The Federal Court has ordered that Actrol Parts Pty Ltd (Actrol), a supplier of refrigerant gas, pay a penalty of $520,000 for making false or misleading representations in proceedings brought by the Australian Competition and Consumer Commission.
The Court found Actrol had made false or misleading representations in a letter sent to approximately 8000 of its customers and posted on its website concerning the reasons for Actrol implementing significant increases in the price of certain hydrofluorocarbon (HFC) refrigerants (R134a, R410A, R404A, R407C and R507) which took effect from 1 July 2012.
In its letter to customers, Actrol represented that the price increases were due to the introduction of the carbon tax scheme and changes in input costs and general market conditions. In fact, Actrol increased its prices to increase its margins and earnings on these HFC refrigerants and to take into account changes in its costs of supplying those HFCs.
“The proceedings arose from the ACCC’s role in investigating false or misleading claims about the impact of the introduction of the carbon tax scheme,” ACCC Chairman Rod Sims said.
“The letter misled Actrol’s customers about the impact of the introduction of the carbon tax scheme on the price of HFC refrigerant gas, which is used widely in domestic and commercial refrigeration and air conditioning applications throughout Australia. Actrol’s price increases for HFC refrigerant gas were not introduced to cover the cost of the Carbon Tax, but instead were made to increase its margins and to take into account increased supply costs on these products.”
The Court also ordered Actrol to:
- send a letter to each of the addressees of the 20 June letter advising them of the outcome of the proceedings, publish the letter on its website at www.actrol.com.au, and publish a corrective notice in The Australian newspaper;
- implement a competition and consumer compliance program;
- refrain from engaging in similar conduct for a period of 3 years; and
- contribute $50,000 towards the ACCC’s costs of the proceedings.
Actrol agreed to joint submissions with the ACCC on penalty and a statement of agreed facts filed with the Court, and consented to the other orders made by the Court.
Background
Upon the introduction of the carbon tax in 2012, the ACCC was directed to make it a priority to investigate businesses that engaged in misleading conduct concerning the effect of the carbon tax.
Under the repeal of the carbon tax in 2014, the ACCC was given a role to monitor prices of relevant goods and to take action against businesses engaging in price exploitation relating to those goods. Refrigerant gases are regulated goods and are a focus of the ACCC’s monitoring activities.