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Inside track: Competition & Consumer

04 August 2021

#Competition & Consumer Law

Inside track: Competition & Consumer

In the media

Privatise for efficiency, or not at all
Speaking at the 2021 ACCC/AER Regulatory Conference, Mr Sims discussed the need to either avoid monopolies, or if not then regulate them, to prevent costs to the economy arising from unfettered use of their market power. Mr Sims put forward two possible solutions to avoid privatisations creating future unfettered private monopolies (30 July 2021).  More...

ACCC appeals in NSW Ports competition case
The ACCC has lodged an appeal against the Federal Court’s decision to dismiss the ACCC’s proceedings against NSW Ports Operations Hold Co Pty Ltd and its subsidiaries Port Botany Operations Pty Ltd and Port Kembla Operations Pty Ltd (together, NSW Ports). The Court found that compensation provisions in the Port Commitment Deeds did not have an anti-competitive purpose or effect (27 July 2021).  More...

Restrictions on marketing of infant formula reauthorised
Studies submitted to the ACCC and anecdotal evidence from multiple submissions, including from healthcare professionals, indicated consumers could be confused between infant formula and toddler milk products and advertising. The issues raised by this application go beyond the scope of competition law, and raise significant health policy issues (27 July 2021).  More...

Simply Energy hit with $2.5m fine after sales contractors allegedly impersonated customers in scam
An Australian energy company has been fined $2.5m after two external door-to-door sales agents allegedly used false names and made-up accents to switch customers to new contracts without their consent. The commission says the agents allegedly used a combination of real and falsified details to contact Simply Energy pretending to be customers authorising the transfers (26 July 2021).  More...

ACCC takes investigation to market
The ACCC is to examine concerns relating to the competition and consumer activities of organisations such as eBay Australia, Amazon Australia, Kogan and Catch.com.au as part of its inquiry into digital platform services in Australia. The Commission would examine the marketplaces and their relationships with third-party sellers and consumers, as well as how the marketplaces affected competition in Australian markets (26 July 2021).  More...

BTFM, Asgard Capital fined $3m
The Federal Court will force BT Funds Management and Asgard Capital Management to pay $1.5 million each for charging fees for no service and making misleading statements. Between September 2014 and August 2017, the court found that the companies harmed 404 customers, leading to about 487 breaches of the Corporations Act (26 July 2021).  More...

Lactalis Australia in court for alleged Dairy Code breaches
This is the first time the ACCC has commenced proceedings for alleged breaches of the Code. The ACCC alleges Lactalis breached a number of provisions of the Code, and, in doing so, weakened the bargaining power of farmers who supply milk to them (26 July 2021).  More...

Lorna Jane pays $5 million over false ‘anti-virus activewear’ claims
The Federal Court has ordered penalties for making false and misleading representations to consumers, and engaging in conduct liable to mislead the public, in connection with the promotion and supply of its “LJ Shield Activewear”. The misleading representations were made on in-store signage, on its website, on Instagram, in emails to consumers and in media releases (23 July 2021).  More...

Greenwashing scrutiny needed: Evergreen
ASIC's research project into the extent of greenwashing in the investment management industry should be commended, according to Evergreen Consultants. Greenwashing in investments involves misrepresenting or overstating an investment fund's commitment to ethical or socially responsible investing (23 July 2021).  More...

Competition, consumer issues in general online marketplaces to be examined
The ACCC is keen to receive submissions from consumers, platforms and third-party sellers, to inform its inquiry, and has released an issues paper. The ACCC will examine the marketplaces and their relationships with third-party sellers and consumers, as well as how these marketplaces affect competition in Australian markets (22 July 2021).  More...

New Hope mining company referred to Asic, accused of misleading investors over future of coal
Investor action group Market Forces says coal company is ‘building a financial house of cards’ by telling shareholders coal will remain ‘significant’ in energy mix (21 July 2021).  More...

Viterra's Port Lincoln and Thevenard grain ports not exempt from Bulk Wheat Code
After looking at the South Australian grain industry and latest shipping data in detail, the ACCC consider that Viterra doesn’t currently face sufficient competition at its Port Lincoln and Thevenard facilities to justify removing certain protections for independent exporters (20 July 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.

ACCC Consultation: Facebook advertisements
Closes 1 September 2021 - The ACCC is aware of advertisements on Facebook about cryptocurrency products featuring the name or image of an Australian public figure. These advertisements might look like articles or posts in your Facebook newsfeed. We are concerned that the advertisements may be false or misleading.
If you see one of these advertisements on Facebook, please take a screenshot and submit it to the ACCC.

Cases

Watt v Shepherd (No 2) [2021] FCA 826
COMPETITION AND CONSUMER LAW – misleading and deceptive conduct – default judgment under r 5.23 of Federal Court Rules 2011 – unconscionable conduct – accessorial liability – inducement and reliance – unfair tactics – where Competition and Consumer (Industry Codes – Franchising) Regulation 2014 applied – where respondents made multiple misleading and deceptive representations to principal applicant – where respondents intended representations would induce principal applicant to invest and participate in franchising structure and influence other applicants to become franchisees – where representations were as to finance, future matters and profitability of franchise – where respondents lacked reasonable grounds for representations as to future matters – where respondents knew that principal applicant was in a position to influence other proprietors – where respondents knew fees payable by franchisees were not affordable or financially sustainable for franchisees – where respondents failed to make good earlier representations – where respondents failed to prepare or provide franchisees with disclosure documents, or receive from franchisees statement as to independent advice under cl 10 of Code – whether failure to provide documents required by the Code exposed franchisees to situation of vulnerability and disadvantage which was unconscionable conduct – representations made in trade or commerce within meaning of Competition and Consumer Act 2010 (Cth) and Australian Consumer Law – held: Representations were misleading and deceptive (ss 18, 21 of the ACL); representations constituted unfair tactics and unconscionable conduct (ss 22(1)(g) and 22(2)(g) of the ACL); first, second and third respondents accessorially liable; franchise agreements voided; default judgment for damages to be assessed (ss 82, 87 of the CC Act and ss 236, 237 and 243 of the ACL).

Johnson v Mackinnon [2021] NSWCA 152
CONSUMER LAW – misleading or deceptive conduct – representations – explicit false representations made in proposal document given to prospective investors in fraudulent betting syndicate scheme masterminded by notorious conman – appellant a member of partnership promoting scheme – whether appellant had knowledge of false representations – whether appellant jointly and severally liable for misrepresentations made in ordinary course of business of partnership – liability established APPEALS – from findings of fact and credibility – function of appellate court – circumstantial case – briginshaw standard – inferences from primary facts – whether open to be comfortably satisfied various factual findings, including inference that appellant knew of false proposal representations PARTNERSHIPS AND JOINT VENTURES – relationship of partners to persons dealing with them – liabilities of partner – partnership intended to be limited – unlimited because limited partnership agreement never registered – joint and several liability for misrepresentations made by other partner in ordinary course of business of partnership CONSUMER LAW – misleading or deceptive conduct – silence or non-disclosure – whether appellant represented that conman not involved in scheme – whether appellant had knowledge of various prerequisite facts such as notoriety, involvement, and alias of conman, and of need to conceal such information – appellant unable to demonstrate any of these findings as glaringly improbable – appellant ought to have known of reasonable expectation that conman’s involvement would be disclosed – appellant did not disclose and deliberately concealed conman’s involvement CIVIL PROCEDURE – pleadings – amendment – late application for amendment on second day of trial – amendments added alleged liability of appellant for representation by silence and clarified alleged liability of appellant for explicit proposal representations – whether appellant deprived of opportunity to make “no case” submission – whether primary judge failed to consider dictates of justice – not necessary to recite considerations seriatim – appellant not deprived of fair and reasonable opportunity to meet case – pleadings sufficiently clear and specific, and not unfairly open-ended CIVIL PROCEDURE – pleadings – construction of pleadings – subparagraphs of pleadings not in precise correspondence with each other – whether prejudicial construction by primary judge in finding that pleadings nevertheless sufficiently clear CONSUMER LAW – misleading or deceptive conduct – causation or reliance – whether respondent’s decision to invest caused by proposal representations – whether prospective investor would have been deterred by knowledge of involvement of notorious conman – gullible investors not disentitled to protection CONSUMER LAW – misleading or deceptive conduct – remedies – quantification of damages – whether primary judge failed to account for group members’ prior recoveries and respondent’s trading profits received from scheme – award of damages below only for respondent’s unpaid loan to scheme – prior recoveries and trading profits irrelevant CIVIL PROCEDURE – representative proceedings – remedies – award of damages to individual group member CIVIL PROCEDURE – Court of Appeal – notice of contention – reliance on claim in deceit in addition to misleading and deceptive conduct – deceit considered briefly in judgment below – contention material and advances respondent’s case in circumstances where appellant claims apportionment for misleading and deceptive conduct but cannot do the same for claim in deceit – notice of contention upheld and decisive of appeal – unnecessary to consider further aspect of notice, namely conspiracy TORTS – miscellaneous torts – deceit – relationship with misleading or deceptive conduct – apportionment defence available for misleading and deceptive conduct but not for deceit TORTS – joint and several liability – apportionment – primary judge disallowed late attempt to raise apportionment defence – disallowance denied a real prospect of significant reduction in liability – strongly arguable error in disallowance – unnecessary to consider further as respondent nevertheless able to rely on non-apportionable claim in deceit.

Madritsch KG & Anor v Thales Australia Ltd [2021] QSC 170
INTELLECTUAL PROPERTY – CONFIDENTIAL INFORMATION – INFORMATION PROTECTED – – USE OF INFORMATION – – OBLIGATION OF CONFIDENTIALITY – TRADE AND COMMERCE – OTHER REGULATION OF TRADE OR COMMERCE – RESTRAINTS OF TRADE – VALIDITY AND REASONABLENESS – PARTICULAR CASES – COMMERCIAL TRANSACTIONS – GENERALLY– where the defendant contends that the clauses of the NDA prohibiting the use of the relevant information are unenforceable as unreasonable restraints of trade – where pursuant to section 4 of the Restraints of Trade Act 1976 (NSW) a restraint of trade is valid to the extent to which it is not contrary to public policy – where whether it is contrary to public policy is determined with regard to the legitimate interests of the parties and the interests of the public – whether, in light of the defendant’s breach, the relevant clauses of the NDA were reasonably necessary to protect the interests of the plaintiffs in the relevant information
TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS – MISLEADING OR DECEPTIVE CONDUCT GENERALLY – MISLEADING OR DECEPTIVE: WHAT CONSTITUTES –– where the defendant expressed its interest in producing the Madritsch Solution under licence from the second plaintiff – where the defendant received a draft sub-licence agreement and quickly formed the view it intended to reject it – where the defendant took steps that led the plaintiffs to believe it was considering the offer with a view to accept it or make a genuine counter offer – whether the defendant engaged in misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law
CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – AGREEMENTS CONTEMPLATING EXECUTION OF FORMAL DOCUMENT – WHETHER CONCLUDED CONTRACT
Competition and Consumer Act 2010 Cth Sch 2 (Australian Consumer Law) s 18; Restraints of Trade Act 1976 NSW s 4.

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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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