The new requirements include attaching permanent warning labels, information on anchoring products in manuals and assembly instructions, and providing warnings to consumers in furniture stores and online.

The guidelines apply to chests of drawers, wardrobes, bookcases, hall tables, display cabinets, buffets, and sideboards with a height of 686 mm, as well as all entertainment units, allowing suppliers a 12-month transition period of implementation.

“Suppliers face serious penalties for non-compliance, with penalties up to $50 million for businesses and $2.5 million for individuals,” said Catriona Lowe, ACCC’s deputy chair.

As part of the customers’ injuries, especially those of children and elderly people, ACCC has provided consumer advice and supplier guidance on complying with the mandatory standard.

“Suppliers must meet these requirements, and the ACCC will be working with state-based consumer agencies to monitor compliance and take enforcement action if appropriate.”

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ACCC chair, Gina Cass-Gottlieb, said the regulator is “concerned about the level of influence social media platforms hold over users” and their position as “critical intermediaries” for businesses to reach customers.

Issues such as excessive data collection, lack of effective dispute resolution options and transparency, scams and insufficient disclosure of sponsored content by influencers and other brands warrant a systemic reform.

The report also found Facebook-parent Meta possessing a “significant market power” in operating social media services as Australians spend more time on Facebook and Instagram combined compared to other platforms.

“Limited competition in these services can lead to poorer outcomes for consumers and small businesses,” Gottlieb said.

Gottlieb has urged implementing specific reforms including mandatory processes for consumers and businesses to report on social media platforms to remove scams, harmful apps and fake reviews, and establishing an external Digital Ombudsman Scheme.

This story first appeared on our sister publication Internet Retailing

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The amendment will introduce penalties and other changes relating to unfair contract terms, as well as significant increases in maximum penalties for breaches of certain provisions of the Competition and Consumer Act including the Australian Consumer Law.

These maximum penalties will apply to a range of offences and civil penalty provisions under the Australian Consumer Law including unconscionable conduct, false or misleading representations, and harassment and coercion. They also apply to most civil and criminal offences under competition law, including cartel offences, the news media and digital platforms mandatory bargaining code provisions, the international liner cargo shipping provisions, and the prohibited conduct in the energy market provisions.

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. For individuals, the penalties also increased to $2.5 million.

Penalties for unfair contract terms will come into effect the day after 12 months have passed after the bill receives Royal Assent but the higher CCA penalties will apply the day after Royal Assent is granted.

“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,” ACCC Chair Gina Cass-Gottlieb 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.”

Before the amendments introduced penalties for businesses that include unfair contract terms in their standard form contracts with consumers and small businesses, the Courts could declare specific terms of a contract unfair and therefore void, but it could not impose any penalties on businesses that included them in standard form contracts.

“We have long highlighted the adverse consequences of unfair contract terms on consumers and small business, including franchisees, and suggested that they be outlawed and penalties are required to provide a stronger incentive for businesses to comply,” Cass-Gottlieb added.

“Businesses have 12 months to review and update their standard form contracts before these penalties apply. These changes will improve small business and consumer confidence that they will not be taken advantage of when entering into or renewing standard form contracts in the future,” she added. “Many small business complaints about big business are about unfair contract terms and it will be an enormous boost to small businesses that there will be a far stronger deterrent against the use of such terms.”

The changes will also expand coverage to more small business contracts, up to small businesses which employ fewer than 100 persons or have an annual turnover of less than $10 million. The changes also clarify 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,” Cass-Gottlieb said. “However, by definition, these contracts are largely imposed on a ‘take it or leave it’ basis. 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. We are pleased that these laws have been strengthened.”

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In a speech at the recent Sydney Morning Herald Sustainability Summit, Rickard said that the ACCC is actively targeting ‘greenwashing’ this year, warning of consequences for businesses who make false or misleading environmental claims that undermine consumer trust and confidence in the market.

“Unfortunately, the ACCC is hearing growing concerns that some businesses are falsely promoting environmental or green credentials to capitalise on changing consumer preferences,” Rickard said. “Broad terms like ‘environmentally friendly’, ‘green’, or ‘sustainable’ have limited value and may mislead consumers, as they rarely provide enough information about what that exactly means in terms of the product or service consumers are considering purchasing.

“It is important that businesses can back up the claims they are making, whether through reliable scientific reports, transparent supply chain information, reputable third-party certification, or other forms of evidence,” Rickard added. “Where we have concerns, we will be asking businesses to substantiate their claims. The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims.”

Rickard also stressed that a multi-pronged approach is needed to make sustainability work for both businesses and consumers.

“The ACCC plays a part in this by ensuring that businesses tell the truth, but there will also be roles for standards bodies, certification schemes, industry and governments via policy reform,” she said. “The ACCC is actively monitoring green claims in the market and will be considering what steps can be taken to improve their integrity. This will include engaging with industry and producing guidance for businesses.”

Rickard warned that the ACCC will be looking into not only the nature of the claims but also what they would mean to the consumer.

“Many businesses go to extraordinary lengths to make their processes, products and services more sustainable. This innovation and investment should be protected from unscrupulous behaviour of other businesses making green claims without incurring the same costs,” she said. “This can have a chilling effect on investment in this space, as businesses are not able to realise the full benefits of making environmental improvements.”

Rickard acknowledged the efforts of businesses transitioning to more sustainable practices and recognised their right to promote the steps they are taking as part of that journey.

“A business’s sustainability transition doesn’t happen overnight – it’s a long process up and down the supply chain,” she conceded. “While businesses may look to use short and snappy slogans and claims, rather than lengthy explanations of measures underway, it is important to convey accurate information to consumers. Businesses in these positions need to be careful to not overstate the status of their transition through the claims they make.”

Rickard urged businesses to step into the shoes of a consumer before making environmental claims about a product, adding the ACCC is working with other regulators to take a coordinated approach to addressing a range of issues relating to sustainability.

“Consumers generally need to take at face value that claims made are truthful, and accurate,” she concluded.

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The investigation includes the Australian Competition and Consumer Commission, Canadian Competition Bureau, UK Competition, Markets Authority, the US Department of Justice Antitrust Division and New Zealand’s Commerce Commission.

Regulators say cartel conduct harms consumers by preventing businesses from providing quality services at better prices. Importers and businesses like retailers thus lose the ability to compete fairly if competitors agree on price-fixing, allocating markets, restricting outputs or services which is not necessary for any given situation.

The multilateral group is designed to share intelligence and use existing international cooperation tools to help detect cartel conduct arising from supply chain disruptions at a time when global supply chains are under enormous pressure through COVID impacting workers and transport services.

“We recognise that COVID-related supply chain issues have created significant challenges for economies worldwide, and here in New Zealand we’ve seen businesses respond by cooperating responsibly to ensure New Zealanders continue to be supplied with essential goods and services,” Commerce Commission chair, Anna Rawlings, said.

Rawlings stressed that there will be zero tolerance for unscrupulous business practices using COVID as an opportunity for cartel conduct. Individuals involved in cartel conduct can be liable for a term of imprisonment of up to seven years as well as financial penalties.

The Australian Competition and Consumer Commission deems cartels ‘immoral and illegal’ because they not only cheat consumers but other businesses, too.

Australia’s Competition and Consumer Act not only prohibits cartels under civil law but also makes it a criminal offence for businesses and individuals to participate in a cartel.

This story first appeared on our sister publication Inside Retail

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