ACCC not shying away from its 2017 ‘hit list’; Murray Goulburn, Apple and unfair contract terms
In February, the Australian Competition and Consumer Commission’s Chairman highlighted that there would be a focus by the regulator’s enforcements teams on misleading and deceptive practices, unconscionable conduct, and unfair contract terms affecting small businesses.
This statement has been backed up by a number of proceedings already commenced by the ACCC this year, demonstrating its commitment to enforcing these focus areas.
Alleged unconscionable conduct by Australia’s largest milk processor
The ACCC recently began proceedings against Australia’s largest milk processor, Murray Goulburn Cooperative Co Ltd, alleging that it had engaged in unconscionable conduct and made false or misleading representations to Southern Milk Region dairy farmers in contravention of the Australian Consumer Law (ACL).
The ACCC’s claims relate to representations by Murray Goulburn around anticipated farmgate milk prices, which misled farmers who were provided with a reasonable basis for certain expected pricing which was then substantially reduced without warning. These representations are suggested to have had an adverse impact on many farmers who, in a relatively vulnerable trading position, had relied upon the representations in order to budget effectively and make informed business decisions.
Additionally, the ACCC has alleged that the former managing director and former chief financial officer were knowingly concerned in the conduct, and will be seeking financial penalties against each of them in their personal capacities.
Misleading representations by Apple over consumer guarantees
This year, the ACCC has also commenced proceedings against Apple Pty Ltd and its US-based parent company, Apple Inc, based on allegations that Apple made false, misleading, or deceptive representations about consumers’ rights under the ACL.
This follows on from investigations which revealed that Apple routinely refused to service or repair consumers’ defective devices if the consumer had previously had the device repaired by a third party (for instance, where the consumer had a cracked screen replaced by someone other than Apple). Importantly, Apple appears to have refused to address issues with defective devices, even in instances where the defect was unrelated to the repairs undertaken by the third party.
ACCC Chairman, Rod Sims, said that “consumer guarantee rights under the Australian Consumer Law exist independently of any manufacturer’s warranty and are not extinguished simply because a consumer has goods repairs by a third party.”
B2B unfair contract regime already prompting in-depth investigations
Following the introduction of the new business-to-business unfair contract term laws in November 2016, the ACCC has indicated that a number of in-depth investigations are already underway across a range of industries.
The investigations have been started in response to both issues raised during the ACCC’s recent industry review, as well as complaints made to the ACCC (to date, 48 complaints from businesses about unfair contract terms have been received).
The ACCC stated it was concerned that many potentially unfair contract terms that it had previously identified were still appearing in standard contracts, with businesses seeking to ‘tip the scales’ too fair in their favour at the expenses of small businesses.
ACCC Deputy Chair, Dr Michael Schaper, has stated that the regulator will soon be taking enforcement action in relation to a number of companies over B2B unfair contract terms this year, and that it is a priority for the ACCC to ensure that small businesses receive protection under the new legislation.
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