Competition & Consumer Law Update – August 2019 Edition
COMPETITION AND CONSUMER LAW UPDATE – AUGUST 2019 EDITION
This is the latest in a monthly series detailing developments in competition and consumer law in Australia, including the activities of Australia’s competition and consumer regulator, the Australian Competition and Consumer Commission (ACCC), published judgments, recently issued proceedings and any relevant changes in the law.
Europcar penalised for excessive credit card surcharges
In ACCC v CLA Trading Pty Ltd t/a Europcar  FCA 1262, Davies J ordered Europcar to pay penalties for imposing surcharges for credit card payments that were higher than Europcar’s actual costs to process the transactions. Around 63,012 customers were affected, with each customer paying on average an excessive surcharge of just over $1 (amounting to an overcharging of more than $67,000). Europcar admitted the contraventions and the parties asked the Court to impose a penalty of $350,000. Justice Davies exercised the Court’s discretion to act upon the parties’ agreed proposal and imposed the requested penalty. Find the ACCC media release here.
Mitolo penalised for unfair contract terms with farmers
In ACCC v Mitolo Group Pty Ltd  FCA 1257, Murphy J declared that certain contract terms between Mitolo, Australia’s largest potato wholesaler, and various potato growers, were unfair and therefore void. The contract terms in question allowed Mitolo to unilaterally vary the price it paid the farmers for potatoes, prevented the farmers from selling potatoes to others and prevented farmers from selling their own land unless the purchaser agreed to enter into an exclusive potato growing arrangement with Mitolo. Mitolo admitted the contraventions and Justice Murphy ordered by consent that Mitolo pay a penalty of $240,000 for contraventions of the Horticulture Code and give an enforceable undertaking not to enter into contracts which contained the unfair terms. Find the ACCC media release here.
ACCC appeals Woolworths disposable picnic products decision
As mentioned in our July 2019 update, the ACCC has appealed the Federal Court’s decision that Woolworths did not mislead consumers by advertising its ‘Select Eco’ products as ‘biodegradable and compostable’. At trial, Justice Mortimer found that Woolworths’ claims were not misleading, as they were mere representations that the products were capable of biodegrading. The ACCC has appealed the decision on the basis that the claims amount to a future representation that the products will biodegrade in a reasonable time. As part of the trial decision, Justice Mortimer found that, if Woolworths made this future representation, it did not have reasonable grounds for doing so. Find the ACCC media release here.
Medical booking platform HealthEngine sued for “doctoring” reviews and disclosing patient information
The ACCC has commenced proceedings against HealthEngine, an online platform used by patients to book appointments with medical practitioners. The ACCC alleges that HealthEngine engaged in misleading and deceptive conduct by refusing to publish negative reviews of practitioners on its system and altering other feedback to remove negative aspects. The ACCC also alleges that HealthEngine supplied personal information such as phone numbers, email addresses, and dates of birth of patients to private health insurance brokers for a fee, without adequately disclosing this to consumers. The ACCC commenced the action with a Concise Statement to ‘fast track’ the matter through court. Find the ACCC media release, including a copy of the Concise Statement, here.
ACCC releases guidelines on the repeal of the intellectual property safe harbour
The ACCC has released a final version of its eagerly anticipated guidelines on the repeal of subsection 51(3) of the Competition and Consumer Act 2010 (Cth). Following the repeal, as of 13 September 2019, arrangements involving the licensing or assignment of intellectual property rights, which were previously exempt from many of the anti-competitive conduct prohibitions, will now be subject to Australian competition law, including the prohibition on engaging in cartel conduct. The document is intended to provide some guidance to parties regarding their obligations under the amended legislation, including how it will impact existing agreements. More information on these reforms is available here and here. We will be publishing an analysis of the guidelines shortly.
Big Warehouse and Saipol Technologies agree to undertakings
Big Warehouse, an online spare parts retailer, has agreed to pay a $12,600 penalty for, amongst other things, denying consumers full refunds or replacements for damaged goods, in contravention of consumer rights under the Australian Consumer Law. Big Warehouse has also undertaken to compensate affected customers. Find the ACCC media release here.
Saipol Technologies, a water filter cartridge business, has acknowledged that it likely breached the Australian Consumer Law by representing that its water filter cartridges were compliant with a Queensland Health Directive, when this may not have been the case. Saipol Technologies has undertaken to review its advertising materials and establish a consumer law compliance program. Find the ACCC media release here.
ACCC releases findings of investigation into food franchising agreements
Consistent with its enforcement priority of curtailing misconduct by franchisors, the ACCC has released a report, Disclosure practices in food franchising, which summarises key findings made during targeted compliance checks by the ACCC in 2019. The report details that around one in three food franchisors fail to disclose contact details of former franchisees to prospective franchisees. The ACCC considers that prospective franchisees would be better informed if they were able to contact former franchisees and the Franchising Code requires franchisors to provide contact details where the former franchisee no longer operates the business. The report also found that one in three franchisors failed to adequately disclose key information such as what essential goods were subject to supply restrictions as well as anticipated ongoing costs, and that nearly half of prospective franchisees did not get independent professional advice before buying a franchise.
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