ACCC takes the Community Network to Court for Unconscionable Conduct
Tuesday 12 January 2016 @ 10.14 a.m. | Trade & Commerce
The Australian Competition and Consumer Commission (ACCC), late last year, instituted proceedings against Multimedia International Services Pty Ltd (The Community Network). The ACCC alleged that the organisation was engaging in unconscionable conduct, making false and misleading representations, and wrongly accepting payments from small businesses.
Background to the Action
The Community Network is a company that sells digital advertising services to small businesses throughout Australia. The advertising appears in the form of branded LCD screens at various sites throughout the city.
The ACCC argues that the Community Network had breached the Competition and Consumer Act 2010, particularly provisions pertaining to unconscionable conduct, in relation to two small businesses. The ACCC claimed that the company refused to release the small businesses from contracts for advertising services despite the fact that the Community Network was not providing those services. The ACCC also claimed that the Community Network made false and misleading representations under the Australian Consumer Law (contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth)) to the small businesses relating to key contractual terms that were supposedly disclosed on the front of the contract.
False and Misleading Representations
The Community Network falsely misrepresented that the contract was for a two year fixed term when the actual case was that the business had to give 12 month’s cancellation notice by registered post. Furthermore, the company printed on the front of the contract the location in which the advertising would appear, when terms in fine print on the reverse side allowed The Community Network to change the location unilaterally.
The ACCC further alleged that the Community Network had accepted payments from three other businesses when it had reasonable grounds to believe that it would not be able to provide advertising services for those businesses. ACCC Deputy Chair Dr Michael Schaper said:
“In these proceedings we allege that in all the circumstances The Community Network’s conduct was unconscionable in relation to two small businesses, when it did not supply contracted advertising services but continued to enforce payment obligations and would not permit termination of the contract by the small businesses.”
The Community Network has so far not responded to any requests for comment other than to say that they’ve arrived at an amicable proposal regarding one of the concerned small businesses.
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