPA and its members in April this year.
The authorisation will span for a period of 10 years, allowing CPA to collectively bargain without breaching competition laws. Ultimately, such conduct may be exempt from the Competition and Consumer Act under the News Media and Digital Platforms Mandatory Bargaining Code (the Code), which includes an exemption for registered news businesses to collectively bargain with designated digital platforms. Legislation enacting the Code was passed in February this year, but the operative provisions of the Code have not yet come into effect.
Not so fast: ACCC commences proceedings against Telstra, Optus and TPG for allegedly misleading consumers about NBN maximum speeds
On 9 August 2021, the ACCC commenced proceedings against Telstra, Optus and TPG for allegedly making false or misleading representations in relation to the promotion of some NBN plans.
Telstra, Optus and TPG have agreed to compensate customers.
The ACCC is seeking orders including declarations, injunctions, pecuniary penalties, publication orders and the implementation of compliance programs.