In Touch: Bingo Industries pleads guilty to criminal cartel offences, Google ordered to pay $60m penalty and other developments

The latest in competition and consumer law 10 min read

A sales strategy put to bed: Revitalife asleep on consumer protections regarding unsolicited sales practices

On 26 July 2022, the ACCC accepted a court-enforceable undertaking from Clews Holding Pty Ltd, trading as Revitalife (Revitalife), after the ACCC raised concerns about the sales practices Revitalife used when selling therapeutic adjustable beds and recliner lift chairs.

Over the period of July 2019 to January 2022, Revitalife made unsolicited calls to consumers offering to conduct a 'Sleep Assessment' survey and arrange a home visit. Revitalife then visited the consumers at home and, during that visit, tried to sell them therapeutic adjustable beds and recliner lift chairs. Revitalife's customers are predominantly elderly Australians.

Revitalife has since admitted it likely breached the Australian Consumer Law by:

• failing to clearly disclose the true purpose of the unsolicited visits and not explaining to consumers that it was obliged to leave the premises immediately if asked to do so; and
• representing to consumers that its product recommendations were based on the results of the sleep assessment it had completed when this was not always the case.

The ACCC raised further concerns that Revitalife made false or misleading representations to some consumers about their rights under the consumer guarantees and their right to a refund after terminating unsolicited consumer agreements within the cooling-off period. Following ACCC engagement, Revitalife identified 49 consumers who may not have received correct refunds and paid a total of $57,646 in refunds to these customers.

Revitalife has undertaken to update its complaints-handling system and to establish and maintain a consumer law compliance program. Revitalife has also ceased in-home sales, amended its policies and practices, and removed some terms from its sales agreements that the ACCC considered to be unfair contract terms.

ACCC interim gas report drills down into outlook for supply

On 1 August 2022, the ACCC released its Interim gas report.  

Most significantly, the ACCC found that there is likely to be a 56 PJ shortfall in the domestic east coast gas market for 2023 and raised concerns about:

… the high level of market concentration, noting that LNG exporters and associates had influence over almost 90 per cent of the proven and probable (2P) reserves in the east coast in 2021 through direct interests, joint ventures and exclusivity arrangements.

This shortfall is equivalent to around 10% of expected domestic demand. At a regional level, the southern states and territories (NSW, Vic, SA, ACT and Tas) are expected to experience a 54 PJ shortfall in 2023, due to declining production in the south and a projected increase in demand from gas-powered generators. In Queensland there is expected to be a shortfall of 2 PJ.

To address the expected shortfall, the ACCC:

• recommended that the Government initiate the Australian Domestic Gas Security Mechanism (ADGSM) process for establishing whether 2023 will be a shortfall year and work with LNG exporters to supply more gas into the domestic market in 2023 over the latter half of 2022, so that the domestic market doesn’t commence the 2023 supply year facing a material shortfall in supply;
• supported the Minister for Resources' announcement that the Government renegotiate the Heads of Agreement (HoA) with LNG exporters and renew the ADGSM, both of which are due to expire on 1 January 2023; and
• welcomed the Minister for Resources' announced review of the ADGSM and recommended that the Government strengthen both the ADGSM and HoA.

The ACCC also flagged that its priorities over the next 12 months will be to:

• continue a review of upstream competition, in particular how producers make decisions about when to bring gas to market and any potential competition concerns given the upstream market is highly concentrated and dominated by three LNG exporters and their associates;
• assist the Government in its review of the ADGSM and renegotiation of the HoA;
• assist in the ADGSM process to determine if 2023 is likely to be a shortfall year, should the Government commence that process;
• monitor and report on compliance with the HoA signed with LNG exporters;
• monitor and report on the implementation of the Gas Code of Conduct; and
• commence an examination of competition in the supply of gas to commercial and industry users.

For more on this, see our Insight: ACCC Gas Inquiry: shortfalls and solutions?

Making radio waves: ACCC accepts Telstra's court-enforcable undertaking

On 3 August 2022, the ACCC accepted a court-enforceable undertaking from Telstra following concerns that its registration of certain radiocommunications sites had the purpose or likely effect of hindering competition in the in the retail mobile market.

In Australia, Telstra, Optus and TPG hold licences to use spectrum bands to provide mobile services. This requires the licence holder to register radiocommunications sites with the Australian Communications and Media Authority (ACMA) in the spectrum band pertaining to their licence. Low band spectrum, like 900 MHz, is typically used by mobile networks to support network coverage and capacity.

Telstra currently holds a licence to use part of the 900 MHz band until 30 June 2024, however it had not registered a radiocommunications site in that band since 2016.

At the end of last year, Optus was granted a licence from the ACMA to use all of the 900 MHz band from 1 July 2024, following expiration of Telstra's partial licence. In light of this, under the ACMA's early access regime, Optus was able to apply for early access to the 900 MHz band, provided doing so would not interfere with any communications sites registered by existing licence holders.

After becoming aware of this, on 31 January 2022, Telstra registered 315 new radiocommunications sites in the 900 MHz band, many of which were in major cities or inner regional areas. Telstra later deregistered 153 of these, however since January, it has only used a small number of the remaining sites.

The ACCC conducted an intensive investigation into Telstra's conduct, raising concerns that such conduct had the purpose or likely effect of hindering Optus' rollout of its 5G network, which relied heavily on access to the 900 MHz band.

The undertaking provided by Telstra requires that it deregister and cease the operation of all remaining radiocommunications sites which it registered in January 2022, and ensure its board and certain senior staff receive competition law training.

Google secures Mandiant and Woolworths proceeds to checkout with MyDeal

On 11 and 12 August 2022, the ACCC announced it would not oppose the following acquisitions as it considered neither is likely to substantially lessen competition:

• Google's acquisition of cybersecurity consultancy provider, Mandiant; and
• Woolworths' acquisition of online marketplace, MyDeal.

Both reviews were conducted under the ACCC's informal merger review process and involved targeted market enquiries.

The ACCC's review of Google's acquisition of Mandiant focused on the markets for cybersecurity and cloud platform products, in which it was found there are various alternative suppliers. Although both Google and Mandiant provide cybersecurity products, the ACCC did not consider them competitors in this regard.

A key consideration was whether the acquisition would provide Google with the incentive and ability to foreclose competitors in cloud platform or cybersecurity services. The ACCC found that this was unlikely.

The review was completed in 34 days.

The ACCC's investigation of Woolworths' acquisition of MyDeal focused on competition in the retail supply of various product categories, the supply of online marketplace services to third-party sellers, and the wholesale supply of various product categories.

Woolworths and MyDeal both retail their own products and operate online marketplaces for third-party retailers, Everyday Market and MyDeal, respectively.

The ACCC found that Everyday Market is not a significant competitor to MyDeal, and that Woolworths was unlikely to be able to leverage its retail position into online marketplace sales in light of significant competition from other marketplace platforms.

The review was completed in 42 days.

Federal Court takes aim at Fujifilm for unfair contract terms

On 12 August 2022, following action taken by the ACCC, the Federal Court declared that 38 contract terms used by Fujifilm Business Innovation Australia or Fujifilm Leasing Australia (together, Fuji) are unfair, void and unenforceable.

The court's orders related to 11 categories of standard form contracts between Fuji and thousands of small businesses. These contracts covered the leasing and servicing of a range of business products (eg printers, scanners and photocopiers), and included a number of unfair terms such as those providing for unilateral price increases, automatic renewal and excessive exit fees. According to the ACCC, Fuji leveraged the power imbalance between it and these small businesses to take steps, including court action, to enforce the now void contract terms.

Fuji ultimately admitted the terms used in its contracts were unfair and consented to the court's orders and declarations. Under these orders, Fuji must cease using the unfair terms for five years, implement a compliance program, contribute to the ACCC's costs and publish information about the orders on its website. Fuji must also contact all current customers that have entered into a relevant contract to ascertain if they are a small business (ie fewer than 20 employees) and make them aware of the orders.

In commenting on the case, the ACCC has reaffirmed its support for proposed changes to the Australian Consumer Law, which will enable the court to impose significant penalties where businesses use and rely on unfair contract terms (rather than simply declaring them void). On 26 July 2022, the Hon Julie Collins, Minister for Small Business and Dr Andrew Leigh, Assistant Minister for Competition, Charities and Treasury issued a joint media release foreshadowing laws to 'ban unfair contract terms', as promised. The media release notes that the Government will introduce legislation in the upcoming sitting period. The parliamentary calendar indicates that both houses will be sitting next on 5 September 2022. To learn more, see our Insight: What to expect from the new Labor Government on competition policy.

Federal Court puts Google off track with $60m penalty

On 12 August 2022, in proceedings brought by the ACCC, the Federal Court ordered Google to pay $60m in penalties for misleading Android mobile users about the collection and use of their location data. The parties had put forward an agreed position on penalty to the court, making joint submissions that it was within the appropriate range.

The penalty decision follows the Federal Court's judgment in favour of the ACCC from April last year. To learn more, see our Insight: Federal Court makes landmark decision on data transparency.

In short, it was found that Google misrepresented to Android mobile users at the time of creating their Google account that the 'Location History' setting was the only setting that determined whether or not Google would collect, store and use their location data. In actual fact, there was an additional 'Web & App Activity' setting which, when turned on (as it was by default), also enabled Google to collect, store and use location data. Google was also found to have misled consumers by failing to inform those who later turned off the 'Location History' setting but not the 'Web & App Activity' setting that their location data would still be collected, stored and used. Such conduct contravened various provisions of the Australian Consumer Law.

This decision constituted the first public enforcement outcome arising out of the ACCC's Digital Platforms Inquiry. In commenting on the outcome, the ACCC highlighted the sensitive nature of personal location data and emphasised the importance of not misleading consumers about how their data is collected and used.

Orders were also made for Google to review its compliance policies, conduct consumer law training for certain staff members and make a contribution to the ACCC's costs.

Bingo Industries skips to guilty plea for criminal cartel offences

On 16 August 2022, Bingo Industries pleaded guilty to criminal cartel offences relating to price fixing of skip bins and certain waste processing services in Sydney. The plea follows charges brought by the Commonwealth Director of Public Prosecutions (CDPP) on the same day, arising out of an investigation conducted by the ACCC.

The charges allege that in mid-2019, Bingo Industries and its competitors, Aussie Skips Bin Services and Aussies Skips Recycling, agreed to fix and increase prices for skip bins and waste processing services for building and demolition waste in Sydney. Bingo Industries' former managing director and CEO has also been charged with criminal cartel offences, however it is not clear whether a plea has been entered.

The matter against Bingo Industries will be heard by the Federal Court.

This case joins six other criminal cartel cases in which a guilty plea has been entered: CDPP v Joyce; CDPP v Alkaloids of Australia; CDPP v Vina Money & Ors; CDPP v WWO; CDPP v K-Line; and CDPP v NYK.