The ACCC Guide to
doing business online
The ACCC has a new webpage: Your rights &
responsibilities as a business online for small
businesses when doing business online.
The ACCC webpage covers four topics:
- Advertising (social media and website content)
- Reviews and testimonials online
- Consumer guarantees
- Terms and Conditions
The ACCC’s message is that the same legal obligations
apply under the Australian Consumer Law to doing business
online as apply to doing business from bricks-and-mortar
‘ACCC’ means the Australian Competition & Consumer
‘Online’ means using social media, a website or other
online platform to advertise and sell goods or services.
The legal obligations apply to ‘consumers’ – who are
persons or businesses if they purchase a good or service
that costs less than $100,000.
This is an outline, with additional case studies and
1. Advertising (social
media and website content)
The ACCC describes it as: False and misleading
advertising apply to online content
The ACCC’s message is that information posted online
about products, services or business must be truthful and
accurate. The information can consist of prices, images
and descriptions, shipping options and delivery times.
False or misleading claims and misleading or deceptive
conduct are breaches of the Australian Consumer Law. Even
conduct likely to mislead or deceive is caught.
The ACCC provides this case study:
‘unlimited’ phone plans were advertised on social
media by two providers of sim-only mobile phone plans, when
in fact the plans had a maximum data allowance. The
advertising was misleading. The ACCC issued two infringement
notices, one to Amaysin to pay $126,000, the other to
Lycamobile to pay $12,600. Amaysin received a larger penalty
because it is a public company.
Here are more case studies:
protection against viruses An activewear retailer,
Lorna Jane, advertised on its website, on Instagram and in
emails to its customers that its “LJ Shield Activewear”
range “eliminated viruses including COVID-19”, when in fact
it had no scientific testing results to demonstrate the
truth of these claims. The ACCC took Lorna Jane to court and
the Court imposed a penalty of $5 million for the false
origin A table grape trader, Grape Co, stated on
its website that ‘Every single one of our grapes is
personally hand-selected from the finest fruit on our
family’s estate in Sunraysia Australia’, when in fact some
of its grapes were grown on other growers’ properties. The
ACCC issued three infringement notices, one for this breach
of the Australian Consumer Law and two for contraventions of
the Horticulture Code of Conduct for failing to provide its
terms of trade to buyers, totalling $34,920.
storewide sales A retailer of electronic goods,
digiDirect, advertised on its website, social media and in
emails to its subscribers “X% off storewide”, when in fact a
number of popular digital cameras, camera lenses and
accessories were excluded from the promotion. The ACCC took
the view that small print - “terms and conditions apply” did
not ‘cure’ the misleading representation and issued three
infringement notices for $39,240.
2. Reviews and testimonials
The ACCC’s message is that online reviews and
testimonials should be independent, reflect a genuinely held
opinion and only be written by those who have actually
experienced the product or service. Reviews must disclose
any personal connection or commercial relationship, and
incentives to write reviews.
If a fake review is posted on a review platform, the
business request its removal immediately. It should not
selectively edit or remove genuine reviews. If a review
platform will not remove a review, respond to it
Posting false or misleading reviews online is a breach of
the Australian Consumer Law.
The ACCC provides this case study:
online tasking platform Service Seeking operates a
website platform where customers obtain quotes for jobs,
such as gardening, building or cleaning services. Businesses
on its platform are allowed to use a template to draft their
own reviews and give themselves their own star ratings of
jobs. 21,000 reviews were created by businesses, 17,000
without customer input. This gave the false impression they
were favourable customer reviews. The ACCC took Service
Seeking to court and the Court imposed a penalty of $600,000
million for misleading conduct.
Another case study is:
accommodation reviews Meriton Accommodation
provided TripAdvisor (an accommodation rating platform) with
email addresses of departing guests to prompt reviews. Under
its ‘Review Express campaign’, TripAdvisor sends a
professional-looking email to guests to encourage reviews.
Meriton ‘gamed’ the system by making sure that the email
addresses of guests likely to write negative reviews were
either corrupted with additional letters or were not
provided. By reducing negative reviews, Meriton created the
misleading impression that its accommodation was of a higher
standard than otherwise may have been the case. The ACCC
took Meriton to court and the Court imposed a penalty of $3
million for misleading conduct.
3. Consumer guarantees
The ACCC describes the responsibilities as:
Responsibilities to your customers continue after they make
a purchase. The responsibilities are found in the consumer
guarantees under the Australian Consumer Law.
Products supplied must be of acceptable quality, that is,
are safe, lasting, free from defects, look acceptable and do
all the things someone would normally expect them to do.
Services supplied must be provided with due care and
skill or technical knowledge, be fit for purpose and be
provided by an agreed date or within a reasonable time.
Businesses must repair, replace or refund if they supply
a product, or provide compensation if they supply services.
The consumer guarantees override any terms and conditions of
a business which restrict a consumer’s rights.
defective caravans A caravan seller, Jayco, told a
customer that under their terms and conditions, they were
only entitled to have their caravan repaired, and not
replaced or the price refunded, despite major defects such
as water leaks when it rained and multiple roof collapses.
The ACCC took Jayco to court and the Court imposed a penalty
of $70,000 for a ‘major failure’ to comply with a consumer
safety standards A retailer of sporting products,
Decathlon, sold basketball rings and backboards, basketball
systems, and the portable swimming pools products without
the safety labelling, consumer warnings or installation and
use instructions required by the Australian mandatory safety
standards. The ACCC took Decathlon to court and the Court
imposed a penalty of $1.5 million for breaching consumer
goods safety standards.
4. Terms and Conditions
Small businesses have rights under the unfair contract
terms provisions of the Australian Consumer Law when they
enter into small business contracts.
A business is a small business if it employs fewer than
20 people at the time the contract is signed (including
casual employees employed on a regular or systematic basis),
and the contract is a small business contract if the upfront
price payable under the contract does not exceed $300,000
(or, if the contract is for more than 12 months, $1
To qualify, the contract must be a standard form contract
for the supply of a financial product or goods or services.
Some examples of unfair contract terms / terms and
- Excessive default fees
- Obligation to pay for defective goods and services
- The supplier has the right to unilaterally vary or
terminate the contract without cause
- Automatic rollover / renewal of the contract
- No right to refund of the deposit if the business
- Excessive penalties for early termination by the
- The supplier’s liability is excluded for any loss to
the business even if the supplier is at fault
- Excessive penalties for loss or damage of equipment
If a contract term is unfair it is void. That is, the
term cannot be enforced.
The ACCC is acting upon complaints from businesses and is
requesting suppliers to remove unfair contract terms and/or
taking them to Court to have the terms declared void.
For example, the ACCC has taken court proceedings against
Fuji Xerox to ask the Court to declare void “Some of the
unilateral variation terms which allow Fuji to modify
contracts by creating new rights and obligations, including
increasing prices, without notifying its customers and
without giving them any corresponding right to negotiate or
reject.” The case is ongoing.