Welcome to Piper Alderman's New Bulletin Looking at Competition and Consumer Law. in This Bulletin We Seek to Inform on Develo
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COMPETITION AND CONSUMER NEWS Welcome to Piper Alderman’s new bulletin looking at competition and consumer law. In this bulletin we seek to inform on developments in these areas of law and trade practices generally. The last two years have witnessed significant and far reaching changes to both competition law and consumer law. Considerable changes have been made to cartel provisions, price signalling and other aspects of Part IV provisions. Further, the introduction of the Australian Consumer Law has brought with it provisions relating to unfair standard form contracts, the introduction of consumer guarantees and wide remedies available to consumers and regulators. The ACL also introduces revised provisions in relation to misleading or deceptive conduct, unconscionable conduct and pricing representations which potentially impact on all levels of business activity. In addition, the ACCC in particular has been a proactive regulator and achieved a number of decisive and significant outcomes both in the courts as well as part of its broadened enforcement responsibilities and activities. The ACCC has also sought to engage more with industry, with lawyers and with the community generally regarding its conduct. For an in depth summary of the competition law and consumer law provisions of the Competition and Consumer Act, please click here. Competition and Consumer News editorial team Anne Freeman Bill Fragos Partner Senior Associate t +61 2 9253 9934 t +61 8 8205 3446 [email protected] [email protected] www.piperalderman.com.au 1 March 2013 Contents In the March 2013 edition: ACCC proactive in enforcing ACCC cartel crackdown guarantees Associate, Stephen Morrissey looks Senior Associate, Bill Fragos looks at at how cartels are defined within the how the ACCC has been demonstrating Competition and Consumer Act and 3 its commitment to the area of consumer 10 examines the recent ACCC focus on guarantees, with separate proceedings commenced in cartel conduct. the last five months against Hewlett-Packard Australia and eleven Harvey Norman franchisees. Prices too good to be true! Trade in peace Multiple, misleading and Senior Associate, Bill Fragos examines component pricing the implications for traders of a recent On 18 January 2013, the Federal 11 decision in the High Court of Australia 5 14 relating to the ability of local councils to Court imposed a $250,000 fine on The Jewellery Group Pty Ltd for misleading and deceptive pass specific types of by-laws and the potential for those conduct and false and misleading representations made by-laws to infringe implied rights of freedom of political about price of goods or services. Senior Associate, communication under the Australian Constitution. Bill Fragos and Lawyer, Nicola Caon look at how the ACCC has been proactive in instituting these types of proceedings. ACCC announces its priorities Government decides insurance of 2013 contracts should be subject to On 21 February 2013 the Chairman unfair contracts terms laws of the ACCC, Rod Sims outlined the 12 In an article published in the Piper 8 ACCC’s priorities for 2013. Senior Alderman e-Bulletin March 2012 Anne Associate, Bill Fragos takes a closer look. Freeman reviewed the options being considered by the Commonwealth Government for unfair contract terms to apply to insurance contracts. Anne now provides an update. www.piperalderman.com.au 2 March 2013 [PUBLICATION NAME] ACCC proactive in enforcing consumer Contents guarantees The Australian Competition and Consumer Commission is demonstrating its commitment to the area of consumer guarantees. In the last five months the ACCC has commenced separate proceedings against Hewlett-Packard Australia Pty Ltd and eleven Harvey Norman franchisees. Both of these cases relate to representations made to consumers regarding consumer guarantees. Senior Associate Bill Fragos reviews the cases. Harvey Norman franchisees It has been alleged that these companies Hewlett-Packard Australia Pty Ltd engaged in misleading or deceptive The ACCC commenced proceedings conduct by making false or misleading The ACCC commenced proceedings in in the Federal Court in Sydney against representations to consumers in relation to the Federal Court in Sydney alleging that a select group of Harvey Norman their consumer guarantee rights under the HP engaged in misleading or deceptive franchisees. They are: Australian Consumer Law (ACL). conduct by: Avitalb Pty Limited (Albany, WA) In these proceedings it has been alleged Making false or misleading by the ACCC that the franchisees misled representations to consumers in Bunavit Pty Limited (Bundall, Qld) consumers about their rights by representing relation to consumers’ statutory warranty and consumer guarantee Camavit Pty Limited (Campbelltown, that the franchisee had no obligation to rights. NSW) provide: Making false or misleading Gordon Superstore Pty Limited remedies if they had not been notified representations to retailers that HP (Gordon, NSW) about damaged goods within a specific period of time was not liable to indemnify them if they HP Superstore Pty Limited (Hoppers provided consumers with a refund Crossing, Vic) remedies for goods covered by a or replacement without HP’s prior manufacturer’s warranty authorisation. Ipavit Pty Limited (Ipswich, Qld) refunds or replacements for particular In the instance of the HP case, it is Launceston Superstore Pty Limited items or items priced below a specific important to note the allegations also (Launceston, Tas) amount. relate to representations made in the course of business by HP to retailers. Mandurvit Pty Limited (Mandurah, Further, the ACCC alleges that a Often the relationships as between a WA) representation was made that consumers manufacturer and retailer are governed by must pay a fee for the repair and return of private distribution agreements. Moonah Superstore Pty Limited faulty products. (Moonah, Tas) The ACCC alleges that HP represented: Oxteha Pty Limited (Oxley, Qld) remedies available for faulty HP goods Salecomp Pty Limited (Sale, Vic) were limited to HP’s sole discretion that consumers could only receive a replacement if there had been a previous attempt to repair the goods Competition and Consumer News 3 March 2013 [PUBLICATION NAME] that warranties were limited to a The ACL also regulates the manner which check, and obtain advice regarding, specified express warranty period and warranties against defects are communicated terms and conditions of contracts with following the expiration of that period to consumers. That is, in the instance where consumers (this includes websites and consumers would have to pay HP for a representation is made to a consumer in-store signage) such repairs regarding remedies available to a consumer in the event goods or services are defective, check, and obtain advice regarding, that consumers could not return or the ACL specifies that particular information terms and conditions of contracts exchange HP goods purchased from is to be provided to consumers. Often such with manufacturers and retailers (this the HP Online Store unless otherwise information is included on goods packaging includes distribution agreements) agreed by HP at its sole discretion. and warranty cards supplied with goods. check, and obtain advice regarding, Consumer Guarantees The Federal Court has considered breaches warranties against defects of relevant provisions to be serious. In train staff appropriately in relation In early 2012, the ACCC identified the 2011 the Federal Court imposed penalties to consumer rights (this includes area of consumer guarantees as a national totalling $203,500 against MSY Technology having staff manuals and a compliance policy priority and a matter of particular Pty Ltd and four related companies for programme in place) concern. making false or misleading representations The ACL contains various provisions in regarding consumer warranties. ensure that any advertising material is clear and complies with the ACL. relation to consumer guarantees. Many Every year the ACCC receives a of these consumer guarantee rights considerable number of complaints cannot be excluded or limited. We and inquiries regarding guarantees and For further information contact: have previously prepared information warranties, recently estimated at 16,000 Bill Fragos, Senior Associate on consumer guarantees which can be per year by the ACCC’s Infocentre. It is accessed here. t +61 8 8205 3446 important that businesses supplying goods [email protected] Additional warranties can be offered and services make appropriate and accurate by businesses with respect to goods representations relating to consumer and services. Such warranties must be guarantees. To this end businesses should: additional to those guarantees provided under the ACL and must not limit those guarantees under the ACL. Competition and Consumer News 4 March 2013 [PUBLICATION NAME] [PUBLICATION NAME] Prices too good to be true! Multiple, misleading and component pricing On 18 January 2013, the Federal Court imposed a $250,000 fine on The Jewellery Group Pty Ltd for misleading and deceptive conduct and false and misleading representations made with respect to the price of goods or services. Recently, the ACCC has been proactive in instituting these types of proceedings and in some instances obtained penalties of up to $3.61m, as Senior Associate Bill Fragos and Lawyer, Nicola Caon discuss further. The cases shed light on the approach breaches of sections 47 and 48 of the Section