Mackay Chapman January & February 2024 ACCC Update

In this month’s ACCC update:

• Airbnb to pay $15m in penalties and up to $15m in compensation for misleading consumers;
• ACCC responds to merger reform proposals;
• Crusader Caravans pays penalties for allegedly misleading consumers about waterproof testing;
• Australia Post to pay approximately $2.9 million in compensation to businesses for lost or damaged parcels;
• Franchisors warned to remove unfair contract terms or risk legal action;
• Changes proposed to make childcare affordable and accessible for all families; and
• ACCC to examine prices and competition in the supermarket sector.

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‍Airbnb to pay $15m in penalties and up to $15m compensation for misleading consumers

The Federal Court has ordered Airbnb Ireland to pay $15 million in penalties and provide up to $15 million in compensation to eligible consumers after it admitted to misleading Australian users about the currency of prices on its accommodation platform. 

Between January 2018 and August 2021, Airbnb falsely represented that prices for Australian accommodation were in Australian dollars when, for about 70,000 consumers, they were in US dollars. 

The court found that consumers were deprived of making informed decisions, as they were charged more than expected due to the misleading conduct.  Airbnb must also pay part of the ACCC's costs and establish an Australian Consumer Law compliance program. 

The compensation scheme is expected to benefit around 63,000 affected consumers, with an average payment of about $230 per consumer. Airbnb will contact eligible consumers, and a consumer redress scheme has been established to address the impact of the misleading representations.

For more, head to the ACCC’s website.

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‍ACCC responds to merger reform proposals

The ACCC has warned that consumers and businesses in Australia will face higher prices and reduced choices if anti-competitive mergers continue unchecked. 

In a preliminary submission to the government's Competition Policy Review, the ACCC highlighted the impact of weakened competition on various sectors, emphasising that the current merger regime lacks the necessary tools to detect and prevent all anti-competitive mergers. 

The authority proposed reforms that would require firms to notify the ACCC of proposed mergers, aiming for a balance between minimal regulatory burden for non-anti-competitive acquisitions and a transparent process for potential anti-competitive effects. 

The submission also addressed concerns about companies using delaying tactics in the current informal enforcement regime. 

The authority sees the ongoing review as a crucial opportunity to establish competition rules aligning with international standards.

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‍Crusader Caravans pays penalties for allegedly misleading consumers about waterproof testing

CCMSM Manufacturing Pty Ltd, trading as Crusader Caravans, has paid $33,000 in penalties after the ACCC issued two infringement notices to it for allegedly making false or misleading representations about waterproofing tests on its caravans. 

The company published a checklist in its 2023 Buyers Guide suggesting it conducted tests for 'waterproofing in storm-like conditions,' but the tests were designed for water resistance, not waterproofing. 

The ACCC has emphasised the importance of accurate testing representations, especially considering the significant investment consumers make in caravans. The ACCC is actively monitoring the caravan industry to improve compliance with the Australian Consumer Law. 

Payment of the penalty specified in an infringement notice is not an admission of contravention.

For more, head to the ACCC website.

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‍Australia Post to pay about $2.9 million in compensation to businesses for lost or damaged parcels

Australia Post and its subsidiary StarTrack, have admitted they were likely to have engaged in misleading or deceptive conduct by not accepting compensation requests, and providing incorrect advice to some business customers, about non-payability of compensation for lost or damaged articles between October 2018 and October 2022. 

In a court-enforceable undertaking accepted by the ACCC, Australia Post and StarTrack have committed to providing compensation, estimated at $2.9 million, to about 10,500 affected business contract customers and fewer than 1,000 recipients of StarTrack deliveries. 

The ACCC has emphasised the importance of accurate treatment of consumer guarantee rights for business customers and commended Australia Post Group for self-reporting the conduct. 

Eligible customers will receive compensation automatically or can use the claims portal on the Australia Post and StarTrack websites. 

The compensation program aims to provide remedies to business customers who were entitled to consumer guarantee rights under the Australian Consumer Law. 

Customers must submit claims within 6 months from the date of contact by Australia Post Group.

For more, refer to the ACCC website.

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‍Franchisors warned to remove unfair contract terms or risk legal action

The ACCC has warned franchisors to review and amend their standard form franchise agreements or face potential enforcement action after a review of franchising contracts identified widespread concerns. 

The report outlines the ACCC's findings and concerns after completing targeted franchising compliance checks, urging franchisors to comply with unfair contract terms laws. 

ACCC Deputy Chair, Mick Keogh, expressed concern that every franchising agreement reviewed contained potentially unfair contract terms. 

Franchisors are advised to use the report to inform a review of all their contract terms, seeking independent legal advice about their obligations and removing or amending any potentially unfair terms to avoid potential penalties.

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‍Changes proposed to make childcare affordable and accessible for all families

The ACCC has concluded a year-long inquiry into childcare markets, finding that the current regulatory settings are not meeting key policy objectives for either accessibility or affordability. 

The final report includes eight recommendations and 31 findings, highlighting improved affordability post the Cheaper Child Care reforms in July 2023. However, previous affordability benefits were offset by fee increases. The report suggests different regulatory responses for adequately serviced, under-serviced, and unserviced markets, addressing issues like profit margins, labour shortages, and enrolment disparities for First Nations children. 

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‍ACCC to examine prices and competition in supermarket sector

The Federal Government has directed the ACCC to conduct an inquiry into the country's supermarket sector, focusing on pricing practices, the relationship between wholesale and retail prices, and overall competition. The ACCC has welcomed the directive and will undertake a year long inquiry.

The inquiry aims to address concerns about rising grocery prices and assess the correlation between farmgate prices and consumer prices, particularly for fresh produce. The ACCC plans to use its legal powers to thoroughly examine the sector, identify issues, and propose recommendations to the government. The inquiry will also explore changes in the competitive landscape since the ACCC's 2008 inquiry, considering barriers to competition, online shopping, technological shifts, and loyalty programs. 

An issues paper seeking public input is expected in February, with an interim report later this year and a final report in early 2023. The ACCC emphasises its expertise in competition, consumer law, agriculture, and the supermarket sector for this comprehensive inquiry.

Read more in our article on the Mackay Chapman website.

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‍The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.