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Inside track: Competition & Consumer

31 August 2021

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

Apple accuses CBA of ‘misleading’ digital wallets inquiry
Apple has fired back at accusations it guards its mobile payment technology in an anticompetitive way, accusing its critics, including the Commonwealth Bank’s boss, of misleading a parliamentary inquiry and wanting to reduce their own competition (27 August 2021).  More...

Sims proposes change to merger laws
In his annual Law Council address, ACCC Chair, Rod Sims, kicked off debate on the appropriateness of Australia’s merger control regime, highlighting four areas in need of particular attention that include the need for recognition that acquisitions of rivals by firms with substantial market power are more likely to cause harm. View full speech (27 August 2021).

Santos sued over ‘clean energy’ claims
Santos’ claims that it produces clean energy and has a pathway to reach net zero emissions are being challenged in the Federal Court by an activist group that alleges the company has breached corporations and consumer laws, engaging in misleading or deceptive conduct by claiming in its 2020 annual report that natural gas provides “clean energy” (26 August 2021).  More...

ACCC seeks insights on interstate rail network regulation
The way that Australia’s interstate rail network is regulated is under review and the ACCC has released an issues paper calling for input from businesses that rely on the network. ACCC Commissioner Anna Brakey said it is important that the regulatory framework for the interstate network protects users by preventing ARTC, as a monopoly, from exercising market power (25 August 2021).  More...

The ACCC authorises collective procurement of residual waste services by Gippsland Councils
The ACCC has decided to authorise the Gippsland Waste and Resource Recovery Group and 6 councils located in Gippsland, Victoria, to jointly tender, procure and manage residual waste services (25 August 2021).  More...

Phoenix Institute acted unconscionably and misled students
The Commonwealth has already cancelled the debts of eligible students enrolled by Phoenix, so consumer redress has been achieved. Unfortunately, the ACCC did not take legal action against any of the individuals behind the Phoenix Institute. Therefore, declarations, injunctions, penalties and other orders against these two companies will serve no practical purpose (24 August 2021).  More...

Thales appeals court judgement
Thales has appealed a judgement made by the Queensland Supreme Court related to the issues involving the underslung 40mm grenade launcher on the AusSteyr EF88 rifle. "The appeal is against both the breach of confidence and the misleading and deceptive conduct rulings, on the basis that Thales was incorrectly found liable based on inferences that were not supported by the evidence (23 August 2021).  More...

Small business contacts continue to rise during pandemic
The ACCC received over 3,500 contacts from small businesses in the first six months of this year, the highest number of contacts in the last two years. In the first six months of this year, the ACCC undertook a range of enforcement action in the small business, franchising and agriculture sectors, which include ordering Jump Swim (in liquidation) to pay penalties of $23 million for making false or misleading representations.  More...

CBA to publish misconduct notices for overcharging interest
The Federal Court has made orders requiring the Commonwealth Bank of Australia (CBA) to publish notices on its website and its newsroom acknowledging the bank’s false or misleading conduct when it overcharged interest on business overdraft accounts (16 August 2021).  More...

CDPP withdraws criminal cartel charges against CFMMEU and O’Mara
The CDPP has withdrawn criminal cartel charges against the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and ACT Divisional Branch Secretary, Jason O’Mara.The allegation was that the CFMMEU and O’Mara ‘attempted to induce suppliers of scaffolding services to enter into cartel arrangements regarding prices for scaffolding services provided to builders in the ACT in 2012 to 2013 (17 August 2021)’.  More...

Why Clive Palmer’s lockdown ads can be rejected by newspapers on ethical grounds
The laws regulating political advertising are minimal. Section 329 of the Commonwealth Electoral Act is confined to the issue of whether a publication is likely to mislead or deceive an elector in relation to the casting of a vote. It has nothing to say about truth in political advertising for the good reason that defining truth in that context would be highly subjective and therefore oppressive (16 August 2021).  More...

Practice and Regulation

ACCC Issues Paper: Digital Platform Services Inquiry – March 2022 Report on general online retail marketplaces
The ACCC will consider pricing practices; the use of data; the terms and conditions imposed on third-party sellers; and the impacts on competition when the marketplace itself operated as a seller on the platform. Submissions to the inquiry open until 19 August. The ACCC’s Issues Paper, including information on how the have a say, can be accessed here.

Cases

Australian Competition and Consumer Commission v Employsure Pty Ltd [2021] FCAFC 142
CONSUMER LAW – misleading or deceptive conduct and making false or misleading representations by causing the publication of Google advertisements in contravention of ss 18(1), 29(1)(b) and 29(1)(h) of the Australian Consumer Law – use of keywords and dynamic keywords in relation to paid Google advertisements – relevant principles in relation to misleading or deceptive conduct and false or misleading representations – appropriate approach to appellate review in a case involving an evaluative decision – whether primary judge erred in the attribution of characteristics to the broad and diverse target audience of the advertisements – whether ordinary or reasonable class members taking care of their own interests were likely to have a range of reasonable reactions to the Google advertisements – whether the primary judge erred in conceiving of only one reasonable reaction – whether primary judge erred in finding the Google advertisements did not convey the alleged representations – whether primary judge erred in relying on the “not insignificant number” test – appeal upheld – matter remitted to primary judge on questions of pecuniary penalty and costs of the proceeding below
Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law) ss 18, 21, 23, 24, 29; Evidence Act 1995 (Cth) s 140; Trade Practices Act 1974 (Cth) ss 52, 53

Belflora Pty Ltd v Vinflora Pty Ltd [2021] NSWCA 178
COMMERCE – restraint of trade – validity and reasonableness – legitimate interests – where restraint imposed a blanket protection from importation of goods from a subcontinent – whether blanket protection directed to preserve or maintain a personal or corporate relationship with a supplier – where restraint did not relate to any particular supplier – Restraints of Trade Act 1976 (NSW), s 4 COMMERCE – restraint of trade – validity and reasonableness – public policy – where restraint imposed a blanket protection from importation of goods from a subcontinent – whether restraint was against the public interest – where restraint prohibited respondents from competing in the market for the supply and sale of goods from a subcontinent – Restraints of Trade Act 1976 (NSW), s 4.

Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2) [2021] NSWSC 1025
CONSUMER LAW – misleading and deceptive conduct – whether company officers made misleading statements when signing drawdown and rollover notices – whether representations made by company officer personally or as company organs – held company officers did not personally engage in misleading and deceptive conduct CORPORATIONS – insolvency – whether company insolvent – application of test under Corporations Act 2001 (Cth) – where company alleged not to be able to repay future debt – where future debt not current – application of civil standard of proof to future or hypothetical event – where ability to compromise debt relevant to the question of insolvency – use of hindsight – where use of hindsight impermissible – where hindsight used not to show what was possible or likely at some point in the past but to establish a fact at an earlier point PERSONAL PROPERTY – assignment of choses in action – prohibition on assignment of bare chose in action TORTS – duty of care – whether company officers owed a duty of care to lenders in signing drawdown and rollover notices – Whether company officers personally made representations contained in drawdown and rollover notices and owed a duty of care to lenders when making representations – whether representations made by company officers personally or as company organs – held company officers did not owe a duty of care – held representations made on behalf of the company – held unreasonable for lenders to rely on representations as representations made personally by company officers – breach – where claim that company officers did not turn their mind to the question whether representations in the notices were true and did not make their own inquiries – held company officers entitled to rely on management to be told if representations in the notices could not be made – causation – causation not found on the facts TORTS – duty of care – held no reason to recognise a duty of care between sophisticated commercial entities when consequences of breach of contract are already set out in the agreements TORTS – duty of care – whether director owed a duty of care to lenders before instructing company officers to draw all funds from facility agreements with lenders – held director or employee does not owe a duty of care to avoid economic loss to third party when making and communicating a decision to another employee TORTS – duty of care – accessorial liability – directing or procuring breach of contract – held director and employee not liable for directing or procuring breach of contract when director did not act personally but as an organ of the company – directing or procuring breach of duty – held that there is no duty in tort to take reasonable care to perform a contract TORTS – negligence – where claim brought under negligent misstatement and negligence as two separate causes of action – where officer of the company found to owe the lenders a duty of care in circumstances where lender made specific enquiries and officer could reasonably be expected to know or find out relevant information – where reliance not proved on the facts TORTS – negligence – whether legal advice was negligent and misleading and deceptive – where allegation not proved DAMAGES – quantification – alternative methodologies – damages calculated comparing the position in which the lenders would have been but for the defendants’ wrongful conduct – damages calculated assuming that but for the defendants’ wrongful conduct the company would have entered into voluntary administration earlier than it did – where counterfactual not subject of evidence – whether plaintiffs entitled to compound interest as damages –whether claim should be converted into Australian dollars

Australian Securities and Investments Commission v Bank of Queensland Limited [2021] FCA 957
CONSUMER LAW - small business lending contracts - unfair contract terms within the meaning of s 12BG(1) of the Australian Securities and Investments Commission Act 2001 (Cth) - agreed facts - where bank concedes impugned terms unfair - where impugned terms include terms relating to indemnities, events of default, unilateral variations and conclusive evidence - where parties seek declarations under s 12BF, s 12BG and s 12GND that terms unfair and void - declarations made - orders made varying contract terms under s 12GNB - undertaking proffered
Australian and Securities Investments Commission Act 2001 (Cth) ss 12BAA, 12BF, 12BG, 12BH, 12BK, 12GB, 12GNB, 12GNC, 12GND, Division 2, Part 2
Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) s 24

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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