In light of the recent COVID-19 pandemic, the competition watchdog, the Australian Competition and Consumer Commission (ACCC), has refocused its enforcement priorities and objectives for the year. Its intention is to mitigate the impact the COVID-19 crisis is having on businesses and consumers.
A newly established COVID-19 Taskforce is already in the process of educating businesses on their obligations in relation to refunds and cancellation of services as a result of the recent pandemic.
The ACCC has cautioned that consumers should be treated fairly and, where required at law or under contract, be offered full refunds for cancelled services or unavailable goods. It is vital businesses and suppliers are aware of their refund and cancellation obligations including under the law of ‘frustration of contracts’.
The ACCC will continue to monitor the market for and raise awareness of COVID-19 scams, particularly as scammers adapt old methods to prey on new fears at a time when large parts of the community are vulnerable.
Price gouging and misuse of market power
With the recent growth in unemployment, the ACCC wants to ensure that essential products and services (such as energy, communications and petrol) remain affordable. Price gouging is of significant concern to the ACCC. As a result of COVID-19, various hygiene and food products are in high demand and the prices for these goods have increased over recent weeks. The ACCC will police price gouging in relation to essential products and services and ensure businesses are not making misleading claims to purportedly justify increasing their charges.
The ACCC intends to continue its focus on penalising ‘misuses of market power’. Although excessive pricing may not itself be illegal, it may be a misuse of market power when done to some businesses. The ACCC will be carefully monitoring businesses to ensure they do not obtain a substantial degree of market power from engaging in such conduct.
Proposed company mergers will continue to be considered by the ACCC during this time, however it is expected that timeframes for applications will likely need to be extended.
The ACCC will consider exemptions where current obligations imposed on businesses seem impracticable and they will continue monitoring behaviours in crucial sectors including fuel pricing and broadband services.
Product safety will remain a priority for the ACCC. The Takata airbag recall is one of the most important and largest product safety projects the ACCC has underway. The vast majority of the 3 million affected vehicles have been repaired but the ACCC wants to ensure that all faulty products have been recalled.
During this time where many people are opting to use their private vehicles over public transport, the ACCC is reminding consumers to ensure they check whether their vehicles are subject to a recall.
Misleading or deceptive conduct in marketing and advertising
Preventing misleading or deceptive conduct in relation to marketing and advertising goods or services will continue to be a priority for the ACCC. Businesses need to be careful when making statements about the standard, benefit, quality or performance of their goods or services. This includes claims in connection with or relating to COVID-19. As certain products are now in high demand, the ACCC has warned suppliers to ensure that they do not misrepresent the features and benefits of a product or service. If a business is found in breach of these provisions, they face being penalised.
During these uncertain times for both businesses and consumers, the ACCC will be hypervigilant in ensuring that businesses do not exploit the current crisis for their own gain. Businesses should take a proactive approach and ensure compliance with Australian Consumer Law requirements. By failing to take these concerns into consideration businesses will be at risk of reputational damage and financial penalties.
KCL Law has extensive experience advising businesses of their obligations and consumers of their rights under the Australian Consumer Law.
For more information, or to discuss any of the issues highlighted above, please contact:
|Jeremy Goldman, Principal Lawyer|
Head of Commercial and Corporate
T (03) 8600 8886
|Daniel Kovacs, Principal Lawyer|
Co-Head of Intellectual Property and IT
T (03) 8600 8859
|David Weinberger, Principal Lawyer|
Head of Litigation and Dispute Resolution
T (03) 8600 8863
|Roger Rothfield, Special Counsel|
T (03) 8600 8895
This Competition and Consumer Law update was authored by Daniel Kovacs, Principal Lawyer.