The Australian Competition and Consumer Commission has recently concluded two investigations which will ultimately benefit small business by reinforcing the rights of small businesses in the way it purchases and sells goods and services.

"The first investigation was into allegations that Wormald Security Australia Pty Ltd, now trading as Chubb Security Holdings Australia Pty Ltd, entered into, and maintained contracts for the provision of mobile security services within the Perth metropolitan area which it consistently failed to provide at the contracted level," ACCC Chairman, Professor Allan Fels, said today.

"After ACCC investigations, Chubb has given an court-enforceable undertaking that it would:

  • Maintain sufficient staff levels, including adequate backup resources;
  • Advise all existing Perth metropolitan mobile security service contracted clients of the shared nature of the services, the definition of 'exceptional circumstances', and the possibility that, in those 'exceptional circumstances', the services may not be provided as contracted;
  • Unconditionally offer an amount equivalent to 2.5% of the contracted fee or equivalent additional services as compensation for under performance of the contracted services to relevant Perth metropolitan clients who received mobile security services during the period; and
  • Write to those clients it identifies as significantly under-serviced and offer to refund the full contracted fee as compensation for under performance of the contracted services.

"This undertaking should send a clear message to companies that it should not take for granted the trust that consumers and small business operators place that such services will be delivered as contracted, Professor Fels said.

The second enforceable undertaking followed an ACCC investigation that Wild Gear Pty Ltd was attempting the enforce a resale price maintenance clause in its franchise agreement.

"The ACCC alleged that both the clause and the attempt to enforce it breached section 48 of the Trade Practices Act.

"The franchise agreement in question contained a clause allowing the franchisee to sell Wild Gear Mountain Designs outdoor adventure products for up to 60 days after termination of the franchise agreement on the proviso that those products are sold within 10 per cent of the then current resale price.

"It is illegal to induce a retailer to sell goods at a minimum price. whether it by written agreement or by refusal to supply goods and services", Professor Fels said. "Companies may provide recommend a minimum price, but must do so making it clear that the reseller is able discount below that recommended price.

"Resale price maintenance is viewed very seriously by the ACCC and the courts and can attract a maximum fine of $10 million for companies and $200,000 for individuals."