ACCC v Superfone

It is always a shame when regulatory action drives a genuine business out of business.

Here was a very small business which made some mistakes, admitted those mistakes and then sought to come to a settlement which would have allowed the business to continue trading and servicing its 1200 customers.

Unfortunately, that was not to be. The ACCC asked for a penalty of $400,000 plus redress which equated to 44% of the small business’s annual turnover and more than 80 times its net profit.

The ACCC ended up getting a penalty of $300,000 plus redress which equated to 34% of the small business’s annual turnover and more than 60 times its net profit. The ACCC was also awarded costs.

Definitely no winners here!

NB: I represented the company in the ACCC investigation and litigation. I did the litigation on a pro bono basis.

ACCC v Cussons

While I agree that the ACCC should not be deterred from running hard cases, they have to ensure that they run the hard cases better. As noted by Wigney J:

24 Regrettably, the Commission’s “hub and spoke” case also lacked clarity and particularity. As events transpired, it also lacked merit.

26 Somewhat peculiarly, though, the Commission elected not to cross-examine the rival expert witness called by Cussons.

44 There can be no doubt that the Commission’s loss at first instance in this case was emphatic. The Commission’s case failed at virtually every hurdle.

46 The apparent inability of the Commission to identify, let alone prove, precisely when and by whom the arrangement was made, or the understanding reached, may not have been fatal to the Commission’s case; but properly considered, it should have at least rung alarm bells.

48 It is difficult to avoid the conclusion that the Commission approached its case with a degree of tunnel vision; starting with the parallel conduct in March 2009 and then working backwards...

https://www.linkedin.com/feed/update/urn:li:activity:6787951642940723200/

Special Children's Christmas Party

 Happy to be supporting the Special Children's Christmas Party for our tenth year.

Full Court dismisses Volkswagen $125m penalty appeal

Wow! I didn't see this coming. The Full Federal Court has dismissed what was effectively a joint appeal by Volkswagen and the ACCC to reduce Judge Foster's $125 million penalty to the agreed Volkswagen / ACCC penalty of $75 million. The Full Court held that the $125 million penalty was ‘was not excessive, let alone manifestly excessive’.

Given that there is $50 million at stake you would expect a Volkswagen appeal but it looks like a very strong Full Federal Court bench, consisting of Justices Wigney, Beach and O’Bryan so I doubt the High Court would grant leave.

It is also a pretty embarrassing outcome for the ACCC who appear to have been off the mark in terms of penalty by a cool $50 million!

https://www.accc.gov.au/media-release/full-court-dismisses-volkswagen-125m-penalty-appeal

Superfone to pay $300,000 for making unsolicited calls and misleading consumers

 Superfone fined $300,000 on a turnover of $1 million = 30%

Telstra likely to be fined $50 million on a turnover of $27 billion = 0.18%

I think the numbers speak for themselves.

https://www.accc.gov.au/media-release/superfone-to-pay-300000-for-making-unsolicited-calls-and-misleading-consumers

Full Federal Court's decision on the Quantum unconscionability case

As expected the Full Federal Court has overturned Colvin J's incorrect intepretation of unconscionability in the Quantum case.

The Full Federal Court found that Colvin J was in error by holding that the taking advantage or exploitation of some vulnerability, disability or disadvantage of the person or persons to whom the conduct was directed was a necessary aspect of unconscionability within s 21 of the ACL (para 93)

The Court held at para 96 that:

Conduct by a commercial entity which, as here, systematically misuses its superior bargaining position by dishonestly misleading its counterparties and pressuring them by unjustified and unnecessary commercial requirements in a way that reflects a dishonest lack of good faith in undermining bargains previously reached in order to extract surreptitious and undisclosed financial benefits is against and offends an Australian business conscience.

I wonder how Colvin J's other unconscionable conduct case in Geowash is going to fare under Allsop CJ?

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCAFC//2021/40.html

ACCC authorises Queensland Dairyfarmers' Organisation to implement 'Fair Go Dairy' licensing scheme

Not too sure why the ACCC authorised this scheme - I can't see any public benefit. Given there are no public benefits and clearly some public detriment in terms of excluding non-Queensland dairy farmers from the market and setting a miniumum gate price for milk, I don't think the scheme should have been authorised.

I wonder if one of the milk processors may decide to challenge the scheme.

https://www.accc.gov.au/media-release/accc-authorises-queensland-dairyfarmers-organisation-to-implement-fair-go-dairy-licensing-scheme