Australia: Competition Review: January 2016


ACCC takes action against Woolworths for alleged unconscionable conduct towards supermarket suppliers

In proceedings filed in the Federal Court on 10 December 2015, the ACCC alleges that Woolworths Limited (Woolworths) engaged in unconscionable conduct in dealings with a large number of its supermarket suppliers through its 'Mind the Gap' scheme (the Scheme).

The ACCC alleges that the Scheme was designed to reduce Woolworths' expected significant half year gross profit shortfall, by obtaining payments from a group of 821 "Tier B" suppliers. These payments would range from $4,291 to $1.4 million and would be seen as "supporting" Woolworths (or, if not agreed, as not supporting Woolworths).

The ACCC alleges that these requests were made in circumstances where Woolworths was in a substantially stronger bargaining position, with the knowledge or indifference towards the fact that they had no contractual entitlement to seek payments or a legitimate basis for requesting a Mind the Gap payment from every targeted supplier.

Woolworths allegedly sought approximately $60.2 million in these payments and ultimately captured approximately $18.1 million. The ACCC alleges that these requests were unconscionable in all circumstances and commented that suppliers cannot properly budget for arbitrary claims for payments outside of trading terms.

The ACCC is seeking pecuniary penalties for the alleged conduct and costs. The penalty amount to be determined by the court will largely depend on how the court 'counts' the number of contraventions if Woolworths is found to have engaged in unconscionable conduct in contravention of the Australian Consumer Law (ACL).

In addition, the ACCC is also seeking a declaration that Woolworths engaged in unconscionable conduct and injunctions that Woolworths refund the $18.1 million in payments received under the Scheme to suppliers. The first Directions Hearing is on 1 February 2016 before Justice Yates.

Harvey Norman franchisee ordered to pay penalties of $52,000 for false or misleading representations about consumer rights

On 14 January 2016, the Federal Court ordered Bunavit Pty Ltd (Bunavit) (a Harvey Norman franchisee) to pay $52,000 in penalties for making false or misleading representations about consumer guarantee rights, in contravention of the ACL.

The Court held that sales representatives made misleading representations when they stated that Bunavit had no obligation to provide remedies such as refunds, replacements or repairs. Instead, the sales representatives stated that the consumer would have to pursue the manufacturer's warranty directly with the manufacturer, or pay for the cost of the repair.

The Court considered factors including that there were more impugned statements than in other comparable cases, the conduct occurred over a longer period, more staff members were involved, and Bunavit's turnover and profit were substantially higher than other offending companies. However, unlike some of the other cases, none of Bunavit's senior staff were involved.

The Court declined to make declarations because it considered the penalties were sufficient to address the conduct. It also declined to order injunctions, in part because Bunavit has ceased trading.

The ACCC has now obtained penalty orders totalling $286,000 against ten Harvey Norman franchisees for false or misleading representations regarding consumer rights.

Federal Court orders Electrodry franchisor to pay $215,000 in penalties for fake testimonials

On 18 December 2015, the Federal Court ordered the franchisor of the Electrodry Carpet Cleaning business, A Whistle & Co (1979) Pty Ltd (Electrodry), to pay penalties of $215,000 for its involvement in the publishing of fake testimonials on the internet. The Court found that Electrodry posted, and requested that its franchisees post, customer testimonials about the quality of carpet cleaning services, when those customers were fabricated and the services had not been provided. The relevant review websites included Google, True Local, and Yelp.

The Court noted that in deciding the amount of penalty to impose on Electrodry, a substantial discount for Electrodry's co-operation in the investigation and proceedings was warranted in the circumstances.

Kogan pays $32,400 penalty for alleged false or misleading representations in a Father's Day promotion

On 18 January 2016, the ACCC announced that online retailer Kogan.Com Pty Ltd (Kogan) paid $32,400 after the ACCC issued three infringement notices for false or misleading representations about the price of computer monitors. Kogan is a major online retailer and is well-known for selling electronic products.

The ACCC issued the infringement notices because it had reasonable grounds to believe that Kogan had made false or misleading representations about the price of three computer monitors advertised during its Fathers' Day promotion 2015 on its eBay store, in contravention of the ACL.

As part of the promotion, Kogan advertised that consumers would receive a 20% discount on the computer monitors if they were purchased between 24 and 29 August 2015. Before or at the start of the promotion, Kogan increased the prices of the three computer monitors. As a result, although consumers received a 20% discount off the newly increased prices, they in fact only received a 9% discount off the previously advertised prices for each of the monitors. Shortly after the promotion ended and the 20% discount offer ceased, the advertised prices of the three computer monitors returned to the lower prices offered on Kogan's eBay store before the promotion commenced.

ACCC accepts undertakings from BP, Caltex, Woolworths, 7-Eleven and Informed Sources

On 22 December 2015, the ACCC accepted from BP Australia Pty Ltd (BP), Caltex Australia Petroleum Pty Ltd (Caltex), Woolworths Ltd (Woolworths), 7-Eleven Stores Pty Ltd (7-Eleven), and Informed Sources (Australia) Pty Ltd (Informed Sources) a court enforceable undertaking in relation to its subscription to a petrol price information sharing service operated by Informed Sources.

The undertaking requires that Informed Sources will not supply a petrol price information exchange service unless it makes the information available to Australian consumers and third party information service providers.

The undertakings for BP, Caltex, Woolworths and 7-Eleven require that they will not enter into or give effect to any price information exchange service unless the petrol price information that they receive is made available to consumers and third party organisations.

The Federal Court has also ordered that proceedings against BP, Caltex, Woolworths, 7-Eleven and Informed Sources be discontinued. In August 2014, the ACCC instituted proceedings against Informed Sources and several petrol retailers alleging that the information sharing arrangements between Informed Sources and the petrol retailers allowed the retailers to communicate prices with each other and that these arrangements had the effect or likely effect of substantially lessening competition.

In August 2015, Mobile Oil Australia Pty Ltd accepted a court enforceable undertaking that it would not subscribe to the Informed Source information sharing service for a period of five years. In December 2015, Eureka Australia Petroleum Pty Ltd (trading as Coles Express) also accepted a court enforceable undertaking that it would not enter into any price information sharing service agreement that is similar to the one operated by Informed Sources.

ACCC accepts undertaking to preserve competition in child restraint wholesaling

On 18 December 2015, the ACCC announced it would accept a court enforceable undertaking offered by Nordic Capital Fund VII (Nordic) and Max-Inf Holdings Limited (Max-Inf). Nordic is proposing to acquire a controlling interest in Max-Inf.

Max-Inf is a Chinese manufacturer of child restraint systems, and supplies Infa-Secure Pty Ltd's (Infa-Secure) child restraint systems. Infa-Secure is one of the three main wholesalers of these products in Australia. Britax Childcare Pty Ltd (Britax), which is ultimately owned by Nordic, is a close competitor of Infa-Secure.

The undertaking requires Max-Inf to comply with the terms of a Transitional Supply Agreement between Max-Inf and Infa-Secure, which provides for continuity of supply and access to intellectual property rights to allow Infa-Secure to establish alternative supply arrangements. It also prevents Max-Inf and Britax from doing anything to hinder Infa-Secure obtaining child restraint systems, or accessing or using confidential information.

ACCC accepts undertaking from Optus

On 17 December 2015, Optus Internet Pty Limited (Optus) paid penalties totalling $51,000 for alleged false or misleading representations in relation to cable broadband internet speeds.

Between January 2015 and August 2015, Optus used the term 'nbn-like speeds' (a reference to the nbn" network) in advertising both its cable broadband service and particular cable broadband plans. The advertised price referred to a 30/2 plan, when nbn speed tiers go up to 50/20 and 100/40. Optus also offered a higher priced 100/2 service. However, in each case, the upload speeds were not comparable to upload speeds available over the nbn" network.

Optus also gave the ACCC a five year court enforceable undertaking, agreed to write to customers who joined its service during the advertised period and allow no cost cancellation (including refund of set up fees) and engage a third party to review its trade practices compliance (and implement any recommendations made).


Australian Consumer Laws Set For Review in 2016

On 1 December 2015, ACCC Chairman Rod Sims announced that Consumer Affairs Australia and New Zealand will conduct a review of the ACL in 2016. The final report is expected in March 2017.

During the keynote address at the Consumer Law Roundtable, Mr Sims flagged some possible areas for review, including:

  • the adequacy of the ACL penalty regime in delivering deterrence;
  • the application of the ACL to the sharing economy;
  • challenges around adopting trusted international product safety standards; and
  • in relation to phoenix companies.

On international product safety standards, Mr Sims said that the ACCC welcomes moves to reduce duplicative domestic regulation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions