Competition and Consumer Law Update – April/May 2020 Edition
This is the latest in a 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.
This article covers events which occurred in April and May 2020, including the ACCC’s continuing response to the COVID-19 pandemic. The previous March 2020 update is available here.
STA Travel ordered to pay $14 million penalty for misleading advertising
The Federal Court has ordered that STA Travel pay a $14 million penalty for misleading advertising regarding its ‘MultiFLEX Pass’. STA Travel advertised that consumers who purchased the pass could change their flights without paying additional fees:
However, STA Travel charged MultiFLEX Pass holders hundreds of dollars in fees on top of the cost of the pass to change their flight dates, even if the airline itself did not impose any fees or imposed cheaper fees. The ACCC commenced proceedings against STA Travel in March 2019 alleging contraventions of ss 18 and 29 of the Australian Consumer Law. STA Travel admitted liability and made joint submissions with the ACCC regarding appropriate penalties, which were accepted by Justice O’Bryan. The ACCC media release can be viewed here.
Bupa ordered to pay $6 million penalty for misleading representations
The Federal Court has ordered Bupa Aged Care to pay a $6 million penalty and refund affected consumers on the basis of false representations given by Bupa that it would provide residents at its aged care facilities with extra services. Bupa accepted money from the residents for the services – which included specialised gardens and physiotherapy rooms – but then failed to provide them. Bupa self-reported the conduct to the ACCC and began a remediation scheme by compensating affected consumers in 2018, and estimates that it will refund over $18 million in fees to affected residents. On the basis of joint submissions made by the ACCC and Bupa, Justice Mortimer in the Federal Court accepted that Bupa’s remediation scheme, in conjunction with the $6 million penalty, was an appropriate remedy. The ACCC media release can be viewed here.
GSK and Novartis ordered to pay $4.5 million penalties regarding Voltaren Osteo Gel claims
The Federal Court has ordered that pharmaceutical companies GSK and Novartis pay $4.5 million in penalties for making false or misleading claims in the advertising of their Voltaren Osteo Gel product. The Federal Court accepted the companies’ admissions that they misled consumers by marketing the gel as being more effective at treating osteoarthritis pain than Emugel, when in fact the products contained the same active ingredients. Justice Bromwich in the Federal Court accepted the parties’ joint submissions on appropriate penalties, bearing in mind the remedial activities already undertaken by GSK and Novartis, which included amending the packaging of Voltaren Osteo Gel. The ACCC media release can be viewed here.
Full Federal Court dismisses appeal against Pacific National merger decision
In ACCC v Pacific National Pty Limited  FCAFC 7, the Full Court of the Federal Court of Australia, has dismissed the ACCC’s appeal against the Federal Court’s decision that the proposed sale of the Acacia Ridge Rail Terminal by the Aurizon Group to Pacific National would be unlikely to substantially lessen competition. The ACCC opposed the sale on the basis that it would contravene section 50 of the Competition and Consumer Act 2010 (Cth) by, amongst other things, allowing Pacific National to prevent new entrants from competing in the market. However, a majority of the Full Federal Court found that the ACCC had not established that another company was likely (i.e., that there was a “real commercial likelihood”) to enter the market in the next five to ten years even absent the merger. Any possible substantial lessening of competition was therefore “speculative”, which was not sufficient to enliven s 50. The ACCC media release can be viewed here.
Flight Centre agrees to refund cancellation fees
Flight Centre has agreed to refund customers who were charged fees of up to $300 per flight for cancelling their travel bookings due to COVID-19. The policy will also apply to Aunt Betty, Travel Associates, Student Universe, Universal Traveller, and Jetescape Travel, which are part of the Flight Centre group. The ACCC received a large number of complaints about the cancellation fees and indicated that it was prepared to commence proceedings against Flight Centre if it did not refund affected consumers. The ACCC media release can be viewed here.
TEG Live to refund tickets for USA versus Australia basketball games
TEG Live has provided a court-enforceable undertaking to the ACCC to refund over $5 million to consumers who bought tickets to attend basketball games between the USA and Australia in August 2019. The ACCC alleged that TEG Live mislead consumers in relation to its advertisement of the games. TEG Live advertised the games using photos of an American stadium showing tiered floor-level seats, whereas the actual floor-level seats were flat, resulting in obstructed viewing for some consumers. TEG Live also advertised the games by reference to big names such as LeBron James and Kevin Durant who did not ultimately travel to Australia for the games. The ACCC alleged, and TEG Live admitted, that this was false or misleading, as it had no reasonable grounds for representing to consumers that these players would play in the game. TEG Live undertook to contact affected consumers for their refunds. The ACCC media release can be viewed here.
Bob Jane gives franchising undertaking
Bob Jane has provided a court-enforceable undertaking to the ACCC to comply with its obligations under the Franchising Code of Conduct, in particular, in relation to the renewal and extension of franchising agreements. The ACCC was concerned that, amongst other things, Bob Jane failed to notify its franchisees whether it intended to renew or extend their franchise agreements at least six months before the expiry of their agreements as required under the Code. Pursuant to the undertakings, Bob Jane has agreed not to terminate any franchise agreements without providing the requisite notice, and to implement a compliance program. The ACCC media release can be viewed here.
ACCC and OAIC release Consumer Data Right Compliance and Enforcement Policy
The ACCC and Office of the Australian Information Commissioner have jointly released the Compliance and Enforcement Policy for the Consumer Data Right, which outlines the approach that the bodies are taking to ensure compliance with, and enforcement of, the Consumer Data Right regulatory framework. The Policy is intended to give consumers greater access to, and rights over, their data which is collected by companies. The Policy can be viewed here.
Queensland Yoghurt agrees to penalties for failing to disclose gelatine ingredient
Queensland Yoghurt has agreed to pay penalties of $12,600 after the ACCC issued an infringement notice for allegedly misleading consumers by omitting gelatine as an ingredient in certain yoghurt products. Queensland Yoghurt has also agreed to amend the statement of ingredients on the affected products. The ACCC media release can be viewed here.
ACCC releases concepts paper on news media and digital platforms bargaining code
The ACCC has released a concepts paper regarding its proposed code to deal with digital advertising and, in particular, the imbalance in bargaining position between Australian news media businesses and digital platforms such as Facebook and Google. The government has asked the ACCC to release a draft code for public consultation before the end of July 2020. The concepts paper can be viewed here.
Various interim authorisations granted
The ACCC has granted various interim authorisations for certain companies and industries to engage in conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010 (Cth), in response to COVID-19. These includes interim authorisations for:
- shopping centres to cooperate to support retail tenants;
- medicine manufacturers to coordinate their COVID-19 response;
- oil companies to co-operate to secure fuel supplies;
- gas and electricity companies to co-operate on measures to ensure reliable energy supplies;
- hospitals in Victoria, Queensland, the Northern Territory and South Australia to co-operate regarding their COVID-19 response;
- members of the Australian Securitisation Forum to work together to assist smaller lenders to maintain liquidity;
- retailers to collectively negotiate with landlords; and
- mining companies to manage critical services and supplies.