Competition and Consumer Law Update – March 2020 Edition

Competition and Consumer Law Update – March 2020 Edition

Competition and Consumer Law Update – March 2020 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.

This article covers events which occurred in March 2020, including the ACCC’s response to the COVID-19 pandemic. The previous February 2020 update is available here.

Federal Court dismisses case against Ramsay Health Care

Justice Griffith in the Federal Court has dismissed the ACCC’s case against Ramsay Health in ACCC v Ramsay Health Care Australia Pty Ltd [2020] FCA 308. The ACCC alleged that Ramsay Health, which operated the only private hospital and day surgery in Coffs Harbour at the relevant time, told surgeons that their operating theatre time would be substantially reduced or withdrawn if they opened a competing facility. The ACCC alleged that this was a breach of the misuse of market power and exclusive dealing provisions contained in the Competition and Consumer Act 2010 (Cth) (as those provisions stood at the time of the alleged conduct in 2015 – the misuse of market power prohibition was amended in 2017). Justice Griffith found that, although Ramsay did have a substantial degree of market power, there was insufficient evidence that the alleged threats had been made and therefore dismissed the case. The ACCC has not appealed the decision. The ACCC media release can be viewed here.

Panthera ordered to pay half a million dollars in penalties for harassment

Panthera, a debt collection company, has been ordered by the Federal Court to pay $500,000 in penalties for harassing three consumers over debts that they did not owe. Panthera admitted to repeatedly calling these consumers, placing incorrect default listings on the credit rating files of two of the consumers, and misrepresenting to one consumer that he or she needed to pay Panthera $100 to have the default listing removed despite the fact that it could be removed for free. Justice Jagot of the Federal Court accepted the penalty agreed by Panthera and the ACCC for Panthera’s alleged contraventions of the false and misleading representation and undue harassment provisions of the Australian Consumer Law. The ACCC media release can be viewed here.

ACCC issues advice on event and travel cancellations due to COVID-19

The ACCC has issued guidance for consumers and businesses regarding their rights and obligations in respect of events and travel services which have been cancelled due to the government’s preventative COVID-19 measures. While the ACCC “expects” refunds to be issued by event and travel organisers (consistent with the normal position under the consumer guarantees contained in the Australian Consumer Law), it has also acknowledged that, if the event or travel service was cancelled due to the government restrictions, this may “impact” the consumer guarantees, meaning that credit or a voucher may be acceptable. This guidance is covered in more detail in an article on our website here, and the guidance itself can be viewed here.

Various interim authorisations granted by the ACCC in response to COVID-19

The ACCC has acknowledged that the COVID-19 pandemic has impacted Australian consumers and businesses, and has indicated that it will “factor these circumstances into its consideration of competition matters”. Consistent with this policy, the ACCC has granted various interim authorisations for certain companies to cooperate in response to the pandemic, despite the fact that doing so may otherwise breach the prohibitions on cartel conduct contained in the Competition and Consumer Act 2010 (Cth). Examples of interim authorisations granted by the ACCC include to the Australian Banking Association, supermarket chains, medical and pharmaceutical suppliers, and internet service providers. These authorisations are covered in more detail in an article on our website here.

Kogan trial goes ahead via videoconference

The ACCC’s case against Kogan, the online retailer, has been conducted via videoconference in the Federal Court, making it one of the first high-profile video trials as a result of the Federal Court’s response to COVID-19. The ACCC alleges that Kogan misled consumers by publishing promotions based on inflated “before” prices to make discounts appear more substantial than they actually were. The Federal Court’s COVID-19 information page can be viewed here, and the original press release regarding the Kogan proceedings can be viewed here.

Draft guidelines regarding electricity prices released

The ACCC has released draft guidelines intended to set out how electricity providers can comply with the amendments introduced by the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Act 2019 (Cth), which come into effect on 10 June 2020. The news laws prohibit:

  • electricity retailers from charging small customers (i.e., residential or small business customers) prices which are not adjusted to reflect reductions in underlying costs;
  • electricity generators from restricting access to hedging contracts for an anti-competitive purpose; and
  • electricity generators from engaging in bidding practices fraudulently, dishonestly or in bad faith and/or for the purpose of distorting or manipulating prices in an electricity spot market.

Submissions for the draft guidelines are now closed, and the ACCC has indicated that it will release its final guidelines on complying with these new laws before they come into effect. The draft guidelines can be viewed here.

ACCC releases issues paper on digital advertising

The ACCC is seeking views from stakeholders regarding its issues paper for the Ad Tech Inquiry, which is intended to enable the ACCC to determine whether the advertising technology market is operating effectively. The Inquiry will focus on the competitiveness, efficiency, transparency and effectiveness of markets for the supply of ad tech services and ad agency services.  The ACCC is seeking feedback on issues including whether there is sufficient competition in this space and the role and use of consumer data in supplying digital advertising services. The ACCC has also indicated that it will use its compulsory information-gathering powers to access non-public information from market participants. Stakeholders are invited to comment by 21 April 2020. The issues paper can be viewed here.

1300 Australia to amend allegedly unfair contract terms

1300 Australia, which sells ‘phonewords’ (telephone numbers that also spell words on a keypad), has acknowledged that certain terms contained in its contracts may have been unfair (for the purposes of sections 23 and 24 of the Australian Consumer Law), and committed to amend these terms by way of a court enforceable undertaking. The terms in question permitted 1300 Australia to:

  • renew a contract without notifying the customer;
  • change unspecified penalties for late payments;
  • remedy a breach of a contract by 1300 Australia within 30 days before the customer was allowed to terminate the contract, but only gave a customer 14 days to remedy a breach by the customer before 1300 Australia could terminate the contract; and
  • charge significant termination fees (up to 92.5% of the total contract price).

The undertaking provided by 1300 Australia can be viewed here, and the media release can be viewed here.

BAR Group pays penalties for misleading advertising

BAR Group has paid a $12,600 penalty after the ACCC issued it with an infringement notice regarding allegations it published false or misleading advertisements for its portable generator. The advertisements, which appeared on BAR Group’s website, represented that the generator was capable of achieving a running power of 6kW, when it could only produce this level of power for a short time. The ACCC media release can be viewed here.

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