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22 Nov 2018

The Australian Competition and Consumer Commission (ACCC) has recently announced an increase to the penalties for some breaches of the Australian Consumer Law (ACL).

The ACL can be found in Volume 3 of the Competition and Consumer Act 2010 (Cth) (CCA); it regulates the conduct of entities conducting business and trade within Australia. The ACL also allows:

a) individuals and other businesses to make a claim against the person or entity breaching the ACL to recover their losses; and

b) the Australian Competition and Consumer Commission to enforce the regulations contained in the ACL through court proceedings.

Chapter 4 of the ACL allows the ACCC to seek that the Court impose penalties on the entity breaching any laws contained in chapter 3 of the ACL. On 23 August 2018, the ACCC announced increases to the maximum penalties contained in the ACL to $10 million for corporations, and for individuals to $500,000.00.

This means, for example, a person who sells or supplies products which do not comply with relevant safety standards could now be hit with a penalty of up to $500,000.00. A corporation could be hit with a $10 million penalty for the same conduct.

Additionally, on 18 October 2018, the Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 finally passed the Senate. This includes important updates to the investigative and regulative powers of consumer and corporate regulators ACCC and ASIC, in addition to expanding the application of a number of consumer protections included in the CCA.

Some important updates to the CCA which are to come in to effect shortly include:

1. Amendment to s137H(1) and (2) of the CCA to allow litigants to rely on admissions/findings of fact made in other proceedings. For example, if you engage in misleading advertising and someone commences legal action against you for that misleading conduct, the courts determination as to whether your advertisement was misleading can be relied on in a later court matter in which the question of whether that advertisement was misleading or not is raised;

2. Amendment to s131(2)(a)(i) and (ii) of the CCA making the ACL apply to publicly listed companies;

3. Amendment to s48 of ACL to require any additional fees and charges to be included in the headline price. For example, websites selling items with automatically selected add-ons (which have to be deselected by consumers in order to avoid being charged for them) have to ensure that those add-ons must be included and mentioned that the add-on charge has been included in the headline price.

4. Amendment to s155 of CCA extending the powers of the ACCC to obtain information, documents and evidence in relation to potential unfair contract terms. This is particularly important for small businesses as it shows the ACCC is committed to protecting their interests, and it extends their power to bring contracts and contract terms to the attention of the courts and potentially have them declared void.

Read more about the pending updates:

https://www.accc.gov.au/media-release/consumer-law-penalties-set-to-increase

https://www.legislation.gov.au/Details/C2018B00046