Consumer Protection Laws: Definition, Case Studies, And Importance

Case 1: ACCC v TPG Internet Pty Ltd

Describe about "Consumer Protection Laws".

A section of laws and organization which are formed in order to ascertain the consumer rights along with fair competition, trade and transparency in terms of the transaction process are the main aspects of Consumer Protection law. The laws are formulated in such a manner which ensures any form of unfair treatment to the consumers. Thus, the acts that are legislated and executed in accordance to the above mentioned aspects related to consumer behavior and protection of their interests is Consumer Protection Act. In this regard it could be mentioned that, the national law in order to ascertain protection of the consumers and fair trading is the Australian Consumer Law (ACL). On 1^st January 2011 the ACL was commenced (Consumerlaw. 2016).

In the context of the above discussion, few cases could be mentioned which are related to the concept of Concept Protection Act, in order to explain the idea more vividly and in an in-depth manner. The ACCC V TPG Internet Pty Ltd [2013] HCA 54 (the TPG Case) clearly highlighted the fact that, the nation’s highest court is determined to give proper justice to the consumers whose Consumer Protection Laws gets breached by any large company. In the context of this case, regarding the company’s relation with ‘Unlimited ADSL2+’ service, the court justified a $2 million fine against TPG. Fine of this type is the first of its kind in the court. In the opinion of the ACCC, this kind of decision affirms its effort in preventing violation of consumer laws by the big companies (Hannebery et al., 2016).

The main issue of the case was the question whether under Section 52 of the Trade Practices Act 1974 (Cth) (at present Section 18 of the Australian Consumer Law) the print advertisements that was developed by TCP for the promotion of its Unlimited ADSL2+ service misleading or not. In the advertisement it was mentioned that an offer was provided by the company under which ADSL2+ would be supplied for $29.99 per month. In a comparatively smaller print, below this offer it was notified that the offer came along with the TPG home telephone service due to which the consumers would have to pay additional $30 per month. On the basis of the above issue the ACCC opted for a legal action against the company. The allegation of the ACCC was that the advertisement had scope or was already misleading the consumers regarding the actual cost of the ADSL2+ service. Thus in this case, the consumer right of receiving transparent and non-deceptive information regarding the provided services was at stake, resulting in the breach of consumer laws. On December 2013, the High Court reestablished the Federal Court’s verdict that the advertisement was misleading and reinforced $2 million penalty which was previously reduced by the Full Federal Court on the appeal of the company. The High Court emphasized on the perspective or point of view that was conveyed by the main message in the particular advertisement. The Court during the judgment considered the fact that on the basis of the company’s ad it may resulted in effective formation of belief and impact the trust of the consumers that may lead in attracting the consumers to go into a negotiation with the company rather than its competitors. The High Court further highlighted the fact that a rational consumer might be aware of the fact that ADSL2+ services were combined with telephone services but that cannot result in ignoring the fact that advertisement was of deceptive nature. Some of the main requirements of the provided information to the consumer under the Consumer Right laws are its transparency, clarity, non-ambiguous and non-deceptive nature. In this particular case, the provided information conveyed to the consumers consisted of ambiguous and unclear elements thus breaching the right of information of the consumer, resulting in breach of Consumer Law (SOVERN, 2014).

Case 2: Australian Competition and Consumer Commission v Google Inc

In order to analyze the mentioned case critically and in an effective manner, the opinion of ACCC Chairman Rod Sims as provided for an article in the Australian Financial Review could be highlighted. He opined that, the decision given by the High Court in this particular case was a standard for the companies regarding the consequence that they might have to face in case they breach consumer laws. The verdict given in this case clearly highlights the issue of misrepresentation by the companies. This case brings out the aspect that it is essential on the part of the organizations to be careful regarding particular features of services or goods that they emphasize and convey upon to the consumers should not have any form of misleading or deceptive elements that may affect the consumer. As a result of which the organizations during their promotion or advertisement should be very careful regarding the any form of misleading statement (Mondaq, 2016). The company which has been blamed this case may provide that logic that all the essential and important information were provided in the advertisement. But this cannot result in ignoring the fact that certain portions of the messages were emphasized upon while other parts of the information were not emphasized upon. This can be clearly stated to be a means of misguiding the consumers. As experienced from the above mentioned case that such behavior on the part of any organization can lead to its suing and if the misconduct or breach of the law is proven then the consequence may be penalty of paying a compensation amount or even imprisonment. 

Section 52 of the Trade Practice Act [TPA], deals with misleading or deceptive behavior in terms of trade behavior or practices. In this regard, The Australian Competition and Consumer Commission v Google Inc [2012] FCAFC 49 (3 April 2012) case can be mentioned. In accordance of the paragraphs 2(i) to (iv) of the Notice of Appeal the Court declared that, due to publishing on the Google Australia website’s result page on 29th May 2007, 18th July 2007, 24th October 2007 and 17th April 2008 by Google Inc results that were ads for STA Travel’s business and website which consisted of the heading of “Harvey World Travel” or “Harvey World” was contradicting the fact or truth according to the trade or commerce behavior which are: the advertisement represented the fact that STA Travel and Harvey World Travel business were associated, the mentioned organizations  had an affiliation, at STA Travel’s website Harvey World Travel businesses information could be found and finally the at STA Travel’s website information regarding the service provided by Harvey World Travel businesses could be achieved. As a result of the above mentioned trade behavior, Google Inc was hold liable to be engaged in misleading or deceptive behavior (Accc. 2016).

Similarly, between March 2006 and July 2007, Google Inc by publishing   or caused to publish results on result page of the Google Australia website CarSales advertisement with the website heading as “Honda.com.au” results a breach of consumer law. The reason being, when the consumer would click on the provided headline of “Honda.com.au” they were supposed to visit the Honda Australia website which was not happening. This clearly was a misleading or deceptive act. It was further claimed by ACCC in response to searches of users for a business which was a competitor; Google published “sponsored links” to the websites of Trading Post and Ausdog as well (Farrell, 2010). In this particular case the issue was not the fact if the sponsored links were of misleading or deceptive nature or not. The main aspect on which the High Court was required to take a decision was whether by promoting or displaying sponsored links there was any form of involvement on the part of Google Inc in misleading or deceptive behavior.

The High Court on 6^th February in completely agreement and approved the appeal made by Google. The approval of the appeal was done on the basis of the finding which reflected that Google was not involved in any form of deceptive or misleading behavior. The justification given by the court for this verdict was mainly because the search terms which are selected by the internet users or the material that are available on Google are not controlled by Google. Moreover any advertisement that gets activated in Google page is because of the fact that the Google ad word’s content or Google search main words are specified by the advertisers and Google is not in control of that. Other than that, the advertisements that are published in its page are not created or authored by Google itself and third party is responsible for it. The innocence of Google from any form of misleading is further proven from the fact that the conveyed information in those advertisements was that of the advertisers which Google do not endorse (Sinha, 2011).

Thus from the above findings the innocence of Google was established and the previous decision of the Full Federal court which was in favor of ACCC was nullified the verdict by the High Court.   

There are number of implications of the judgment given by the High Court that primarily impacted the publishers, advertisers and trade mark owners. The main impact upon the publishers was establishment of the fact that websites should be treated at per as any other media of advertisement like newspapers, magazines etc.  It is also significant in this context that, if an advertisement is not created or adopted by a particular media, then it would not be considered liable for the misleading elements of the advertisement. It was further affirmed by the High Court that the advertisers will be considered liable for the deceptive or misleading elements that are present in online advertisement. Moreover, in case any advertiser buys Adwords which consists of another organization’s trade mark and link it to a sponsored link the advertiser will be considered liable for the misleading and deceptive behavior (Hwlebsworth, 2013). As a result, it further increases the importance on the part of the advertisers to review the components of an advertisement in order to assure that it contains no misleading elements. The importance of The Australian Competition and Consumer Commission v Google Inc [2012] FCAFC 49 (3 April 2012) case also lies on the fact that in relation to the particular case on 23th April 2013 Trade Mark Adwords policy was updated with the purpose no more restrictions would be imposed on advertisers by Google in terms of their purchase and use of trademarks like keywords in Google Ads.

In case of any form of breach of rights on the part of trade mark owners they may secure their rights by approaching or lodging a complain to Google regarding any form of unauthorized use of trade mark which will result in restricting its use by Google. Other than that claims could be under the Australian Consumer Law any the advertiser’s unauthorized use of the trade mark.

From the above discussion it is prominent that The Australian Competition and Consumer Commission v Google Inc [2012] FCAFC 49 (3 April 2012) case was a significant one in terms of the consumer laws. In order to analyze the case critically it is essential to discuss the argument of both the sides.

Prior to the verdict was given by the High Court, the Full Federal Court was in support of ACCC. Earlier to the verdict was given by the High Court there were number of arguments posed by ACCC in against of Google Inc. Some of those mentionable arguments are: in the perspective of ACCC Google was involved in the creation of the sponsored link because the technology is utilized by Google itself in order to create and present the sponsored links. Thus, this involvement makes Google more than just a publisher. So, on the basis of Section 52 of TPA ACCC made the argument that Google Inc was engaged in misleading and deceptive act (Hcourt. 2010).

In other to defend these charges, Google Inc presented to the High Court every applicable aspect of the sponsored links, further mentioned that as compared to the fundamental aspects of the technical facilities provided to the advertisers the technical facilities of Google as provided to others were not different and most importantly, the commercial relations between advertisers and other traders were not within the boundary of Google.

In this particular case there were number of elements that could have resulted in the inclusion under the provisions of the Section 75B of the TPA, resulting in proving Google as criminal for commencing misleading and deceptive behavior (Hwlebsworth, 2013). But it was given a clean cheat on the basis of the particular circumstances of this case which includes the level of Google’s involvement in terms of determination of the sponsored link’s contents.

Conclusion

In the conclusion it could be stated that the core purpose of the consumer laws is not to protect the consumers from any kind of misconduct, misleading and deceptive behavior and protect the interest of the consumer. It further ascertains that if any such incidents occur against the consumers they get fair justice and get the get deserved with the help of these laws. 

References

Hwlebsworth, 2013 [online] Google victory over consumer watchdog: Google v ACCC.publications/publications/technology-media-and-communications/item/977-google-victory-over-consumer-watchdog-google-v-accc.html> [Accessed 19 May 2016].

The Australian Consumer Law, 2016 [online] Consumerlaw.gov.au. 

Australian Competition and Consumer Commission, 2013. 

Farrell, C., 2010. Citizen and consumer involvement in UK public services. International Journal of Consumer Studies, 34(5), pp.503-507.

Hannebery, J., Sapountsis, J., Hannebery, J. and Sapountsis, J., 2016. Australian consumer law update: ACCC cases targeting false or misleading representations | Davies Collison Cave Australia. [online] Davies.com.au.

Hcourt.gov.au., 2012.  [online] High Court of Australia: Google Inc v. Australian Competition and Consumer Commission. 

Robertson, I. and Berry, S., 2014. ACCC to pursue companies that breach consumer laws - Consumer Protection - Australia. 

Sinha, R., 2011. Consumer laws. New Delhi: Global India Publications.

SOVERN, J., 2014. Fixing Consumer Protection Laws So Borrowers Understand Their Payment Obligations. J Consum Aff, 48(1), pp.17-33.