Fair Trading and Consumer Law for Business in Australia

In today’s competitive climate, businesses cannot afford the harm and costs associated with anti-competitive and misleading or deceptive practices caused by failure to comply with relevant trading laws and regulations. As such, once you have established your business in Australia, you will need to be aware of the laws that govern the day-to-day trading operations of your business. These various laws, together with industry codes of practice, must be followed to ensure your business operates fairly and competitively and that all consumers are adequately informed and protected.

Federal Fair Trading Laws

Competition and Consumer Act 2010 (CCA):

The Competition and Consumer Act 2010 (formerly known as the Trade Practices Act 1974), is the main federal fair trading legislation. It applies to most corporations, sole traders and partnerships, and regulates the relationships among suppliers, wholesalers, retailers, competitors and customers. Its purpose is to facilitate fair trading in the market place, and is concerned with all aspects of trading in Australia such as conduct, contracts, arrangements affecting competition, prices, trade or commerce, and consumer safety. The CCA specifically covers:

• unfair market practices
• industry codes of practice
• mergers and acquisitions of companies
• product safety
• product labelling
• price monitoring, and
• the regulation of industries such as telecommunications, gas and electricity

These laws can also be used by businesses and consumers to obtain remedies against businesses who have breached these requirements. It has also introduced new financial penalties ranging up to $1.1 million for businesses and created significant reforms in major areas such as consumer guarantees, product safety and unfair contracts.

The Competition and Consumer Act is administered by an independent Australian Government statutory authority known as the Australian Competition and Consumer Commission (ACCC). The ACCC was formed to promote good business practices for a fair and efficient marketplace, providing businesses with information about federal competition, fair trading and consumer protection laws.

Australian Consumer Law

On 1 January 2011, the national Australian Consumer Law (ACL) came into effect as part of the Competition and Consumer Act 2010 and replaced a number of federal, state and territory laws around fair trading and consumer protection. The creation of this law means that businesses around Australia will operate under a single, national consumer law. It is part of the CCA and is jointly administered by the ACCC and the State and Territory consumer protection agencies.

There have been key changes under the ACL involving:

• Consumer guarantees
• New restrictions on door-to-door sales and other face-to-face marketing
• New requirements for contracts
• A national product safety law and enforcement system

State Fair Trading Laws and Codes

In addition to the Competition and Consumer Act 2010, each state and territory of Australia has its own set of Fair Trading laws which provide consumer protections similar to those available under the federal Act. In New South Wales Business behaviour law is governed by the Fair Trading Act 1987, and under the Act as well as other issues, it is unlawful to:

• Make false claims about a service or a product
• Operate in a misleading or deceptive way, or in a way that is likely to mislead or deceive
• Take unfair advantage of vulnerable customers (also called unconscionable conduct)

Each state and territory also has its own competition codes, with requirements much the same as those in the CCA. Each state and territory also has a fair trading office, which can only provide broad or general advice on your business rights and obligations under competition codes.

There are serious consequences for breaches of these fair trading laws. These include a number of penalties such as injunctions to stop you from continuing to break the law, prosecution through the courts, financial penalties, and freezing of bank accounts.

What can we do?

Given the effect and reach of these laws, businesses need to be mindful of their application in their commercial environment to ensure they avoid serious penalties. Here at Quinns we can advise you how to trade fairly and help you with any of the above issues. We support our clients in adopting protective measures to assist in minimising potential infringements, which can assist in avoiding substantial penalties. If you have issues regarding fair trading laws, Quinn Lawyers can advise you on the best way to proceed to protect your business and your financial future so enquire online using the Express Enquiry form on the right above or call us today on + 61 2 9223 9166.