Companies that breach competition and consumer laws are to face significantly harsher penalties following changes to the laws.
Welcoming the changes, the Chair of the Australian Competition and Consumer Commission (ACCC), Gina Cass-Gottlieb said they consisted of two parts, including increases in maximum penalties for breaches of some provisions in the Competition and Consumer Act 2010 including the Australian Consumer Law.
“Maximum penalties for companies that breach those provisions have increased to the greater of $50 million or three times the value derived from the relevant breach, or, if the value derived from the breach cannot be determined, 30 per cent of the company’s turnover during the period it engaged in the conduct,” Ms Cass-Gottlieb said
“The increase in penalties should serve as a strong deterrent message to companies that they must comply with their obligations to compete, and not mislead or act unconscionably towards consumers,” she said.
“These maximum penalty changes will allow the Courts to ensure that the penalties imposed for competition and consumer law breaches are not seen as a cost of doing business, but rather as a significant impost and something likely to raise the serious attention of owners or shareholders.”
Ms Cass-Gottlieb said the legal changes also introduced the first-ever penalties for businesses that included unfair contract terms in their standard form contracts.
She said that previously, the Courts could declare specific terms of a contract unfair and therefore void, but they were not prohibited and the Court could not impose any penalties on businesses that included them in standard form contracts.
Ms Cass-Gottlieb said the changes also clarified other aspects of the laws, such as more clearly defining ‘standard form contracts’.
“Standard form contracts provide a cost-effective way for many businesses to contract with significant volumes of customers,” the Chair said.
“However, by definition, these contracts are largely imposed on a ‘take it or leave it’ basis,” she said.
“The unfair contract terms laws are vital to protect consumers and small businesses against terms in these contracts that take advantage of this imbalance in bargaining power.”
