Authors: Tom Griffith, Alexander Hamam
An increase to penalties for breaches under the Australian Consumer Law, the prohibition of unfair contract terms and a crackdown on misleading or deceptive conduct; Piper Alderman recaps some of recent key events in the competition and consumer law space in the lead up to 2023.
AMENDMENTS TO THE COMPETITION AND CONSUMER ACT 2010
On 10 November 2022, the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth) (TAA) came into effect. The TAA has the effect of:
- raising the maximum penalties applicable for breaches of the Competition and Consumer Act 2010 (CCA); and
- establishing a regime that makes unfair contract terms illegal and which imposes penalties for businesses that include these terms in standard form contracts.
Increased penalties for breaches of the CCA
Under the TAA the maximum penalties for contraventions of the CCA by bodies corporate have increased by up to five times their previous level. From 10 November 2022, the maximum penalties courts may impose on bodies corporate for breaches under the CCA are the greater of:
- $50 million (five times the previous maximum of $10 million);
- three times the value of the benefit obtained; or
- 30 per cent (previously 10 per cent) of the body corporate’s turnover during the period it engaged in the conduct the subject of the breach.
The TAA has also increased the maximum penalty for breaches of the CCA by individuals to $2,500,000 (previously $500,000).
Prohibition of unfair contract terms
Prior to the introduction of the TAA, businesses were not prohibited by law from including unfair contract terms in standard form contracts, nor would they be liable for any penalty for including such terms in standard form contracts.
The TAA will make it illegal for businesses to use or rely upon unfair contract terms in standard form contracts with consumers or businesses that have less than 100 employees or an annual turnover of less than $10 million (small businesses), with courts able to impose considerable financial penalties for any breaches.
Penalties will only be applicable from 10 November 2023. In the meantime, there is a 12 month grace period with in which businesses have the opportunity to remove any unfair contract terms from their standard form contracts so as to be compliant with the new legislation.
MISLEADING AND DECEPTIVE PRACTICES
Several large international and Australian-based companies found themselves in the ACCC’s cross hairs during 2022, with some receiving significant financial penalties for their conduct.
ACCC v Uber
Uber was recently fined $21 million after it admitted that it misled customers about their fee estimates and trip cancellation fees during the period December 2017 to September 2021.
Cancellation warning
Uber conceded that during December 2017 and September 2021, Uber customers who attempted to cancel their bookings were displayed a message along the lines of: “You may be charged a small fee since your driver is already on their way” (see example below). This prompt was displayed to all customers attempting to cancel their booking, irrespective of whether they had cancelled within Uber’s free five minute cancellation window.
