This is the latest in a series detailing developments in competition and consumer law in Australia, including published judgments, recently issued proceedings, any relevant changes in the law, and the activities of Australia’s competition and consumer regulator: the Australian Competition and Consumer Commission (ACCC).
This article covers events which occurred between July and September 2024. The previous update is available here.
Judgments
High Court upholds penalties for unethical enrolments by Captain Cook College
As previously reported, the ACCC commenced proceedings for unconscionable conduct and making false or misleading representations against Captain Cook College, its parent company, and its parent company’s chief information officer. In 2021, the Federal Court found that they were liable for breaches of the Australian Consumer Law (ACL), by engaging in systematic unconscionable conduct. Captain Cook College appealed the decision to the Full Federal Court, with the Full Court dismissing the appeal in 2023.
Captain Cook sought special leave to appeal to the High Court. In August, the High Court dismissed the appeal, upholding the findings that when the online learning platform removed safeguards, including suitability checks and unenrollment of disengaged and uncontactable students, it was taking advantage of vulnerable consumers and acting unconscionably. The case will now go back to the Federal Court for a hearing on relief (including penalties and costs).
The ACCC media release is available here.
Secure Parking ordered to pay $10.95m, for misleading consumers about “secure-a-spot” services
Secure Parking has been ordered by the Federal Court to pay a fine of $10.95 million for misleading consumers about the nature of its carpark booking service, “Secure-a-Spot”. Based on the service’s name, and promotional material (“Book online for a guaranteed spot”), consumers expected they would receive a reserved parking space. However, Secure Parking admitted that generally it did not reserve parking spaces, and that car parks sometimes reached capacity such that, in some cases, customers arrived at the car park to find that the space they had booked was not available.
The ACCC media release discussing the judgment is available here.
Auctioneers ordered to pay $10 million in penalties for misleading descriptions of cars
The Federal Court has ordered Grays eCommerce Group Limited (and Australia-wide online auction business) to pay $10 million in penalties for misleading descriptions of cars in its online auctions. After an investigation, the ACCC uncovered that many of the cars available were described incorrectly, with false information including the year of manufacture, the transmission system, make/model, fuel type, odometer readings, roadworthiness, and other characteristics. Grays admitted making the false or misleading representations and, earlier this year, the ACCC accepted a court-enforceable undertaking from Grays to provide affected consumers with redress.
The ACCC media release is available here.
Misleading claims of online property courses result in over $20 million in fines and refunds
The Federal Court has ordered Wealth Master Control Pty Ltd (trading as DG Institute) to pay $5 million in pecuniary penalties for making false or misleading representations. Dominique Grubisa, a former barrister and the founder and sole director of Wealth Master Control has also been ordered to pay $1 million in penalties, as the Court found she had full knowledge that the representations were false.
The original decision was reported here, with the Federal Court finding that DG Institute, which offers courses on property management and wealth protection, had made false or misleading representations in relation to the promotion and sale of two of WMC’s educational programs: Real Estate Rescue and Master Wealth Control. The Court found that DG Institute’s representations included exaggerated descriptions of the foreclosure process (“banks don’t give change”), a claim that a trust structure would offer a student “complete and immediate protection from creditors to the extent of all their net worth” (despite this structure having gaps in the assets protected), and that a particular system promoted by DG Institute had been tested and upheld as effective in the Full Court of the Federal Court, when this was not the case.
The Court held that the representations were “fundamental” to a consumer’s decision to purchase the course, and so decided that all purchasers were entitled to a full refund. The Court ordered that DG Institute pay consumer redress totalling $14.7 million to students enrolled in the Master Wealth Control program, injunctions restraining DG Institute and its officers, including Ms Grubisa, from making similar or the same representation for a period of five years and for DG Institute and Ms Grubisa to pay the ACCC’s costs.
The ACCC media release can be found here.
New Proceedings
ACCC commences proceedings against The Good Guys
The ACCC has commenced proceedings against The Good Guys, alleging it mislead customers, in breach of the ACL, by offering store credit, and “StoreCash” to consumers, without sufficiently disclosing the terms of this credit. The store credit/cash was offered to entice purchases but could not be redeemed without consumers meeting specific conditions. For example, consumers had to opt in to marketing communications for a minimum period to qualify for store credit. The ACCC also alleges that The Good Guys represented that the store credit/cash would not expire (or would only expire after a reasonable period), when in most cases, the store credit expired within seven to ten days.
The advertisements for the promotion allegedly indicated that the only condition for obtaining credit was to make a qualifying purchase. The ACCC is seeking consumer redress, penalties, declarations, compliance orders, publication orders and costs.
The ACCC’s media release is available here.
ACCC commences action against Coles and Woolworths over “Prices Dropped” and “Down Down” claims
The ACCC has issued separate proceedings against Coles and Woolworths, alleging the supermarkets breached the ACL by misleading consumers through discount pricing claims on hundreds of everyday supermarket products. The ACCC alleges that the supermarkets sold the products at a regular long-term price (excepting short-term specials) for upwards of six months, then increased the price of those products by at least 15% for a brief period of time, before placing the products in the Coles “Down Down” or Woolworths “Prices Dropped” promotions, at prices lower than during the price spike but higher than, or the same as, the regular price that applied before the price spike. The ACCC says that, as a result of this conduct, the discounts advertised by the supermarkets were illusory.
The ACCC media release can be found here.
ACCC granted special leave to appeal the boycott findings against Hutchinson and CFMEU
As reported in the last update, the Full Federal Court upheld appeals by the CFMEU and J Hutchinson Pty Ltd against a previous finding that they had entered into and given effect to a boycott agreement. The ACCC sought leave to appeal the decision to the High Court of Australia, and has been granted that leave. The special leave application is set down to be heard by the High Court in December 2024.
The ACCC media release can be found here.
Legislative and Other Developments
$101,280 penalty for alleged failure to include fire warnings on the Kids Beach Oodie
The ACCC issued Davie Clothing Pty Ltd, the supplier of the Oodies loungewear brand, with several infringement notices for failing to comply with a mandatory product safety standard, after an investigation triggered by a consumer complaint. The Consumer Goods (Children’s Nightwear and Limited Daywear and Paper Patterns for Children’s Nightwear) Safety Standard 2017 requires suppliers to attach high fire danger warning labels to certain children’s products. The ACCC alleged that Oodies did not comply with this safety standard as it supplied around six designs without a fire label fixed to the garment or displayed on its website. The amount of the infringement notices totaled $101.280, which was paid by Davie Clothing. Davie Clothing also provided a court-enforceable undertaking to the ACCC to publish a corrective notice on its website and to establish and maintain an ACL Compliance Program.
The ACCC media release can be found here.
Honda pays fine for allegedly restricting access to diagnostic software
Honda has been issued with, and paid, a fine of $18,780 after being issued with an infringement notice by the ACCC for allegedly breaching the Motor Vehicle Service and Repair Information Sharing Scheme. Under this Scheme, manufacturers are obliged to provide independent repairers with access to necessary diagnostic software and technical information to be able to service and repair modern motor vehicles. The ACCC alleged that Honda breached this Scheme, by only giving repairers the option of purchasing an annual subscription to necessary software, when the Scheme requires vehicle manufacturers to offer the information for sale on a daily, monthly or yearly basis.
The media release can be found here.
ACCC will not oppose Optus and TPG regional mobile network and spectrum sharing
The ACCC will not oppose a proposed regional mobile network and spectrum sharing agreements between Optus and TPG. These agreements cover the provision of mobile services in certain regional coverage areas – Optus will use certain TPG spectrum to supply mobile services and Optus will provide TPG with network services. As a result, TPG will decommission most of its sites in the coverage area, but some will be transferred to Optus. After considering the effects of the agreements on competition for retail and wholesale services in Australia, the ACCC found that they were unlikely to substantially lessen competition and would allow TPG to provide better coverage in regional aeras, ultimately improving choice for regional consumers.
The ACCC media release can be found here.
New powers for the ACCC in enforcing carrier separation rules
Recent legislative amendments have been made giving the ACCC the power to issue infringement notices to network operators and intermediaries supplying retail services that contravene the carrier separation rules. Carrier separation rules require superfast network operators (those operating a superfast broadband network) to operate on a wholesale-only basis, unless they get an exemption from the ACCC. The legislative amendments have also increased maximum penalties for non-compliance with these rules to $10 million per contravention.
The ACCC media release can be viewed here.
Following these legislative amendments, the ACCC has also issued guidelines regarding its approach to exercising its infringement notice.
Digital Platform Services Inquiry to deliver tenth and final report
The ACCC is due to publish its tenth and final report as part of the ACCC’s Digital Platform Services Inquiry which will provide an update on recent developments in digital markets, identifying emerging issues and charting major developments overseas. The ACCC published an issues paper in July on the topic, and summarised the three areas of interest for the final report. The final report is due to be published in March 2024.
The ACCC media releases can be found here and here.
Consultation process on draft merger reforms
The Australian Government has released its exposure draft of the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024. The Merger Reform Bill seeks to simplify Australia’s merger control framework and is part of a reform proposed by the Government earlier this year. Consultation on the draft legislation has ended and the next step is for the government to review the submissions received and finalise the legislation for Government consideration. The Government has also released a consultation paper in relation to the notification thresholds for when mergers need to be notified to the ACCC.
The ACCC media release can be found here and the Treasury news updates can be found here and here.
ACCC provides interim authorisation for supermarkets to continue cooperation of soft plastics recycling
The ACCC has granted interim authorisation (with conditions) to Australia’s major supermarkets Coles, Woolworths and ALDI to continue collaborating to recycle sold plastics which have been stockpiled since the suspension of REDcycle’s collection program and to continue with a pilot in-store collection program.
The ACCC media release can be found here.
Draft guide released on sustainability collaborations
The ACCC has released a draft guide to assist companies in relation to collaboration between businesses regarding sustainability. The draft guide seeks to help businesses understand the competition law risk that may arise when they are working together, and includes examples of behavior which is likely to constitute cartel conduct, such as:
- businesses that compete to acquire a certain type of input, agree to only buy the input from suppliers that meet a particular sustainability criteria
- suppliers agree to charge a levy on the sale of their products to customers, in order to fund an industry recycling scheme for their products at the end of life
- rival manufacturers agree to use a new technology in their production process and to stop using older technology that emits more pollution.
The ACCC has flagged that businesses engaging in conduct of this kind may be able to seek authorisation from the ACCC to enable these types of collaboration. The ACCC anticipates publishing a finalised guide in late 2024. The ACCC press release can be accessed here.
ACCC authorises collaboration in offshore energy feasibility licence process
The ACCC has issued a final determination authorising collaboration between renewable energy businesses applying to supply offshore electricity. The request for authorisation was lodged by the Department of Climate Change, Energy, the Environment and Water, and related to the granting of feasibility licenses in declared offshore electricity generation areas.
For further details, the ACCC media release can be found here.
Interim authorisation granted for financial assistance of Armaguard
The ACCC has granted interim authorisation to the Australian Banking Association, banks and several retailers to financially support cash-in-transit business Armaguard to keep it afloat. This is part of broader conduct for which authorisation is sought which seeks authorisation to discuss, agree and implement operational sustainability and efficiency measures across services.
The ACCC media release can be found here.
ACCC accepts undertakings from Telstra, Optus, and TPG during its ongoing investigation into Google’s search services
The ACCC has accepted undertakings from TPG, Telstra and Optus as part of its ongoing investigation regarding Google’s search services in Australia. As part of the investigation, the ACCC became aware that Google had initiated and entered into agreements with TPG, Telstra and Optus to pre-install Google as the default search service on Android devices supplied by these companies. The undertakings provide that all three mobile network operators in Australia will not renew or enter into any arrangements with Google that require Google’s search services to be pre-installed and set as the default search function.
For further information, see the ACCC media releases on the TPG undertakings, and the Telstra / Optus undertakings.