Federal Court orders following ACCC action assists small businesses regarding internet registration

Small businesses are better protected from misleading demands over Internet re-registrations, after an action by the Australian Competition and Consumer Commission.

The Federal Court, Brisbane has declared that conduct by Mr Stephen Henry Wayt, the proprietor of COM. AU. REGISTER breached the fair trading provisions of the Trade Practices Act 1974.

The ACCC had alleged that between January and March last year, COM. AU. REGISTER sent businesses and organisations throughout Australia a fax that was likely to mislead recipients into believing that COM. AU. REGISTER was responsible for registering Internet domain names where it did not and could not provide that service. It was also likely to mislead businesses and organisations who had paid or were contemplating payment, into believing that they had previously had business dealings with COM. AU. REGISTER when they had not.

The ACCC also alleged that some of COM. AU. REGISTER’s Internet site representations were likely to mislead businesses and organisations. For example, the Internet site contained a representation that COM. AU. REGISTER was able to provide services that allow companies, businesses and organisations to ensure compliance with applicable taxation and statutory authorities whereas the ACCC alleged that COM. AU. REGISTER could not provide this service.

Mr Wayt has consented to court orders in which the Federal Court made declarations that Mr Wayt had breached sections 52 and 53(aa), 53(bb), 53(c), 53(d) and 53(f) of the Act.

Court orders require Mr Wayt to send corrective facsimiles and display a corrective notice on the COM. AU. REGISTER Internet site. Mr Wayt is also required to implement a trade practices compliance program and will contribute to the ACCC’s legal costs.

The court also accepted an undertaking from Mr Wayt that he will refrain from making representations in the conduct of the COM. AU. REGISTER business that state or imply that:

• the business offers the service of Internet domain name registration if it does not
• persons, companies, businesses and/or organisations are required to obtain the services offered by the business in order to maintain their Internet domain name if they do not
• the business has an affiliation with the bodies responsible for the registration of Internet domain names if it does not
• the business has had prior dealings with persons, companies, businesses or organisations if there have been no prior dealings
• the business is able to provide services which allow persons, businesses, companies and/or organisations to ensure compliance with applicable taxation and other statutory authorities when it does not
• making a payment to the business will result in the provision of services if those services would be provided regardless of the payment.

A breach of that undertaking would put Mr Wayt at risk of proceedings for contempt of court.

"The outcome is a significant result for small businesses who are entitled to have confidence in domain licence registration and renewal services in the development of their e-commerce", ACCC Chairman, Professor Allan Fels, said today. "Suppliers of domain name renewal services and businesses who imply that they are able to supply this service are warned not to mislead customers as to their need to renew their domain name licence with a particular supplier or the services the supplier provides, as such conduct puts the supplier at risk of breaching the fair trading provisions of the Act.

"Additionally, this outcome sends a strong warning to businesses which send false invoices to potential customers implying that an amount of money is due when that business has had no previous dealings with the customer. These businesses are placing themselves at risk of being the subject of an ACCC investigation and possible litigation".

Whilst Mr Wayt has previously provided refunds to businesses who paid money to COM.AU.REGISTER, any business who believes they were mislead and have not received a refund should contact the ACCC on 1300 302 502.