Multimedia International Services Pty Ltd - s.87B undertaking

On 30 November 2015, the Australian Competition and Consumer Commission (ACCC) instituted proceedings in the Federal Court against Multimedia International Services Pty Ltd trading as The Community Network (Multimedia) for allegedly engaging in unconscionable conduct, misleading or deceptive conduct, making false or misleading representations and wrongly accepting payments from small businesses.

Multimedia sells digital advertising services to small businesses throughout Australia.  The advertising is presented on branded LCD screens at various sites such as fitness centres, newsagencies and shopping centres.

The ACCC has accepted a court enforceable undertaking from Multimedia to resolve certain aspects of the Federal Court proceedings.  The ACCC had concerns that Multimedia failed to adequately disclose to some of its customers the fine print that qualified the roll-over clause in its standard form contract, and that this had the potential to be misleading or deceptive to potential advertisers.

To address the ACCC’s concerns, Multimedia provided the ACCC with a section 87B undertaking that it will not:

1. for a period of five years, enter into any contract with a potential advertiser for the provision of advertising services by Multimedia which contains a term that it will renew by way of automatic rollover, unless:
   1. Multimedia draws the roll-over clause to the attention of the potential advertiser; and
   2. for contracts entered into after 60 days from the commencement of this undertaking, Multimedia will offer the potential advertiser, at the time of entering into the contract, an option (without additional penalty) not to have the contract renew by way of automatic rollover; and
   3. the contract permits the advertiser to terminate the contract by giving written notice up to 2 months prior to the commencement of the initial renewal period; and
   4. following renewal, the contract permits the advertiser to terminate the contract without penalty by giving written notice up to 2 months prior to the end of the renewal period.
      
2. for a period of five years, enforce a roll-over provision of an advertising contract existing at the commencement of this Undertaking, in circumstances where the advertiser has provided 2-months written notice to Multimedia that it does not wish to continue with the contract at the end of the contractual period (whether that is the initial contract period or a roll-over period).
   
3. for a period of five years, where it has entered or enters into a contract with an advertiser which nominates a particular site at which it is proposed that the advertiser’s advertisement be displayed (the nominated site), change the nominated site prior to the display of the advertiser’s advertisement, unless Multimedia:
   1. has first informed the advertiser in writing of the proposed change of site; and
   2. has provided the advertiser in writing with the option of immediately terminating the contract at no further cost to the advertiser; and
   3. keeps a written record of the advertiser’s response to the matters in the preceding subparagraphs.
      
4. take any further steps, directly or indirectly, to pursue further payments from the small businesses named in the Federal Court proceedings.