Welcome to “Brief Breakdown,” where we dive into noteworthy legal cases and explore their implications. In today’s edition, we examine a case that put the spotlight on consumer rights in Australia.
Today, we examine Consumer Commission v Booktopia Pty Ltd [2023] FCA 194. The parties involved were Booktopia, a leading online bookseller, and the Australian Competition and Consumer Commission (ACCC). At the core of this decision were Sections 18 and 29 of the Australian Consumer Law (ACL), which prohibit misleading or deceptive conduct and false or misleading representations. In this breakdown, we’ll outline the key findings, and we discuss the court’s decision.
The commencement
The ACCC commenced the proceedings on 10 December 2021, alleging that Booktopia Pty Ltd had engaged in conduct in contravention of sections 18(1) and 29(1)(m) of the Australian Consumer Law (ACL) (Schedule 2 of the Competition and Consumer Act 2010 (Cth)) by making various representations to customers about their rights to refunds and remedies in respect of goods purchased from Booktopia’s online bookstore that did not comply with the consumer guarantee regime.
The legislative provisions
Section 18(1) of the ACL states:
(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
5 Section 29(1)(m) of the ACL states:
(1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
(m) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including a guarantee under Division 1 of Part 3-2).
Decision
Booktopia accepted that certain representations made were false, misleading or deceptive. The Court went on to examine the conduct, in the context of the making of orders by consent.
The court noted that: The principles applicable to determining whether conduct contravenes s 18 of the ACL are well-established. Conduct is misleading or deceptive, or likely to mislead or deceive, if it has a tendency to lead into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 at [39] (French CJ, Crennan, Bell and Keane JJ). Whether conduct in relation to a particular class of consumers is misleading or deceptive is a question of fact to be resolved by a consideration of the whole of the impugned conduct in the circumstances in which it occurred. The principles that apply to what is considered to be misleading in s 18 of the ACL are the same in respect of s 29 of the ACL: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; 317 ALR 73 at [35]-[47] (Allsop CJ).
The court found that Booktopia had contravened the ACL by making misleading representations about notification requirements, returns and refunds, and its obligation to remedy. Key findings included that Booktopia had misled consumers about the requirement to notify the company within two business days of delivery of a damaged, faulty, or incorrect product to have a right to a refund or other remedy, misled consumers about their entitlement to obtain a refund for certain products, and misled certain customers about Booktopia’s obligation to provide a remedy because the customer had failed to contact Booktopia within two business days of delivery.
The overall outcome was that Booktopia was ordered to pay a pecuniary penalty of $6,000,000 to the Commonwealth of Australia, publish a notice on its website for 60 days, establish and maintain a Consumer Law Compliance Program for three years, review its financial position annually and notify the ACCC if repayment of the penalty can be accelerated, and pay the ACCC’s costs of the proceeding, fixed at $75,000.
This decision serves as an important reminder for businesses to have robust processes in place to ensure compliance with the ACL.
