Direct Selling Legal Update - July 2014
Welcome to our July 2014 Direct Selling Legal Update. In our Update, we cover some of the developments that have taken place in the last few months.
Misleading credence claims in the food & beverage industry – ACCC v Coles and other recent ACCC activity
The Federal Court has found that Coles Supermarkets contravened the Australian Consumer Law in relation to claims made about some of its baked bread products.
Australian Consumer Law - ACCC releases guidance on country of origin claims
Businesses now have a useful overview of the issues to be aware of under the Australian Consumer Law (ACL) when making claims about the country or place of origin of a product, with the ACCC’s release of a new guideline in April 2014 Country of origin claims and the Australian Consumer Law.
Have your say! The Competition Policy Review Panel wants to hear from you
Do regulatory restrictions adversely impact competition in your industry? Should misuse of market power be analysed by its effect rather than its purpose? Is it effective to have three different merger clearance processes? What is your experience in dealing with the ACCC?
Direct Selling Legal Update - March 2014
2014 has got off to a busy start with many local changes of relevance to the direct selling sector.
In this update, we consider the following matters and developments.
Misleading Company and Brand Names – ACCC v Kingisland Meatworks and Cellars Pty Ltd – Is Your Use of a Place of Origin in Your Company or Brand Name Allowed?
The ACCC v Kingsland Meatworks and Cellars Pty Ltd case involves interesting considerations about the use of a place of origin in a company or brand name, and when this may be considered misleading and deceptive and a false representation concerning the place of origin of goods. This decision is particularly interesting given credence claims is one of the ACCC’s current areas of priority.
Food and Grocery Code of Conduct - a Win for Suppliers?
The Australian Food and Grocery Council (AFGC) and Australia’s two largest supermarket retailers have announced that they have finally reached agreement on the terms of the voluntary Food and Grocery Code of Conduct (Code) which will govern supply chain relationships. Agreement was reached at the inaugural meeting of the Retailer and Supplier Roundtable, a food and grocery industry initiative designed to facilitate collaborative approaches on relevant issues. This comes following discussions by the parties over the last 14 months, which at times looked close to collapse.
The ACCC and the Food Industry – 2013 in Review
2013 marks a year when the ACCC has demonstrated its willingness to take decisive action against those in the food industry whom it thinks are breaching the Australian Consumer Law.
Direct Selling Legal Update - Oct 2013
2013 has seen many interesting developments which impact upon the direct selling sector from a legal and regulatory perspective. In this edition, we highlight and comment upon some of these developments and their implications for the direct selling sector.
Advertising Standards Board Determinations – Using Sexual Content and Avoiding Discrimination in Advertising
Advertisers should remain aware that not only must their advertising and marketing communications comply with the Competition and Consumer Act 2010, they should also comply with relevant advertising codes, otherwise complaints may be made to the Advertising Standards Board (ASB).
Three Million Reasons to Comply with Your Consumer Guarantee Obligations
Hewlett-Packard recently agreed to pay $3 million in civil penalties for making false and misleading representations about consumer guarantee rights following legal action by the Australian Competition and Consumer Commission.
ACCC v ByteCard - ACCC Cracking Down on Unfair Contract Terms
The Australian Competition and Consumer Commission (ACCC) has scored a victory in its first legal proceeding based exclusively on the new unfair contract terms provisions of the Australian Consumer Law (ACL).
The ACCC ups the Ante Against Woolworths
Already tense relations between the ACCC and supermarket giant Woolworths, have reached new heights. On 6 June 2013, the ACCC announced that it would oppose Woolworths’ acquisition of a single undeveloped supermarket site in the Western Sydney suburb of Glenmore Park. This decision is important both for the ACCC and the supermarket chains as it is the first time the ACCC has opposed the acquisition of an undeveloped site.
Tips for Using Social Media in Your Business
Social media has changed the way people and businesses communicate and interact. It allows businesses to increase brand awareness, advertise products and services, provide product information, run promotions, deal with bad publicity and gain customer feedback. Previously, engaging with customers online provided a competitive advantage; today social media is being engaged in to avoid falling behind.
Social Media: Aspects of the Australian Regulatory Landscape
Facebook reported it had more than a billion monthly active users and an average of 618 million daily active users in December 2012. If it was a country, it would have the third largest population in the world, behind China and India. In Australia, there are 11,677,680 users of Facebook, which is a penetration rate of 54.28% of the population. Social media is no longer just a tool to stay in contact with friends. Businesses are finding new ways to interact with their customers via social media. Businesses therefore need to stay on top of the case law and regulation in this area to ensure they do not find themselves falling foul of the law.
The ACCC’s Increased Vigilance and Armoury Makes Triple Checking Energy Efficiency Claims More Important than Ever
The Australian Competition and Consumer Commission (ACCC) recently instituted proceedings in the Federal Court of Australia against DuluxGroup (Australia) Pty Limited (Dulux). The ACCC alleges Dulux made false and misleading representations and engaged in misleading or deceptive conduct by claiming that two of its paints would cut energy consumption, when Dulux had no reasonable basis for making these claims.
Social Media - To What Extent Do Brand Owners Owe A Social Responsibility?
Social media sites such as Facebook and Twitter provide exciting and cutting-edge opportunities for brand owners to advertise their products and directly engage with their customers. However, company Facebook and Twitter pages have now been clearly held to be advertising so not only must their content comply with the Australian Consumer Law, it must also comply with the AANA’s Code of Ethics. The Advertising Standard Board’s October 2012 determination regarding Bendon’s “Take selfies with Besties” campaign shows that brand owners must also ensure their social media sites do not depict material contrary to prevailing community standards on health and safety.
“Product of Australia” and “Olive Oil” – the Latest Label Claims Attracting ACCC Focus
On 11 October 2012, the Chairman of the Australian Competition and Consumer Commission (ACCC) announced the release of two new consumer guides: * The Good Oil: A guide to buying the right olive oil for you (Olive Oil Labelling Guide), and * Where does your food come from? As a consumer, if you want to buy food from a certain country, this fact sheet tells you what to look for on the label (Food Origin Labelling Guide). The release of these two consumer guides follows shortly after the introduction of the Competition and Consumer Amendment (Australian Food Labelling) Bill 2012 (Food Labelling Bill) by the Australian Greens. Product labelling, particularly in relation to food, is a political issue and one the ACCC is very interested in too.
Direct Selling Legal Update - October 2012
Welcome to the latest edition of Addisons' Direct Selling Legal Update.
In this edition, we report on a number of interesting developments which affect those operating in the direct selling space.
Misleading Carbon Price Claims – the ACCC is Swift and Effective
On 26 July 2012, the Australian Competition and Consumer Commission (ACCC) released its second report in relation to carbon price complaints. While the number of complaints and enquiries is declining, there are still many complaints being made in relation to the energy, landfill, refrigerant gas and building and construction sectors. The ACCC has also been quick and effective in taking action against those making false carbon price claims, and has already issued an infringement notice and obtained three undertakings for false carbon price claims. Businesses must remain mindful of their obligations in this post 1 July phase.
Implications for General Counsel – the James Hardie Appeals
On 3 May 2012, the High Court delivered judgment in the James Hardie civil penalty appeals. This paper highlights the judgment’s practical implications for a person acting as general counsel and the scope of their duties and responsibilities.
ACCC v TPG – A Further Warning To Telecommunications Service Providers
On 26 April 2012, the Australian Competition and Consumer Commission once again demonstrated that the telecommunications industry remains a particular target for its enforcement activities, by issuing TPG Internet Pty Ltd with two infringement notices totalling $13,200 for misleading advertising.
ACCC Takes Urgent Interlocutory Action Against Apple iPad 4G Claims - Lessons to be Learnt from the ACCC’s Bite of the Apple
Apple Inc and Apple Pty Limited have just learnt a very costly lesson in the Federal Court of Australia and the public eye about ignoring warnings from the Australian Competition & Consumer Commission.
Competition & Consumer Quarterly
In this edition:
* Food Industry Beware - ACCC drawn to misleading and deceptive conduct like a bee to honey
* Federal Court decision on search engine marketing: sponsored links may be misleading but advertisers have only themselves to blame
* Slimming spray sales representations stopped overseas
Knock, knock. Who's there? - ACCC imposes infringement notices and accepts undertaking from a door-to-door sales company in respect of misleading representations made during in-home presentations
* ACCC issues surprising statistics about the first six months of the new mandatory reporting requirements under the product safety provisions of the Australian Consumer Law
ACCC issues surprising statistics about the first six month of the new mandatory reporting requirements under the product safety provisions of the Australian Consumer Law
On 1 January 2011, mandatory reporting requirements came into effect under the product safety provisions of the Australian Consumer Law. How broadly these reporting requirements are to be interpreted has been the source of much confusion in the consumer goods industry. On 16 August 2011, the ACCC released statistics regarding the number of reports it had received and the number of recalls that the reporting requirements had triggered in the first half of 2011. These statistics provide a useful insight into both how the industry is interpreting the mandatory reporting provisions, as well as the level of product recall triggered by mandatory reporting requirements to date.
Slimming spray sales representations stopped overseas
The ACCC has given us a timely reminder that the Australian Consumer Law reaches beyond Australian shores. If Australian companies engage in misleading or deceptive conduct or make false testimonials on the internet and those representations are therefore available overseas, those companies can still be injuncted in Australia and restrained from making further misleading or false representations.
Food Industry Beware – ACCC Drawn to Misleading and Deceptive Conduct like a Bee to Honey
It is well recognised that consumers are prepared to pay more for food products that have rare or artisan qualities which are treated in an ethically humane manner. Three recent actions in relation to “Just Organic” honey alleged to be from Kangaroo Island, meat alleged to be from King Island and “free to roam” chickens indicate that the ACCC is quick to take action if such claims cannot be substantiated.
Competition Quarterly - August 2011
In this edition:
* A new era in Australian competition regulation: Rod Sims now at the helm of the ACCC.
* Are your advertising disclaimers really effective? Optus learns a $5.26 million lesson on the topic.
* A Pyrrhic victory or the ACCC testing the boundaries? A$2.7 million penalty but on paper only.
* The creeping tale of creeping acquisitions ...
Australia - Claims relating to allergy treatments - further action by the ACCC
Food producers, alternative therapy providers and multi-level marketing companies that make claims about the potential for their products to address allergies, risk ACCC action if these claims are found to be misleading or deceptive.
Health Claims in Food Advertising: the Advertising Claims Board upholds a Complaint by Fonterra against Goodman Fielder in an industry first
The Food Standards Code (FSC) prohibits most “health claims” on labels and advertising for food. However, the statutory body responsible for enforcing the Food Standards Code in New South Wales, has rarely taken action for breach of these provisions. Nor has it given any publicly available guidance as to the extent of these provisions. Up until now, many members of the food industry have marketed the health benefits of a category of food (such as wholegrains, dairy or soy) rather than naming any health benefits of a particular brand of product of that manufacturer so as to avoid these provisions. That practice may now need to change given a recent decision of the Advertising Claims Board (ACB).
The ACCC’s Tough New Stance on Merger Clearance
The ACCC is increasingly identifying concerns with mergers or acquisitions which have a substantial impact on competition in a local or regional market. A recent example is the ACCC’s consideration of Murray Goulburn’s (MG) proposed acquisition of Warrnambool Cheese and Butter Factory Company (Warrnambool), which resulted in MG’s withdrawal of its request for merger clearance on 2 June 2010.
Direct Selling/Multi-Level Marketing - How will Phase 2 of the Proposed Australian Consumer Law Reforms Affect Your Business?
Australian direct selling organisations (DSOs) are likely to be impacted significantly if the changes proposed by the Trade Practices Amendment (Australian Consumer Law) Bill (No. 2) 2010 (ACL) become law.
Of particular concern are the provisions targeting door-to-door selling, telephone sales and other forms of direct selling which do not take place in a retail context.
Phase 1 of the Australian Consumer Law reform process begins!
Consumer protection provisions have been significantly expanded with the Senate passing the Trade Practices Amendment (Australian Consumer Law) Bill (Cth) (2009) (ACL Phase 1) on 17 March 2010. ACL Phase 1 amends the Trade Practices Act 1974 (Cth) (TPA) and the ASIC Act 2001 (Cth) by introducing new investigative and enforcement powers, new civil penalties and a national unfair terms regime. The civil penalties and enforcement powers take effect from 15 April 2010 and represent the first instalment of the ACL reform process. The unfair contract provisions will apply from 1 July 2010 with the remainder of the ACL reforms expected to be in place by 1 January 2011.