ACCC gets tough on consumer law

Published on Thu, 27/10/2011, 12:00:52

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Following action by the Australian Competition and Consumer Commission (ACCC), the federal court has penalised Sontax Australia $40,000 for breaching product safety standard.

The company supplied over 2,000 luggage straps with non-compliant warnings labels.

"Elastic luggage straps can be dangerous if used inappropriately. When stretched beyond capacity these straps have caused serious injuries, including permanent eye damage. Clear warning labels are important for these straps as many consumers will not be aware of these risks," ACCC deputy chair Peter Kell said.

The federal court in Melbourne declared that Sontax had contravened consumer law by supplying the non-compliant luggage straps.

"Product safety is non-negotiable and the ACCC will accept no excuses for poor compliance," Kell said.
In a separate announcement by the ACCC chairman Rod Sims signalled the commission’s intention to actively pursue cases regarding the misuse of market power and unconscionable conduct, which is covered in the Australian Consumer Law.

“The unconscionable conduct provisions are an important part of both the consumer protection and fair trading provisions of the Australian Consumer Law,” Sims said.

“I am interested in exploring their potential application to a broader range of circumstances”

“Although there is no clear definition of unconscionable conduct, conduct that goes beyond robust commercial dealings or shows no regard for what is right and reasonable falls squarely within the responsibility of the ACCC.”

Sims also highlighted misuse of market power for an anti-competitive purpose under section 46 of the Act as an area where the competition regulator intends to clarify the legal situation.

“The ACCC now believes that it is time to resolve the unanswered questions surrounding section 46. Recent amendments to the Act and likely future court actions are providing guidance on how to successfully prosecute companies that misuse their market power,” he said.
 


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