ACCC says Small Businesses just need a level playing field

24 July 2017

The Australian Competition and Consumer Commission has taken action over the last six months to ensure small business have a level playing field, as revealed in the 14th edition of the ACCC’s Small Business in Focus report.

“The ACCC is committed to ensuring small businesses receive the protections of the new business-to-business unfair contract terms law, franchising and other industry codes,” ACCC Deputy Chair Dr Michael Schaper said.

“We spoke to a number of companies including Uber, Fairfax Media, Jetts Fitness, Lendlease Property Management, and Sensis that have altered their terms and conditions in order to address concerns raised by the ACCC.”

“However, despite the number of businesses that have amended their standard form contracts, the ACCC is prepared to take court action in the coming months to ensure compliance with the new law on unfair contract terms,” Dr Schaper said.

The ACCC says it has a number of in-depth investigations underway and will take further enforcement action this year to ensure that small businesses receive the protection of the new business-to-business unfair contract term (B2B UCT) law.

The ACCC is also taking steps to ensure compliance with Industry Codes. Guidance for businesses about new penalties in the Horticulture code has been produced and a number of actions have been launched under the Franchising Code.

“Ensuring businesses meet their obligations has led to the ACCC’s recent Franchising Code enforcement actions against UltraTune Australia and Geowash as well as issuing the first infringement notices under the Franchising Code to Domino’s,” Dr Schaper said.

Key small business actions

  • Around 6,400 small businesses, over 300 franchisees, and more than 200 agricultural traders contacted the ACCC
  • ACCC enforcement action including instituting Federal Court proceedings against UltraTune Australia Pty Ltd and Geowash Pty Ltd for potential breaches of the Franchising Code
  • the ACCC also issued its first two infringement notices under the Franchising Code to Domino’s Pizza Enterprises Pty Ltd for not providing a marketing fund statement and auditor’s report to franchisees on time
  • The ACCC accepted a court enforceable undertaking from Sensis Pty Ltd in relation to its automatic renewal and cancellation processes
  • The continuation of work in the agriculture sector including the dairy inquiry and guidance to business on the new Horticulture Code (How the Horticulture Code helps you and Enforcement of the Horticulture Code of Conduct)
  • Working with businesses to ensure implementation of the new excessive payment surcharging and country of origin labelling laws
  • The recording of two live webinars on country of origin food labelling and levelling the playing field for small business are available on the ACCC’s Youtube channel
  • Publishing a suite of guidance material for small business, including how to  protect against scams. Losses recorded by small businesses totalled more than $500,000 during  the last six months.
  • Continuing our market study into the new car retailing industry.

B2B Unfair contract terms

Both prior to and since the new B2B UCT law came into effect in November 2016, the ACCC has engaged with a number of businesses including Uber, Fairfax Media, Jetts Fitness, Lendlease Property Management and Sensis.

These businesses have now amended their standard form contracts to address ACCC concerns. Some examples of the changes that have been made include:

  • Removing terms that allow a trader broad discretion to terminate a small business contract “without cause”
  • Making automatic contract renewal terms more transparent and including a contractual obligation to remind customers about the pending automatic renewal of their contracts
  • Amending wide-ranging unilateral variation clauses to limit variations to circumstances where it is reasonably necessary to protect the trader’s legitimate interests
  • Amending wide-ranging cost recovery terms so that the trader can only recover costs which are properly and reasonably incurred

Background

Subscriptions to the ACCC’s information networks surpassed 10,000 members this year and the ACCC’s free online education programs have been updated to improve their look and feel and include new modules to reflect changes in the law. You can subscribe to our networks at www.accc.gov.au/ccaeducation  and the online education programs are available at www.ccaeducationprograms.org

The 14th edition of the Small Business in Focus report is now available.

ACCC Small Business Helpline: 1300 302 021

 

Release number: 
MR 118/17
ACCC Infocentre: 

Use this form to make a general enquiry.

Media enquiries: 
Media team - 1300 138 917
Mr Duncan Harrod - (02) 6243 1108 or 0408 995 408