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Inside track: Competition & Consumer

31 March 2021

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

Superfone to pay $300,000 for making unsolicited calls and misleading consumers
The Federal Court has ordered telecommunications provider Superfone to pay $300,000 in penalties for making false and misleading representations and breaching laws designed to protect consumers from unsolicited telemarketing sales, in proceedings brought by the ACCC. More than 1400 consumers, including many elderly people, were contacted by Superfone’s telemarketing agents (26 March 2021).  More...

FE Sports to pay $350,000 penalty for resale price maintenance
The Federal Court has ordered wholesale distributor B & K Holdings (QLD) Pty Ltd, trading as FE Sports, to pay a $350,000 penalty after it declared by consent that FE Sports engaged in resale price maintenance in relation to cycling and sporting products. In total, 246 dealers were affected (24 March 2021).  More...

Warning to Google after advertiser used search engine to mislead investors
The corporate regulator has warned Google to carefully consider the implications of a court decision that found people were misled into tipping money into high-risk investments after following sponsored links in search results (23 March 2021).  More...

ASIC succeeds in Court action against Mayfair 101 for misleading and deceptive advertising
The Federal Court has found companies in the Mayfair 101 Group made statements that were false, misleading or deceptive in advertisements for its debenture products, following proceedings brought by ASIC in April 2020. ASIC is seeking pecuniary penalties, injunctions and corrective advertising (23 March 2021).  More...

Full Federal Court ruling provides vital clarification of the law on statutory unconscionable conduct
The Full Federal Court has upheld an appeal by the ACCC and declared that Quantum Housing Group Pty Ltd engaged in an unconscionable system of conduct in its dealings with investors regarding the National Rental Affordability Scheme, in breach of the Australian Consumer Law (22 March 2021).  More...

ASIC bans Forex Capital Trading director Shlomo Yoshai for 10 years after reports of 'Wolf of Wall Street' culture
The ASIC has handed lengthy bans to the director and former employees of an online foreign currency trader.
In May last year, ASIC cancelled ForexCT's financial services licence after finding it had engaged in "unconscionable conduct, misleading and deceptive conduct and a failure to manage conflicts of interest" (17 March 2021).  More...

Two Propel-owned funeral homes pay penalties for alleged misleading local ownership claims
WT Howard Funeral Services and Coventry Funeral Homes, trading as Fitzgerald’s Funerals, have each paid $12,600 in penalties after the ACCC issued each of the businesses with an infringement notice for allegedly making a false and misleading representation about their ownership (17 March 2021).  More...

Practice and Regulation

ACCC feedback: Choice and competition in search and browsers
The ACCC has released an issues paper, ‘Digital Platform Services Inquiry – September 2021 Report on market dynamics and consumer choice screens in search services and web browsers’ It is seeking submissions in response to the issues paper by 15 April 2021.  More...

ACCC Note: Screen scraping warnings not anti-competitive
The ACCC, responding to questions on notice as part of a parliamentary inquiry by the Senate Select Committee on Financial Technology and Regulatory Technology, said that “statements or warnings regarding potential security or safety risks associated with screen scraping and sharing passwords … does not appear to have the purpose or effect of substantially lessening competition.” On 24 April 2020, the reporting date was extended from the first sitting day in October 2020 to 16 April 2021.

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.

Cases

Australian Competition and Consumer Commission v Superfone Pty Ltd [2020] FCA 278
CONSUMER LAW – contraventions of ss 18, 29(1)(h), (g) and (m), 76, 77, 78, 79 and 86 of the Australian Consumer Law (ACL) – principles relevant to injunctive relief, imposition of a pecuniary penalty, non-party consumer redress orders and publication orders – whether appropriate to make non-party consumer redress order under s 239 of ACL – not necessary to individually identify which persons are non-party consumers or the nature of loss or damage suffered – injunctive relief, pecuniary penalty, non-party consumer redress orders and publication orders made
Competition and Consumer Act 2010 (Cth); Evidence Act 1995 (Cth); Fair Work Act 2009 (Cth)
Federal Court of Australia Act 1976 (Cth); Trade Practices Act 1974 (Cth); Trade Practices Amendment (Australian Consumer Law) Act (No 1) 2010 (Cth); Penalty Interest Rates Act 1983 (Vic); Treasury Laws Amendment (2018 Measures No. 3) Bill 2018

Australian Competition and Consumer Commission v B & K Holdings (Qld) Pty Ltd [2021] FCA 260
COMPETITION LAW – resale price maintenance – admitted contraventions – agreed penalties and other relief – pecuniary penalty – declaratory relief – injunctive relief – adverse publicity order – compliance program – whether orders sought by agreement appropriate in the circumstances – agreed orders appropriate
COMPETITION LAW – adverse publicity order pursuant to section 86D of Competition and Consumer Act 2010 (Cth) – whether adverse publicity order must include publication of advertisement – unnecessary to resolve issue
Competition and Consumer Act 2010 (Cth), ss 48, 76, 80, 86C, 86D, 96
Federal Court of Australia Act 1976 (Cth)

Australian Securities and Investments Commission v Mayfair Wealth Partners Pty Ltd (No 2) [2021] FCA 247
CORPORATIONS – representations made to investors in promissory notes – representations made in promotional and marketing materials – representation that notes were comparable to, and of similar risk profile to, bank term deposits – representation that principal would be repaid in full – representation that notes were specifically designed for investors seeking certainty and confidence in investments and notes therefore carried no risk of default – representation that the “M Core Fixed Income Notes” were fully secured financial products – assessment of the terms of the promissory notes – assessment of expert evidence as to security position – assessment of report of provisional liquidators of the third defendant
CORPORATIONS – false, misleading or deceptive conduct – representations contravened s 1041H(1) of the Corporations Act 2001 (Cth) and ss 12DA(1), 12DB(1)(a) and 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth) – relevant principles concerning false, misleading or deceptive conduct – principles relevant to declarations – declarations made that conduct was in contravention of s 1041H(1) of the Corporations Act 2001 (Cth) and ss 12DA(1), 12DB(1)(a) and 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth)
Australian Securities and Investments Commission Act 2001 (Cth), ss 12BB(1), 12DA(1), 12DB(1)(a), 12DB(1)(e), 12BAB(1)(b), 12BAB(7)(b), 12GBA, 12GD, 12GLA(2)(c), 12GLA(2)(d) and 12GLB
Corporations Act 2001 (Cth), ss 766C(1)(b), 769C, 1101B(1)(a), 1041H(1), 1041H(2)(a) and 1324
Federal Court of Australia Act 1976 (Cth), s 21

Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2021] FCAFC 40
CONSUMER LAW – where company admitted to unconscionable conduct by a system or pattern of behaviour in contravention of s 21 Australian Consumer Law (ACL) – where penalties and declarations agreed with regulator – where primary judge found the majority in Australian Securities and Investments Commission v Kobelt [2019] HCA 18 considered s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth) requires exploitation of some disadvantage or vulnerability by a stronger party and therefore s 21 of the ACL also requires those features to be present in the conduct – primary judge not satisfied investors, to whom the company’s conduct was directed, could be characterised as vulnerable or exploited – primary judge found no contravention of s 21 – whether judge found exploitation of a special disadvantage in the equitable sense is required under s 21 – whether Kobelt, precedent or statutory interpretation requires that exploitation or taking advantage of some pre-existing vulnerability, disadvantage, or disability is a necessary element of statutory unconscionability under s 21 ACL – appeal allowed.
Australian Securities and Investments Commission Act 2001 (Cth) ss 12CA, 12CB, 12CC
Competition and Consumer Act 2010 (Cth) Schedule 2 (Australian Consumer Law) ss 20, 21, 22
Trade Practices Act 1974 (Cth) ss 51AA, 51AB, 51AC, 52A

Good Living Company Pty Ltd as trustee for the Warren Duncan Trust No 3 v Kingsmede Pty Ltd [2021] FCAFC 33
CONSUMER LAW – appeal – where appellants provided security for bank guarantee required by lease between a related company and the respondents – where respondents called on bank guarantee prior to entry into deed of settlement and release – where respondents were unaware that appellants had provided security – where respondents received and retained moneys provided after bank guarantee was called – whether the calling on and collecting of money the subject of the bank guarantee constituted unconscionable conduct in contravention of s 20 and s 21 of Sch 2 to the Competition and Consumer Act 2010 (Cth) – whether primary judge erred in not finding unconscionable conduct – whether primary judge erred in analysis of s 20 and s 21 – whether primary judge failed to consider pleaded case – whether the primary judge erred in not finding special disadvantage – whether the primary judge erred by not finding entitlement to relief – appeal dismissed
Australian Securities and Investments Commission Act 2001 (Cth) s 12CB
Competition and Consumer Act 2010 (Cth) Sch 2, ss 20, 21, 22, 236, 237
Trade Practices Act 1974 (Cth) s 51AC
Explanatory Memorandum, Competition and Consumer Legislation Amendment Bill 2010 (Cth)
Explanatory Memorandum, Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (Cth)

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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