The ACCC has granted interim authorisation allowing retailers to collectively bargain with landlords about rent relief during the COVID-19 pandemic.

The interim authorisation, granted to the Australian Retailers Association and its current and future members, will also allow retailers to share information relevant to the negotiations including in relation to requests by landlords for certain information as part of considering and negotiating support to be provided in the context of COVID-19.

“We see a clear public benefit in allowing retailers to work together in the negotiations with landlords as it will help those tenants who are experiencing financial hardship during this pandemic to reach a fair outcome,” ACCC Chair Rod Sims said.

“We need to maintain strong competition in the retail sector and supporting these businesses will help with economic recovery once the pandemic subsides.”

The authorisation is voluntary and temporary, and does not include individual tenants exchanging information about the amount of their rent or any rent incentives they were previously granted. 

It is planned that the proposed co-operation will have regard to the proposed mandatory Code of Conduct which sets out the good faith leasing principles applicable between landlords and small and medium shopping centre tenants.

“As with all of the temporary arrangements that industries are looking to implement as a means to deal with the COVID-19 issues they are facing, we will keep under consideration when they are no longer necessary,” Mr Sims said.

Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation which is sought for a period of 12 months from the date of authorisation.

More information, including the ACCC’s interim authorisation decision, is available at Australian Retailers Association.

Background

The Australian Retailers Association is Australia’s largest retail industry association and provides advice, education and advocacy for its approximately 7,500 members.

On 3 April 2020 the ACCC granted interim authorisation allowing shopping centres to co-operate to support retail tenants financially impacted by COVID-19.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback raised following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

The Federal Court has ordered that STA Travel Pty Ltd (STA Travel) pay $14 million in penalties for making false or misleading claims when advertising its MultiFLEX Pass product.

STA Travel admitted that, between March 2014 and August 2019, it made misleading representations in MultiFLEX Pass advertising that consumers who bought the airfare add-on could change their flights without paying fees or charges.

“Consumers were misled into purchasing the MultiFLEX Pass on the representation that they would not have to pay anything further for date changes to their flights, when, in fact, STA often charged consumers hundreds of dollars for changing their flights” ACCC Commissioner Sarah Court said.

In many cases, STA Travel’s charges were not reflective of additional fees imposed by the airline. For example, in almost a quarter of cases where a customer was charged extra by STA Travel, the amount was more than double the additional airfare and tax imposed by the airline.

“In 12 per cent of cases, STA Travel charged MultiFLEX Pass customers to make a change to a flight although the airline itself had not charged STA Travel anything at all for the change,” Ms Court said.

“These penalties serve as a timely reminder to all travel businesses that they must not misrepresent the costs applicable when travel services are changed.”

The MultiFLEX Pass cost up to $149 to purchase upfront. Between 2015 and 2019, STA Travel estimates it sold on average approximately 16,000 MultiFLEX Passes per year.

STA Travel admitted liability and made joint submissions with the ACCC to the Federal Court. STA Travel will also contribute to the ACCC’s legal costs.

Notes to Editors

The ACCC initiated proceedings against STA Travel in March 2019 and the proceedings are unrelated to any COVID-19 issues.

Due to the COVID-19 pandemic, the ACCC is assessing the impacts on consumers and working with the travel industry more broadly. Given the circumstances, the ACCC is urging all businesses to treat customers fairly in these exceptional times.

More information on consumer rights during the COVID-19 pandemic can be found here: COVID-19 (coronavirus) information for consumers.

Background:

STA Travel is a national supplier of travel and tourism services. Its advertising targets students and young people and emphasises discounts and flexibility.

STA Travel promoted the MultiFLEX Pass via multiple channels including its website, brochures/flyers, in store posters, a YouTube video and in-store LCD screen displays.

STA Travel sold a range of MultiFLEX Passes to consumers, namely:

• the ONEFlex Pass, costing $49 and allowing one flight date change;
• the ‘3 Change Pass’ or ‘Multiflex Pass’, costing $99 and allowing three flight date changes; and
• the ‘Unlimited’ or ‘Ultimate’ change pass, costing $149 and allowing unlimited flight date changes.

An example of one of STA Travel’s misleading advertisements is below:

7-Eleven and its franchisees have been granted conditional interim authorisation to discuss potential temporary store closures or reduced trading hours in light of reduced customer demand because of COVID-19 restrictions.

7-Eleven owns and operates stores in competition with its franchisees in some areas and therefore discussions and agreements between them risk breaching the competition laws.

“We recognise that 7-Eleven and its franchisees are facing difficult trading conditions due to the COVID-19 pandemic, and believe this co-operation could help the network and individual stores to remain viable,” ACCC Chair Rod Sims said.

“Importantly, franchisees are not required to temporarily close or reduce their store hours if they do not wish to. Our decision to grant interim authorisation does not force franchisees to agree to the terms offered by 7-Eleven.”

Franchisees that agree to close temporarily will receive an ex-gratia payment from 7-Eleven to cover certain unavoidable operational costs. For franchisees that agree to reduce their hours, the minimum guaranteed income that the franchisee receives from 7-Eleven would be pro-rata adjusted to reflect the temporary reduction in trading hours.

“Franchisees are strongly encouraged to seek independent legal and financial advice when considering whether to adopt these temporary measures,” Mr Sims said.

Interim authorisation is subject to a condition that requires 7-Eleven to notify the ACCC of arrangements reached with franchisees to provide some ACCC oversight.

“We are going to closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked,” Mr Sims said.

Having granted interim authorisation for the arrangements, the ACCC will seek feedback on 7-Eleven’s application for authorisation. 

Details on how to make a submission and more information, including the ACCC’s interim authorisation decision, is available at 7-Eleven Stores Pty Limited.

Background

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

The Franchising Code of Conduct will continue to apply to franchisees that operate non-fuel stores and the Oil Code will continue to apply to franchisees that operate fuel stores. Both codes contain a dispute resolution process.

Dispute resolution services are provided by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO). More about resolving franchising disputes and oil code dispute resolution is available on the ACCC website.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

Bob Jane Corporation Pty Ltd (Bob Jane) has given the ACCC a court-enforceable undertaking to comply with its obligations under the Franchising Code of Conduct in relation to renewal and extension of franchising agreements.

The ACCC was concerned that Bob Jane failed to comply with its obligations under the Code relating to end of term and renewal of agreements. In particular, Bob Jane failed to notify some franchisees whether it intended to renew or extend their franchise agreements at least six months before the expiry of their agreements.

The ACCC was also concerned that it extended the term of certain franchise agreements without first providing required documentation to franchisees and obtaining a written statement that the franchisees had received, read and had an opportunity to understand certain documentation.

“Under the Franchising Code, franchisors must notify franchisees in writing whether they intend to extend or renew the agreement prior to the expiry of the agreement,” ACCC Deputy Chair Mick Keogh said.

“This is an important obligation as it allows franchisees to make informed decisions about the future direction of their business.”

“Franchisors must ensure they comply with their obligations under the Code. We took this action because we were concerned that Bob Jane failed to meet a number of its obligations,” Mr Keogh said.

Bob Jane has acknowledged that its conduct was likely to have contravened the Franchising Code of Conduct and section 51ACB of the Competition and Consumer Act 2010. 

As part of the undertaking, Bob Jane has agreed not to terminate any franchise agreements operating under interim arrangements without providing six months’ written notice.

As required by the Code, it will also obtain written notice from franchisees that they have received, read and had a reasonable opportunity to understand disclosure documents and the Code before entering into, renewing, transferring or extending the term or scope of franchise agreements.

Bob Jane has also undertaken to implement and maintain a compliance program for three years.

“Ensuring small businesses receive the protections of competition and consumer laws, with a focus on the Franchising Code, is a current compliance and enforcement priority for the ACCC,” Mr Keogh said. 

“Franchisors often have a stronger bargaining position in their dealings with franchisees, and we will continue to investigate and take action against franchisors where we believe there has been a potential breach of the Code.”

A copy of the undertaking can be found at Bob Jane Corporation Pty Ltd.

Background

Bob Jane, trading as Bob Jane T-Marts, operates a national network of franchised and company-owned tyre retail stores supplying tyres for a wide range of vehicles, and tyre and car maintenance-related services.

The Franchising Code of Conduct is a mandatory industry code across Australia that regulates the conduct of franchising participants towards each other. The ACCC regulates the Code and investigates alleged breaches.

In 2019, a Franchising Taskforce was established to provide advice to the Government to inform the Government’s response to the recommendations made to the Parliamentary Joint Committee Inquiry into franchising. 

On 11 November 2019, the Taskforce released a Consultation Regulation Impact Statement (RIS) for public consultation setting out identified problems with the franchising sector and possible options for government action.

The ACCC’s submission outlines the ACCC’s view that serious consideration should be given to a different regulatory model to address the fundamental concerns that persist in the franchising sector, rather than the incremental changes to the Code currently being considered by the Franchising Taskforce.

The ACCC’s submission in response the RIS can be found on the Department of Industry, Science, Energy and Resources website.

More information for the franchising sector can be found on the ACCC’s website.

The ACCC has granted conditional interim authorisation to allow the Australian Energy Council and wholesale and retail energy businesses to co-operate to provide financial relief to residential and business customers who may be financially impacted by the COVID-19 pandemic.

This interim authorisation allows business in the electricity and gas markets to hold discussions, share information, and enter into arrangements for the purpose of providing financial relief and other measures to small, medium and large businesses, and to expand support under existing hardship programs for residential customers.

“We know the COVID-19 pandemic is having a significant economic impact on consumers and businesses in Australia, which is why we have granted this interim authorisation,” ACCC Chair Rod Sims said.  

“Energy is an essential service and this is an important opportunity to allow energy market participants to support consumers and businesses through the pandemic.”

Importantly, authorisation is only granted on the condition that any agreements between energy retailers are not materially inconsistent with the relevant applicable principles in the Australian Energy Regulator (AER) Statement of Expectations of energy businesses: Protecting consumers and the market during COVID-19.

The Statement of Expectations sets out ten principles the AER expects businesses to adhere to during the COVID-19 pandemic to ensure the continued safe and reliable supply of energy to homes and businesses. This includes expectations about payment plans and hardship arrangements, no disconnections and deferring referrals to debt collection agencies for recovery actions.

“The AER’s Statement of Expectations provides important principles that should be adopted by energy retailers in their dealings with customers during the COVID19 pandemic, and we expect  any conduct under this authorisation to meet or exceed the expectations set out in these principles” Mr Sims said.

The AEC must also regularly update the ACCC and the AER about the information shared and the decisions made by retailers as part of the authorisation.

The ACCC and AER will also be invited to attend any meeting where the energy retailers discuss or agree on financial relief arrangements. This will provide important transparency and oversight of these discussions.

“We believe that allowing the AEC and energy businesses to work together will enable customer relief to be provided more quickly and efficiently than it would if the parties were to work on these measures independently,” Mr Sims said. 

“We will closely monitor the effect of these arrangements and when it is appropriate for this authorisation to be revoked.”

Having granted interim authorisation for the arrangements, the ACCC will now seek feedback on the application for final authorisation which is sought for a period of 12 months from the date of authorisation.

More information, including the ACCC’s interim authorisation decision, is available on the ACCC public register.

Background

The Australian Energy Council is an industry organisation representing 23 major electricity and downstream natural gas businesses operating in the wholesale and retail energy markets.

Notes to editors

ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.

Section 91 of the Act allows the ACCC to grant interim authorisation when it considers it is appropriate. This allows the parties to engage in the proposed conduct while the ACCC is considering the merits of the substantive application.

The ACCC may review a decision on interim authorisation at any time, including in response to feedback following interim authorisation.

Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.

The ACCC has welcomed the announcement that Flight Centre will stop charging customers hundreds of dollars in cancellation fees in order to get a refund for travel cancelled due to the COVID-19 pandemic.

Flight Centre will refund thousands of customers who, from 13 March, were charged $300 per person to get a refund for a cancelled international flight or $50 for a domestic flight.

This policy will also apply to cancellations fees charged by Aunt Betty, Travel Associates, Student Universe, Universal Traveller and Jetescape Travel (trading as Byojet Travel), which are part of the Flight Centre group.

Flight Centre’s decision follows weeks of pressure from the ACCC for Flight Centre to improve its treatment of customers during COVID-19 travel restrictions.  

The ACCC said its next step would have been court action if Flight Centre did not change its position. This announcement will provide faster relief for consumers than would have been likely to have resulted from any court action. 

The ACCC has received a large number of complaints about Flight Centre’s cancellation fees from consumers via its Infocentre, website, and social media channels.

“This is a very welcome move made by Flight Centre for thousands of customers impacted by COVID-19 travel cancellations,” ACCC Chair Rod Sims said.

“We are continuing to discuss issues in relation to refunds and cancellations with the travel sector, and encourage travel providers to treat consumers fairly in these exceptional circumstances.” 

“While we know some consumers are very concerned about getting a refund or credit for their cancelled travel plans, we do ask people to be mindful of the significant impact that this pandemic has had on the travel industry.” 

The ACCC has received more than 6000 complaints from consumers dissatisfied with travel companies’ refund policies and cancellation fees, with thousands more contacting their local state or territory fair trading agencies seeking assistance resolving individual disputes. 

While a consumer’s right to a refund during this period will depend on the terms and conditions of the contract entered into with travel provider, the ACCC says many businesses are struggling to process the high number of cancellations.

“We ask consumers to remain patient and be mindful of the significant pressures on businesses at this time and, where possible, contact the business by email or website, rather than by phone,” Mr Sims said.

“These are very complex issues and may take smaller businesses more time to respond.”

For more information on consumer rights and obligations of businesses during COVID-19 please visit accc.gov.au

The ACCC and the Office of the Australian Information Commissioner (OAIC) today jointly released the Compliance and Enforcement Policy for the Consumer Data Right.

The Policy outlines the approach that the ACCC and the OAIC have adopted to encourage compliance with, and address breaches of, the Consumer Data Right regulatory framework. The Policy has been developed following consultation with current and future data holders and recipients.

‘‘The Consumer Data Right is an important reform that will give consumers greater access to and control over their data,” ACCC Commissioner Sarah Court said.

“With this important reform come significant and serious safeguards.”

“It is the responsibility of each Consumer Data Right participant to be fully aware of their regulatory obligations or face scrutiny by the ACCC and the OAIC,” Ms Court said.

“Today’s release of the Compliance and Enforcement Policy helps clarify these obligations as people prepare to participate in the Consumer Data Right from July 2020.”

The ACCC and OAIC have adopted a strategic risk-based approach to compliance and enforcement, which focuses on building consumer confidence in the security and integrity of the Consumer Data Right system.

“My office and the ACCC will work in partnership to monitor and actively enforce participants’ compliance with their regulatory obligations, including the privacy safeguards,” Australian Information Commissioner and Privacy Commissioner Angelene Falk said.

“A strong regulatory framework is in place to protect privacy and build public confidence in the Consumer Data Right, and the Compliance and Enforcement Policy released today provides increased certainty about how we will uphold these consumer protections.”

“Economic reforms like the Consumer Data Right which build consumer confidence in the use of their personal information and encourage innovation will be critical to our recovery after the COVID-19 outbreak,” Commissioner Falk said.

The ACCC and OAIC will regularly review the Compliance and Enforcement Policy so that it continues to reflect best practice regulation and evolves with the Consumer Data Right regime.

A copy of the Compliance and Enforcement Policy is available online.

This media release was jointly issued with the Office of the Australian Information Commissioner.

Background

Principles

The ACCC and OAIC will adopt a strategic risk-based approach to compliance and enforcement which recognises the joint regulatory model and a requirement to deal with breaches of the legislation efficiently and effectively. Both agencies will act with integrity, professionalism and in the public interest, guided by the principles of accountability, efficiency, fairness, proportionality and transparency.

Compliance monitoring tools

The ACCC and OAIC will use a wide range of information sources and monitoring tools to assess compliance and identify potential breaches of the Consumer Data Right legislation (including Privacy Safeguards), Consumer Data Right Rules and Data Standards. These sources and tools will include:

• stakeholder intelligence and complaints
• business reporting, which will include summaries of Consumer Data Right complaint data
• audits and assessments
• information requests and compulsory notices.

Enforcement options

There are a range of enforcement options available to respond to and resolve breaches of the Consumer Data Right legislation (including the Privacy Safeguards), Consumer Data Right Rules and Data Standards. These include:

• administrative resolutions, whereby a business provides a voluntary written commitment to address a non-compliance issue
• infringement notices and court-enforceable undertakings
• suspension or revocation of accreditation by the ACCC (as the accreditor)
• determination and declarations, using the OAIC’s power to make a determination following an investigation, to either dismiss or substantiate a breach of a Privacy Safeguard or Rule relating to the privacy or confidentiality of Consumer Data Right data
• court proceedings (which may result in penalties, injunctions and other orders).