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Inside track: Competition & Consumer

10 June 2020

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

ACCC rejects proposal to set minimum prices for Dewalt power tools
The ACCC has rejected a proposal by Stanley Black & Decker to set a minimum advertised price for Dewalt brand power tools, accessories and attachments. Stanley Black & Decker lodged a resale price maintenance notification on 17 October 2019 and on 27 March 2020 the ACCC issued a draft notice proposing to revoke; no submissions were received (05 June 2020).  More...

Vocus says NBN pricing still not fit for purpose
Vocus Group chief executive Kevin Russell says there is a pricing structure to the NBN that is not fit for purpose. The high wholesale prices charged by NBN Co have been a perennial point of friction between it and the retail telcos (05 June 2020).  More...

 Coronavirus 'exposing deep flaws' in Australia's medical device regulation
The chaos of the COVID-19 crisis has exposed deep flaws in the way Australia regulates medical equipment, critics say. Former ACCC Chairman Professor Allan Fels said manufacturers and vendors of substandard face masks could be prosecuted under consumer law, but the fact the TGA had allowed them to be listed on the ARTG could impede the success of any such case (03 June 2020).  More...

The game is up': Sydney burger chain's food fight with In-N-Out continues
A Sydney burger chain is again drawing the ire of US fast food legend In-N-Out Burger by launching a "Down N' Out" food truck, months after the Federal Court found the name to be "deceptively similar" and likely to cause confusion (03 June 2020).  More...

NBN Co misled Canberra consumers about needing to move to the NBN
NBN Co has admitted in a court-enforceable undertaking to the ACCC that it misled Canberra consumers who lived in areas where the NBN was operating into thinking that their telephone and internet services supplied over the TransACT Network would be disconnected if they did not move to the NBN (02 June 2020).  More...

Dairy farmers react to historic milk price announcement as new code of conduct takes effect
Under the new dairy code of conduct, milk processors all released their opening prices for the coming year simultaneously.  It was a requirement of the mandatory new code of conduct which was introduced to make things fairer for farmers and enable more competition in the sector (02 June 2020).  More...

Investigation into Qantas’s stake in Alliance Airlines continues
The ACCC is providing this update in response to queries by various stakeholders. The Australian aviation industry is in a state of major upheaval and now, more than ever, we are concerned that competition by smaller airlines is not hindered (01 June 2020).  More...

Federal Court orders sky high penalty against STA Travel
In the first decision to be handed down with respect to conduct covered by the new penalty regime under the Australian Consumer Law (ACL), the Federal Court has ordered that STA Travel Pty Ltd (STA Travel) pay a pecuniary penalty of $14 million for making representations that were false, misleading or deceptive in contravention of sections 18, 29(1)(g) and 34 when advertising its “MultiFLEX Pass” product. Updated 27 May 2020 Australian Competition and Consumer Commission v STA Travel Pty Ltd (29 May 2020).  More...

TGA initiates court proceedings against MMS Australia and director Charles Barton for alleged unlawful advertising
The TGA has initiated proceedings in the Federal Court of Australia in response to the alleged unlawful advertising of Miracle Mineral Supplement (MMS), dimethyl sulfoxide (DMSO) and other medicines by Southern Cross Directories Pty Ltd trading as MMS Australia (29 May 2020).  More...

Flu ad warning
The  Therapeutic Goods Administration (TGA) is reminding advertisers that they must not undermine public health campaigns, when promoting cold and flu treatments (28 May 2020).  More...

Airbnb 'turned their back' on customers with 'misleading' policy changes as COVID-19 crisis worsened
Klara Kalocsay is one of many disgruntled Airbnb customers globally who say the company's policy for refunding customers who have been forced to cancel their travel plans due to COVID-19 restrictions is packed with loopholes (28 May 2020). More...

GSK and Novartis to pay $4.5 million in penalties over Voltaren Osteo Gel claims
The Federal Court accepted admissions by Novartis Consumer Health Australasia Pty Ltd (Novartis) and GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (GSK) that they made false or misleading representations in the marketing of pain relief products (28 May 2020).  More...

Class action launched over Boral's fumble in the US
Maurice Blackburn has lodged a class action in the Federal Court against building materials supply company Boral. The class action law firm alleges Boral breached its continuous disclosure requirements and/or engaged in misleading or deceptive conduct in relation to its US business (28 May 2020).  More...

Allpulse Technologies fined $50,400 for alleged advertising breaches
The TGA has issued four infringement notices totalling $50,400 to Brisbane based company Allpulse Technologies Pty Ltd (28 May 2020).  More...

Canberra developers to pay compensation over 'misleading and deceptive' apartment GST charges
Three of Canberra's biggest property developers will pay compensation for misleading and deceptive conduct in charging homebuyers GST on apartments. The finding comes as a class action against the 136-unit Governor Place in Barton — a joint venture between the Morris Property Group and Doma Group — is awaiting the court to approve a $2.5 million settlement (25 May 2020). More...

Myth busted over COVID and 5G link
Australians have been warned to beware of misinformation linking Coronavirus to 5G mobile technology.
Chief Medical Officer, Brendan Murphy said the scientific evidence showed that wireless telecommunications, including 5G, do not weaken people’s immune systems and do not place us at higher risk of getting viruses such as COVID-19 (25 May 2020).  More...

Practice and regulation 

Farmers and processors need to know their dairy code rights and obligations
The mandatory industry code of conduct, which came into effect on 1 January 2020, requires most dairy processors to publish on their websites by 1 June standard form milk supply agreements to cover all the circumstances in which they intend to purchase milk in the coming financial year. The ACCC has published information on its website, including a fact sheet for farmers, to help ensure that all parties understand their rights and obligations under the new code (26 May 2020).  More...

Guidelines on Part XICA - Prohibited conduct in the energy market
These guidelines set out how the ACCC will interpret Part XICA of the Competition and Consumer Act 2010 (Cth) (CCA) and they explain the general approach the ACCC will take in investigating alleged contraventions of Part XICA (prohibiting certain conduct involving retail pricing, financial contract markets and electricity spot markets). Part XICA will be in effect from 10 June 2020 to 1 January 2026 (11 May 2020).  More....

News media bargaining code: Concepts paper
The ACCC has released a concepts paper seeking views on each of the issues to be covered in a mandatory code to address bargaining power imbalances between Australian news media business and each of Google and Facebook. Responses are due by 5 June 2020. View the concepts paper, (19 May 2020)

Container Refund Scheme - price monitoring review: issues paper
While the Queensland Government anticipates that beverage manufacturers will increase the price of beverages as a result of the scheme, this review was commissioned to ensure consumer interests are protected from unjustified pricing behaviours. Submissions are due by close of business 12 June 2019. They can be lodged online or via post.  More...

Cases

James v Australia and New Zealand Banking Group Ltd [2020] NSWCA 101
(1) Dismiss the summons filed on 3 October 2019 seeking leave to appeal from the order of Ball J dismissing an application to set aside the judgment entered on 16 May 2014.
(2) Order that the applicant pay the respondent’s costs in this Court.
JUDGMENTS AND ORDERS – setting aside – consent judgment – general power to set aside judgment or order – challenge to validity of agreement – whether judgment based on agreement – Uniform Civil Procedure Rules 2005 (NSW), r 36.15(1)
JUDGMENTS AND ORDERS – amending, varying and setting aside – consent judgement – orders entered – finality of entered orders
CONTRACTS – grounds for setting aside –  misleading  or  deceptive conduct  – non-disclosure of information – relevance of actual or constructive knowledge of silent party as to complainant’s beliefs – relevance of undisclosed beliefs of complainant
CIVIL PROCEDURE – Court of Appeal – leave to appeal – dismissal – lack of issue of principle, question of general public important or an injustice to the applicant going beyond merely arguable
Crimes (Sentencing Procedure) Act 1999 (NSW), s 43
Trade Practices Act 1974 (Cth), ss 52, 82

The Owners - Strata Plan No 87231 v 3A Composites GmbH (No 3) [2020] FCA 748
CONSUMER LAW – representative proceedings pursuant to Pt IVA of the Federal Court of Australia Act 1976 (Cth) – where applicant alleges products were not fit for purpose or not of merchantable or acceptable quality – where applicant claims loss or damage suffered arising out of defective building work – claims for statutory compensation and damages under the Trade Practices Act 1974 (Cth), the Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law
PRACTICE AND PROCEDURE – representative proceedings under Part IVA of the Federal Court of Australia Act 1976 (Cth) (FCA Act) – where order sought requires group members to register and provide certain information – whether Court has power to make such an order under s 33ZF of the FCA Act – whether order is appropriate to ensure that justice is done in the proceeding
PRACTICE AND PROCEDURE – claim for contribution – PRACTICE AND PROCEDURE – limitation provisions –loss or damage – whether “long stop” limitation provisions relating to defective building work applied to potential claims for contribution
Civil Procedure Act 2005 (NSW) ss 173, 177, 179(b), 183
Competition and Consumer Act 2010 (Cth) Sch 2 Australian Consumer Law ss 18, 29, 33, 54, 271, 236, 271, 327
Owners also alleges that 3A and Halifax made  misleading  representations or engaged in  misleading  conduct concerning the nature of the Alucobond panels contrary to ss 53 and 55 of the TPA and ss 29 and 33 of the AC

BPESAM IV M Limited v DRA Global Limited [2020] FCA 738
CORPORATIONS – selective share buy-back scheme – procedures in Div 2 of Pt 2J.1 of the Corporations Act 2001 (Cth) – general duty to make full and fair disclosure to shareholders – duty under s 257D(2) to disclose all information material to the decision how to vote on the resolution – special resolution passed approving share buy-back scheme – whether resolution invalid on the basis of incorrect financial information provided to shareholders – where valid shareholder approval was a condition precedent of the share buy-back agreements – whether s 259F of the Corporations Act cures any defect in the resolution – Knauf Plasterboard Pty Ltd v Plasterboard West Pty Ltd (in liq) (2017) 254 FCR 559 considered
CORPORATIONS –  misleading  or  deceptive conduct  – s 1041H of the Corporations Act and s 12DA of the Australian Securities and Investments Commission 2001 (Cth) (ASIC Act) – materiality – financial statements issued and then re-issued due to discovery of substantial errors – whether initial financial statements were materially  misleading  in relation to shareholder approval of a share buy-back scheme – where company represented that the erroneous financial statements were a true and fair view of the company’s position – where errors were not known and could not have been ascertained at the time of approval – consideration of subjective knowledge test under s 257D(2) and the objective test under s 1041H of the Corporations Act – principle in Fraser v NRMA Holdings Ltd (1995) 555 FCR 452 applied
CONTRACTS – construction – condition precedent for execution of share buy-back agreement – waiver clause – whether authority to waive is absolute or confined to certain circumstances – where the terms require consideration only of likelihood and timing of the condition precedent being satisfied – whether ambiguity in the terms is required for regard to be had to the commercial context – where both the terms and the commercial context indicate authority to waive is confined to specific circumstances only
REMEDIES – injunctions and declarations – sources of power to grant orders sought derived from s 23 of the Federal Court of Australia Act 1976 (Cth), s 1324 of the Corporations Act and s 12GD of the ASIC Act – whether a sufficient nexus exists between the injunction sought and the conduct that constitutes the contravention – whether policy considerations underlying s 259F(1) provide a discretionary reason not to grant an injunction – whether the applicants lack standing to pursue injunctive relief
REMEDIES – injunctions and declarations – relief sought in relation to share buy-back agreements – where applicant is not a party to the agreements – where the relevant counterparties to the agreements have not been joined – whether counterparties must be joined in order for the relief to be granted – consideration of the effect of the relief on the counterparties – whether counterparties would be entitled to set aside any adverse orders based on the principle in John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 – where relief sought is confined to enforcing the proper construction of the agreement – principle in News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410 applied
Trade Practices Act 1974 (Cth) s 52

Australian Competition and Consumer Commission v GlaxoSmithKline Consumer Healthcare Australia Pty Ltd (No 2) [2020] FCA 724
CONSUMER LAW – where parties agreed on the penalty and declarations to be made following admitted contraventions of ss 18, 29(1) and 33 of the Australian Consumer Law – where the respondents had conveyed by implied representation that there were material differences between two products, Osteo Gel and Emulgel, when in fact they were the same – held: agreed form of declaration and penalty of $4.5 million approved
COSTS – where the respondents had admitted some contraventions prior to the liability hearing and denied others – where the disputed contraventions were not made out – held: the respondents pay the applicant’s costs of the proceeding up to and including the date admissions were made – the applicant pay the respondents’ costs of the proceeding from the date after admissions were made up to and including the date of the liability judgment – the respondents pay costs thereafter
Australian Consumer Law (contained in Sch 2 of the Competition and Consumer Act 2010 (Cth)) ss 18, 29(1), 29(1)(g), 33, 224(4); Competition and Consumer Act 2010 (Cth) s 76(3); Evidence Act 1995 (Cth) s 191

Legislation

Commonwealth

Regulations

Competition and Consumer (Industry Codes—Franchising) Amendment (New Vehicle Dealership Agreements) Regulations 2020
29/05/2020 - These regulations amend the Competition and Consumer (Industry Codes—Franchising) Regulation 2014 to provide end of term arrangements, capital expenditure disclosure and access to dispute resolution for new car dealership agreements.

Competition and Consumer (Price Inquiries) Amendment Direction 2020
26/05/2020 – No longer in force - Date of repeal 28 May 2020

Bills

Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019
Assent Act no: 47 Year: 2020 25 May 2020
Introduced with the Telecommunications (Regional Broadband Scheme) Charge Bill 2019, the bill amends the: Competition and Consumer Act 2010 and Telecommunications Act 1997 in relation to: Layer 2 bitstream services; and statutory infrastructure providers; Competition and Consumer Act 2010 and Telecommunications Act 1997 and two legislative instruments in relation to local access lines; Competition and Consumer Act 2010, Telecommunications Act 1997 and Telecommunications (Consumer Protection and Service Standards) Act 1999 in relation to funding of fixed wireless broadband and satellite broadband; and National Broadband Network Companies Act 2011 to require NBN Co to provide certain data about premises connected, or due to be connected, to the NBN. Also repeals four declarations.

NSW

Regulations and other miscellaneous instruments
Electricity Supply (General) Amendment (Remote De-energisation and Re-energisation) Regulation 2020 (2020-226) — published LW 29 May 2020
Liquor Amendment (COVID-19 Licence Endorsements and Temporary Freezes) Regulation 2020 (2020-227) — published LW 29 May 2020
National Energy Retail Law (Adoption) Amendment (De-energisation and Re-energisation Charges) Regulation 2020 (2020-228) — published LW 29 May 2020

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

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