17 July 2018
5 min read
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A recent ACCC enforcement action shows that both local and international businesses need to strictly comply with Australian consumer law, and ensure they clearly let consumers know their rights.
From at least 1 January 2017, Fitbit made various representations on its website and product packaging that had the effect of limiting its liability and consumer warranties for defective products. The ACCC took action against Fitbit for its misconduct under the Australian Consumer Law, and obtained an enforceable undertaking (EU) from Fitbit in May this year.
How the Australian Consumer Law applies
Schedule 2 of the Competition and Consumer Act 2010 (Cth) contains the Australian Consumer Law (ACL). The ACL provides a number of protections to consumers when purchasing goods and services, which are known as consumer guarantees. These guarantees are automatically incorporated into any consumer purchase and are not able to be excluded, modified or limited.
The ACL entitles consumers to remedies against the supplier of a good or service for a failure to comply with a consumer guarantee. Major failures entitle the consumer to a refund or replacement from the supplier, while minor failures require the supplier to provide a refund, repair or replacement.
Attempts to limit or exclude remedies available to consumers under the ACL may contravene the ACL.
Fitbit’s misconduct
The specific elements of Fitbit’s misconduct related to various representations to consumers made via Fitbit’s Australian website and product packaging, which included the following representations:
Despite the warranties including phrases such as “to the extent permitted by law” and “except where prohibited by applicable law”, the ACCC found that engaging in the above conduct meant that Fitbit has:
Enforceable undertakings: Actions required
The enforceable undertakings from Fitbit have the effect of ensuring warranty provisions comply with the ACL and that consumers are aware that their rights are governed by such legislation.
They will ensure that consumer guarantees are in no way limited by the supplier and consumers are afforded full protection under the ACL.
The specific actions Fitbit will need to take include:
Implications and key messages for other suppliers subject to the ACL
Authors: Lyn Nicholson & Adrian Zagami
Contacts:
Sydney
Lyn Nicholson, General Counsel
T: +61 2 8083 0463
E: lyn.nicholson@holdingredlich.com
Greg Wrobel, Partner
T: +61 2 8083 0411
E: greg.wrobel@holdingredlich.com
Melbourne
Dan Pearce, Partner
T: +61 3 9321 9841
E: dan.pearce@holdingredlich.com
Brisbane
Trent Taylor, Partner
T: +61 7 3135 0668
E: trent.taylor@holdingredlich.com
Disclaimer
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