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Australian Consumer Law – ACCC action on Carbon Price claims

Stephens Lawyers & Consultants Legal Update: July 2013

The ACCC continues to target the energy sector for possible false or misleading representations made by businesses that relate price rises with the impact of the carbon price. In the first 100 days since the commencement of the carbon price on 1 July 2012 the ACCC received close to 1,500 complaints and enquires relating to the carbon price.1

The ACCC has already taken action against several businesses in relation to claims made about the impact of the carbon price. The franchisor Brumby’s Bakeries Pty Ltd was required to accept court enforceable undertakings by the ACCC in relation to statements that were contained in its June 2012 newsletter to franchisees. In the newsletter, Brumby’s suggested to its franchisees that they take the opportunity to increase their prices in June/July 2012 and ‘let the carbon tax take the blame’.2  Brumby’s has since acknowledged that the statements may have had the effect of inducing or encouraging Brumby’s franchisees to make representations to customers linking product price increases to the carbon price without a reasonable basis.3

The ACCC was particularly concerned that the statements made by Brumby’s could have amounted to a breach of Australian Consumer Law. Under section 18 of the Australian Consumer Law, which is contained in the Australian Competition and Consumer Act 2010, a person or business must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.4  Under section 29 of the Australian Consumer Law a person or business is prohibited from, in connection with their promotion or supply, making false and misleading representations with respect to the price of goods and services.5

The ACCC also required Polaris Solar Pty Ltd to provide enforceable undertakings. Polaris Solar distributed a leaflet to households in Western Australia and the ACT in which it claimed that the price on carbon would lead to a 20% increase in electricity prices that would rise to a 400% increase by 2019.6  The statistics were said to have been based on an unnamed independent study, however, the ACCC investigation revealed that they were in fact based on unverified claims made in a newspaper advertisement.7  Polaris Solar fully cooperated with the ACCC and provided undertakings to not engage in similar conduct again and for its directors to attend practical training in Australian Consumer Law.8

The ACCC has also investigated claims relating to:

  1. A regional Queensland medical practice increasing charges for facsimile messages that the ACCC viewed to be inappropriately linked to the carbon price;
  2. A New South Wales flying school raising tuition fees due to the carbon  price; and
  3. A West Australian refrigerant gas supplier passing on price increases that in the ACCC’s view may have attributed all the increase to the carbon price, when this was not the case.

For further information contact:

Katarina Klaric | Principal
STEPHENS Lawyers & Consultants | Suite 205, 546 Collins Street, Melbourne VIC 3000 Australia
T + 61 3 8636 9100 | F + 61 3 8636 919//9 | E [email protected]
PO Box 16010 Collins Street West VIC 8007 Australia

www.stephens.com.au
Stephens-Klaric Legal Pty Ltd (ACN 117 672 376) trading as Stephens Lawyers & Consultants

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© Stephens Lawyers & Consultant. March 2013. Authored by Katarina Klaric and Matthew Churkovich.

1. ACCC, www.accc.gov.au/au/media/-release/accc-reports-on-first-100-days-of-carbon proce-representations, accessed on 15 May 2013.
2. ACCC News Release, ‘ACCC accepts under taking from Brumby’s for Carbon price comment-, 16 July 2012.
3. ACCC News Release, ‘ACCC accepts under taking from Brumby’s for Carbon price comment-, 16 July 2012.
4. Section 18 Australian Consumer Law schedule of the Australian Competition and Consumer Act 2010.
5. Section 29(1)(i) Australian Consumer Law schedule of the Australian Competition and Consumer Act 2010.
6. ACCC News Release, ‘ACCC accepts informal undertaking for alleged misleading carbon price claims’, 5 July 2012.
7. ACCC News Release, ‘ACCC accepts informal undertaking for alleged misleading carbon price claims’, 5 July 2012.
8. ACCC News Release, ‘ACCC accepts informal undertaking for alleged misleading carbon price claims’, 5 July 2012.