Penalties Increase For Breaching Australian Consumer Laws

The Australian Government has passed legislation to increase penalties for breaching Australian Consumer Law.

Previously penalties for companies were capped at $1.1. million.

Penalties for companies are now the greater of:

  • • $10 million;
  • • three times the value of the benefit received; or
  • • 10 per cent of annual turnover from the preceding 12 months, in cases where the benefit of the breach cannot be determined.

Penalties for individuals have also increased from $220,000 to $500,000 per breach.

The Australian Competition and Consumer Commission welcomed the legislation's passing, noting that the commission had advocated for more substantial penalties.

"Penalties need to hit the bottom line so they are not simply seen as the cost of doing business. Perhaps more important, penalties need to be high enough to be noticed by boards and senior managers so that compliance with the law is a higher priority," ACCC chairman Rod Sims said.

"Increased penalties will help to deter large companies from breaching consumer laws. This is a profound change that I believe will improve corporate behaviour significantly, and so improve the Australian economy and how it works for consumers."

A number of local and multinational companies have been handed fines this year by the Federal Court for breaching the ACL, through the efforts of the ACCC.

In June, Apple was fined $9 million after its repair policies were found to be in breach of the ACL. The ACCC also chased Netgear and Fitbit for breaches relating to warranties while HP Australia was ordered to repay customers for blocking third-party ink cartridges.

Date: 27/8/2018