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In touch
 

Competition news

2 May 2019

 
Jacqueline Downes

Jacqueline Downes
Partner, Practice Leader, Competition
+61 2 9230 4850
Email Jacqueline

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In Touch looks at what's been happening in the Australian competition, consumer and regulatory world, and what it means for your business.

We hope you find this issue interesting and helpful. Please let us know if you would like us to investigate any competition news and, as always, feel free to get in touch with our team.

Australians scammed out of millions

The ACCC released its report on the types of scams Australians reported falling victim to in 2018. Investment scams swindled AU$86 million from Australians, with men the most common victims. Women, by contrast, were more vulnerable to dating and romance scams, which cost Australians AU$60.5 million, marking an increase of AU$18.5 million from 2017.

The report notes Western Union has agreed to pay the United States Department of Justice (DOJ) a penalty of US$586 million for aiding and abetting wire fraud. The DOJ is using this penalty to refund people worldwide who were tricked into paying scammers via Western Union. The ACCC has publicised that Australians who made payments to scammers via Western Union may be eligible for a refund through this program.

Australian 4WD Hire driven to court by the ACCC for ACL breaches

The ACCC has instituted proceedings against vehicle hire company Smart Corporation Pty Ltd (trading as Australian 4WD Hire) alleging the following consumer law breaches:

  • Unfair contract terms: The standard form contracts used by Australian 4WD Hire included terms allowing it to charge customers for a range of driving behaviours it claimed would lead to excessive wear and tear or damage to vehicles. GPS data was used to detect those behaviours. The ACCC alleges these terms are unfair as they allow customers to be charged for purported, rather than actual, vehicle damage.
  • Unconscionable conduct: Australian 4WD Hire is alleged to have acted unconscionably by withholding customers' security deposits for excessive wear and tear (based on GPS data rather than actual damage) and, where customers disputed this, threatening them with further charges, legal costs and referral to 'the authorities'.
  • False or misleading representations: Australian 4WD Hire's website included false or misleading representations that all rental vehicles would have the benefit of off-road insurance, when, in reality, more than half of its vehicles were only insured for third-party property damage.

The ACCC is seeking pecuniary penalties and compensation for customers, along with disqualification orders for the Fleet Manager and a director of Australian 4WD Hire.

Viagogo misleads consumers when reselling tickets for live events

The Federal Court has found that Viagogo AG engaged in misleading or deceptive conduct in connection with its online ticket resale business by:

  • its use of the words "Buy Now, Viagogo Official Site", which conveyed the misleading impression that Viagogo was the official seller of tickets for the promoted event;
  • statements on its website to the effect that tickets were likely to sell out soon, or were in limited supply, when those statements related only to tickets available on Viagogo's website rather than the actual quantity of tickets generally available; and
  • the representation that customers could purchase tickets for a specified amount, when in fact they could not, since additional fees (such as a delivery fee), were also payable.

Viagogo was also found to have breached the component pricing rules, as it did not specify in a prominent way and as a single figure, the total price for each ticket.

The penalty to be paid by Viagogo is yet to be determined.

ACCC hits home against Quantum for misleading and unconscionable conduct

The ACCC has instituted proceedings against Quantum Housing Group Pty Ltd (Quantum) and its sole director. The ACCC alleges Quantum engaged in unconscionable conduct and false, misleading or deceptive conduct relating to the participation of property managers and investors in the National Rental Affordability Scheme (NRAS).

Quantum issued guidelines to property investors and their existing property managers. These guidelines set out how property managers could become approved by Quantum, including that property managers had to pay a $10,000 security deposit per property to Quantum. It is also alleged Quantum sent a series of letters to investors containing false statements and threats designed to pressure and coerce investors to change to a Quantum-approved property manager.

The ACCC alleges this security deposit was not reasonably required to cover Quantum's risk, and would be a strong disincentive to non-approved managers wishing to continue managing their client's property. The ACCC alleges Quantum's statements were false or misleading and that Quantum acted unconscionably by unduly pressuring investors to switch managers.

The ACCC is seeking, among other things, a pecuniary penalty and a banning order against Quantum's sole director.

ACCC issues proceedings against Bupa despite self-reporting

The ACCC has instituted proceedings against Bupa Aged Care Australia Pty Ltd (Bupa) alleging Bupa made false or misleading representations to its aged care residents about services it did not provide and took payment without providing those services.

Between December 2007 and June 2018, Bupa charged thousands of residents at 21 aged care homes an annual fee of several thousand dollars for 'extra services'. Bupa conducted an internal review in 2018 and self-reported to the ACCC, the Department of Health and the Aged Care Quality and Safety Commission. It also established a compensation scheme to repay residents and families for failing to provide the promised services.

The ACCC commenced its proceedings despite Bupa self-reporting the conduct, citing that consumer issues faced by vulnerable and disadvantaged consumers is one of the ACCC's enduring enforcement priorities.

European Commission publishes report on EU loan syndication and its impact on competition

Following an almost two-year market study, the European Commission has published a report on the impact of loan syndication on competition in the European Union credit markets. The report covers syndicated loans in the context of leveraged buy-outs, project finance and infrastructure projects, focusing on six European Union Member States.

The report did not identify any inherently anti-competitive features in the markets analysed, but did highlight a number of factors which could pose competition law concerns in specific circumstances, including:

  • collusion via market soundings;
  • tying of ancillary services;
  • tacit reciprocity where bookrunners are dealing with competing lenders; and
  • curtailed borrower/sponsor bargaining power where the borrower is in financial difficulty and faces default.

A more detailed summary of the report by our colleagues at Linklaters can be found here.

For further information, please contact:

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