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LegalCorporateComplianceFebruary 10, 2022

Competition and consumer law — 2021 and beyond

Here’s a snapshot of key competition and consumer cases and law reform developments in 2021 and early 2022, plus a peek at what’s coming next.

Changes that have commenced or become law

  • Consumer and business rights expanded significantly on 1 July 2021: From 1 July 2021, people or businesses who buy or lease goods or services that cost up to $100,000 have “consumer” rights. These include rights to refunds, replacements or repairs if goods are defective or unfit for purpose. These rights will be available even if the goods or services are not the kind that are ordinarily acquired for personal, domestic or household use. For example, a business buying an $99,000 machine for commercial use will be a “consumer”, with rights under the consumer guarantees (such as the guarantee of acceptable quality), unsolicited consumer agreements laws and other laws. This change happened because the monetary threshold in the definition of “consumer” increased from $40,000 to $100,000, commencing 1 July 2021. In a nutshell, a “consumer” is a buyer or lessee of goods or services up to $100,000, goods or services ordinarily for personal use or transport vehicles.
  • Franchising Code can set $10+ million penalty (but has not yet): The law changed to allow the Franchising Code to greatly increase the maximum penalty for Franchising Code breaches to $10 million or more, commencing on 14 September 2021. The penalties in the Franchising Code have not yet increased. Schedule 2 of the Treasury Laws Amendment (2021 Measures No 6) Act 2021 (Cth) raised the maximum penalty that the Franchising Code can set for breaches by corporations to the greatest of $10 million, 3 times the benefit to the corporation or any related corporation, or 10% of the “annual turnover” of the corporation and any related corporation. The amending Act allows a $500,000 maximum penalty for individuals who breach the Franchising Code. The amending Act lifts the maximum penalty that other industry codes (that do not relate to franchising) can set for breaches from 300 penalty units ($66,600) to 600 penalty units ($133,200).
  • Car repairers can buy service information from 1 July 2022: Independent motor vehicle repairers in Australia will have the right to buy the technical information they need to diagnose, service and repair cars from 1 July 2022: Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Act 2021.
  • Facebook/Google news media bargaining code commenced: An amending Act designed to make Facebook and Google pay fairly for news commenced on 3 March 2021. It established a media bargaining code to set up a framework for commercial negotiations, so that news media businesses are fairly remunerated for their content. The “world-leading” mandatory code was intended to initially apply to Facebook NewsFeed and Google Search. However, “[t]o date, no digital platform has been designated to participate in the code”. Instead Google and Facebook entered into many commercial agreements with news organisations in Australia in 2021. The amending Act was the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021 (Cth).

Check out our 4 new tables comparing cases about social media, Google, online marketplaces and comparison websites. Explore the progress in implementing the ACCC’s recommendations in its Digital Platforms Inquiry Final Report. Find out what the ACCC has recommended in relation to digital advertising, app marketplaces and default search engines in 2021.

  • Consumer Data Right (CDR) will expand to energy sector in late 2022: Product information in the energy sector will be shared from October 2022. Consumer data-sharing starts in November 2022 for customer data held by the Australian Energy Market Operator (AEMO), AGL Energy Group, Origin Energy Group and Energy Australia Group: Rollout. Energy consumers will be able to securely and easily share data about their energy use and connection. A peer-to-peer (P2P) data access model will be used for the energy sector. The CDR Rules were amended commencing 16 November 2021 to set up the P2P model: Competition and Consumer (Consumer Data Right) Amendment Rules (No 2) 2021. Certain privacy safeguards were applied to retailers instead of the AEMO, commencing 27 November 2021: Competition and Consumer Amendment (Consumer Data Right) Regulations 2021.
  • CDR — Sponsored accreditation, CDR representatives: Changes to the CDR Rules relating to CDR representatives, trusted advisers, data insights, staged implementation and outsourced data collection commenced in October 2021. Changes relating to sponsored accreditation commenced on 1 February 2022. Changes relating to joint accounts will commence on 1 July 2022.
  • ASIC launched new Immunity Policy for market misconduct offences: On 24 February 2021, ASIC released a new Immunity Policy for certain contraventions of the Corporations Act 2001 (Cth), including market manipulation, false trading, market rigging, insider trading, dishonest conduct or misleading and deceptive conduct in the course of carrying on a financial services business.

Changes in the pipeline

  • Penalties for unfair contract terms proposed in new Bill: A Bill to introduce penalties for proposing and relying on unfair contract terms has been introduced into parliament. The Bill also expands unfair contract term protections to more contracts. The Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 (Cth) was introduced into the House of Representatives on 9 February 2022. Schedule 4 proposes changes to unfair contract term laws.
  • Penalties for consumer guarantees and supplier indemnification failures — Consultation: The Treasury consulted on whether to introduce civil prohibitions and penalties for suppliers who fail to provide consumer guarantee remedies, and manufacturers or importers who fail to indemnify suppliers or who retaliate against suppliers seeking indemnification. Consultation ended on 11 February 2022. Check out our new interactive Consumer Guarantee Case Finder, and our practical guide to consumer guarantees.
  • Easier recognition of overseas safety standards — Consultation: The Treasury consulted on whether to allow the Treasurer to more easily declare trusted overseas standards as mandatory safety standards or information standards. It is also consulting on whether to amend the Australian Consumer Law (ACL) to more efficiently capture, or more easily allow businesses to comply with, updates to voluntary Australian and trusted overseas standards. Consultation ended on 21 January 2022.
  • Draft Bill to change National Access Regime — remove some merits review, limit repeated applications, terminate defunct arbitration: The Treasury consulted on a draft Bill to remove merits review by the Australian Competition Tribunal of Ministerial decisions to declare, not to declare, or not to revoke a declaration of an infrastructure service. Merits review by the Tribunal will remain available for other decisions including ACCC arbitrations. The draft Bill will limit new applications for declaration, or recommendations to revoke a declaration, if there has been a previous declaration or revocation for that infrastructure service. Subsequent applications may only be made after 10 years or a material change of circumstances. The draft Bill will also terminate arbitration proceedings and determinations for infrastructure that is no longer declared (ie where the declaration expires or is revoked). Consultation ended on 14 January 2022.
  • Telecommunications sector designated: The telecommunications sector’s designation under the CDR commenced on 25 January 2022. Consultations will start soon on the CDR rules for this sector.
  • “Open Finance” next step: The finance sector, including insurance, superannuation, and non-bank loans is the next sector for the CDR rollout. The government aims to finish the first phase of assessments and designations of Open Finance in 2022.
  • Review: The Australian Government has started a review of the implementation of the CDR.
  • Privacy: In November 2021, the Treasury responded to Maddocks’ recommended changes to address privacy risks by agreeing in principle with the recommendation to research whether to make CDR consumers aware of AEMO’s role, and disagreeing with the recommendation to consider Direct to Consumer requests, while noting the other recommendations.
  • Franchise — Disclosure Register, Automotive code: The government consulted on draft changes to the Franchising Code to establish a register of franchise businesses. The consultation ended on 29 October 2021. The government also consulted on the value of a standalone automotive franchising code and options for mandatory binding arbitration for automotive franchisees. The consultation ended on 13 September 2021.
  • Merger law reform: The ACCC started a debate on merger reform proposals in August 2021. It proposed a new formal merger review process, changes to the mergers test and reforms to deal with acquisitions by large digital platforms.
  • ACCC appointments: Gina Cass-Gottlieb will become the Chair of the ACCC, starting on 21 March 2022. Liza Carver has been appointed as an ACCC Commissioner, starting on 1 March 2022.

Key competition and consumer cases in 2021

  • Exploitation of vulnerability not needed for unconscionable conduct: In an important decision, the Full Federal Court clarified that exploitation of vulnerability or disadvantage is not a necessary feature of unconscionable conduct under s 21 of the ACL. Unconscionable conduct under s 21 will often involve “some form of exploitation of or predation upon some vulnerability or disadvantage of people”. However, this is “not a necessary feature … or a necessary essence … of the statutory phrase”: ACCC v Quantum Housing Group Pty Ltd (2021) ATPR ¶42-722; [2021] FCAFC 40.
  • Fortnite’s maker can sue Google and Apple in Australia: Epic Games (the developer of the popular online video game, Fortnite) can continue to sue Apple for competition law breaches and unconscionable conduct in Australia under Australian law, despite a contractual choice of forum clause: Epic Games, Inc v Apple Inc (2021) ATPR ¶42-733; [2021] FCAFC 122. The High Court dismissed the application for special leave to appeal: Apple Inc v Epic Games, Inc [2021] HCASL 234. Similarly, on 4 February 2022, Google’s stay application was refused, despite an exclusive jurisdiction clause, in Epic Games, Inc v Google LLC (Stay Application) (2022) ATPR ¶42-771; [2022] FCA 66. Epic Games is suing Google over the exclusion of Fortnite from the Android platform, and Google’s refusal to let Epic offer in-game purchases except via Google Play (typically incurring a 30% commission).
  • TasPorts misused its market power: Tasmanian Ports Corporation (TasPorts) misused its market power by imposing a new port access charge on a customer who was switching to a new service provider for towage and pilotage. This was the first court case declaring a breach of the “new” misuse of market power law (s 46 of the Competition and Consumer Act 2010 (Cth) (CCA)) since it was amended on 6 November 2017: ACCC v Tasmanian Ports Corporation Pty Ltd (2021) ATPR ¶42-726; [2021] FCA 482.
  • Glencore can seek an access determination in Port of Newcastle case: The ACCC is extremely concerned that a High Court decision about navigation charges means that some users of the Port of Newcastle may end up paying twice. The High Court allowed the port operator to recover user-funded costs through its navigation charges: Port of Newcastle Operations Pty Ltd v Glencore Coal Assets Australia Pty Ltd (2021) ATPR ¶42-744; [2021] HCA 39. See our table comparing cases about access under Pt IIIA of the CCA.
  • Google misled users about location data: In a world-first case, the Federal Court held that Google misled consumers into thinking that “Location History” was the only setting affecting personal location data collection on Android devices: ACCC v Google LLC (No 2) (2021) ATPR ¶42-725; [2021] FCA 367. Check out our interactive Misleading Case Finder. Check out our new table comparing cases about Google.
  • Prosecutor drops case against Citigroup, Deutsche Bank, ANZ and executives. Charges were withdrawn in stages in February 2022, October 2021 and August 2021. 
  • Country Care, CEO and employee acquitted of criminal cartel offences by jury, 2 June 2021: This was the first contested criminal cartel case in Australia. Cartel laws do not require a complete identity of the suppliers relied on to prove that the competition condition and the purpose/effect condition are satisfied, but the suppliers must at least overlap: Commonwealth Director of Public Prosecutions v The Country Care Group Pty Ltd (Ruling No 7) (2021) ATPR ¶42-734; [2021] FCA 265 at [23], [25], [28], s 45AD of the CCA. The accused failed to show that the trial would be oppressively complex if the prosecutor was allowed to pursue the first 3 charges: The Country Care Group Pty Ltd v Commonwealth Director of Public Prosecutions (2020) ATPR ¶42-700; [2020] FCAFC 30.
  • Shipping company Wallenius Wilhelmsen Ocean AS (WWO) fined $24 million after pleading guilty, 4 February 2021: Commonwealth Director of Public Prosecutions v Wallenius Wilhelmsen Ocean AS (2021) ATPR ¶42-720; [2021] FCA 52
  • Medicine ingredient producer pled guilty to criminal cartel: Alkaloids of Australia and manager, 16 November 2021
  • COVID-19: Find out how competition and consumer law applies to COVID-19, including travel, event and wedding cancellations; prices of rapid antigen tests; hand sanitiser labels; and product advertising etc. Check out our table comparing cases about COVID-19 and consumer law, including: 
  • State of NSW agreed to compensate a port company if another port increased its container cargo capacity: There was no breach of s 45. The ACCC’s case failed on 2 grounds: (i) Crown immunity extended to NSW Ports; (ii) the impugned provisions had neither the purpose nor likely effect of substantially lessening competition. Both the state and NSW Ports were clearly motivated by profit maximisation. The state’s purpose was to ensure that bidders did not discount their bids. NSW Ports’ substantial purpose was to ensure that it would retain what it had paid for: the benefit of the existing monopoly:  ACCC v NSW Ports Operations Hold Co Pty Ltd (2021) ATPR ¶42-737; [2021] FCA 720.
  • Mazda misled 9 buyers about rights to refunds or replacement cars: Mazda Australia misrepresented consumer guarantee rights 49 times to 9 consumers whose new Mazda cars had serious, repeated faults within 1–2 years of purchase. When they asked for refunds or replacement cars, Mazda claimed they were only entitled to another repair, despite multiple failed attempted repairs over months or even years. In some cases, Mazda offered a partial refund, or offered a replacement car only if the consumer paid a significant amount. However, Mazda’s conduct was not unconscionable: ACCC v Mazda Australia Pty Ltd (2021) ATPR ¶42-745; [2021] FCA 1493, Consumer Guarantee Case Finder and Misleading Case Finder.
  • Employsure penalised $1m for misleading “Fair Work” Google Ads: Employsure was penalised $1 million for misrepresenting that it was, or was affiliated with, a government agency in its Google Ads. Employsure was a private company selling workplace relations and WHS advice to business owners. It was not affiliated with any government agency. The Google Ads were triggered by searches for terms like “fair work ombudsman”. They had headlines such as “Fair Work Ombudsman Help – Free 24/7 Employer Advice” and “Fair Work Commission Advice – Free Employer Advice”: ACCC v Employsure Pty Ltd (2021) ATPR ¶42-739; [2021] FCAFC 142 and ACCC v Employsure Pty Ltd (No 2) [2021] FCA 1488. The ACCC is appealing the penalty amount. 
  • 152 franchisees never received an operational swim school, despite the franchisor claiming they would have a ready-to-operate swim school business within 12 months of signing up. The franchisor was penalised $23 million. The director was penalised $400,000. The director was ordered to pay $500,000 to a non-party consumer redress scheme. Section 227 of the ACL allows a court to reduce or eliminate a pecuniary penalty in favour of compensation if the respondent does not have enough money to pay both: ACCC v Campbell (No 3) (2021) ATPR ¶42-728; [2021] FCA 528.

Check out our new practical guides which we added in 2021:

Keep in touch with our What’s New for commentary and cases. The original version of this article was first published in CCH Pinpoint on 27 December 2021. It was updated on 22 February 2022 for WK’s Expert Insights.

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