The ACCC has recently issued a guideline for businesses about its use of infringement notices.

Background

The guidelines has been written in light of the ACCC’s experience in issuing infringements since the inception of the Australian Consumer Law (ACL) in 2010.

Infringement notices exist to deal with relatively minor contraventions of the Competition and Consumer Act in a timely and cost effective manner. The ACCC will issue an infringement notice if it believes that there has been:

  • ‡‡ a breach of the unconscionable conduct provisions
  • ‡‡ a breach of the unfair practices provisions
  • ‡‡ a breach of certain unsolicited consumer agreement and lay-by agreement provisions
  • ‡‡ a breach of certain product safety and product information provisions
  • ‡‡ a failure to respond to a substantiation notice
  • ‡‡ a breach of the provisions of false or misleading information to the ACCC in response to a substantiation notice.

Penalty amounts

The guideline states that penalty amounts will vary (based on the contravention/s) but are commonly as follows:

Click here to view table.

When is the ACCC more likely to issue an infringement notice?

The following are circumstances that have been identified as attracting infringement notices as opposed to other action (such as court proceedings):

  • ‡‡ where the ACCC forms the view that the contravening conduct is relatively minor or less serious
  • ‡‡ where there have been isolated or nonsystemic instances of non-compliance
  • where there have been lower levels of consumer harm or detriment
  • ‡‡ where the facts are not in dispute or where the ACCC considers the circumstances giving rise to the allegations are not controversial
  • ‡‡ where infringement notices form part of a broader industry wide conduct.

The ACCC may also issue multiple infringement notices in circumstances it deems appropriate including where there have been multiple contraventions, where the contraventions have occurred over numerous mediums and to deter similar conduct.

What should a business do if it receives an infringement notice?

By way of summary:

  • ‡‡ The ACCC will provide the recipient with the infringement notice and information as to why it was issued.
  • ‡‡ After receiving the infringement notice, a recipient should consider the alleged contravention and gather all of its information regarding the alleged conduct.
  • ‡‡ The infringement notice will stipulate that payment is due within 28 days. A recipient is able to request an extension of time from the ACCC for a further 28 days. This request is to be submitted in writing to the ACCC as soon as possible and is to outline reasons for seeking the extension. It is important to advise the ACCC:
    • whether payment of the infringement notice penalty is intended (or will the recipient be seeking to have the infringement notice withdrawn)
    • whether circumstances do not permit payment within the specified period
    • why an extension will assist compliance.

The ACCC will provide its response regarding a requested extension in writing.

  • If a party believes that the infringement notice should be withdrawn because it does not believe that it engaged in the alleged conduct, it should write to the ACCC seeking a withdrawal of the infringement notice and provide the ACCC with information related to the alleged contravention.
  • ‡‡Any request to withdraw an infringement notice:
    • must be prior to payment due date
    • must be in writing
    • should provide evidence of information that may assist the ACCC in deciding whether or not to withdraw the infringement notice.
  • ‡ The ACCC will make its decision regarding the withdrawal by the due date of payment. If the infringement notice is withdrawn, the ACCC will determine if further action is appropriate.
  • ‡‡ If payment is not made by the recipient when it is due and payable, the ACCC may pursue the matter in court. If this course follows a rejection by the ACCC of a withdrawal request, the material provided by the recipient to the ACCC cannot be used in evidence against the recipient in proceedings.

What happens if a recipient pays or does not pay an infringement notice penalty?

  • ‡ Payment must be made in accordance with the details outlined on the infringement notice.
  • ‡‡Payment does not mean that a recipient has necessarily contravened the Act (this element is similar to an out of court settlement where there are no admissions regarding liability). ‡‡
  • The ACCC can’t commence court proceedings following payment. ‡‡
  • There is no legal obligation for a party issued with an infringement notice to pay it. However, this leaves the matter unresolved and the ACCC is entitled to pursue the matter through the court. This carries risk as court imposed sanctions are likely to be more significant.

ACCC infringement notice register

Every matter, whether litigated or resolved by way of payment of infringement notice or an alternative sanction, is to be made public. The ACCC maintains an online register available on its website listing paid infringements notices which contain the following details:

  • ‡‡ the person who paid the notice
  • ‡‡ the infringement notice number
  • ‡‡ the date paid
  • ‡‡ the section of relevant legislation from ACL.

The ACCC maintains the register for deterrence and educational purposes.

Often the ACCC will issue media releases in respect of significant matters involving infringement issues.