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 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).