Hockey v Fairfax: Defamation - The Substance Survives But Not the Spin

In the recent case of Hockey v Fairfax Media Publications Pty Limited[2015] FCA 652, handed down on 30 June 2015, Justice White of the Federal Court has found in part for the Federal Treasurer Joe Hockey, in his defamation case against the Fairfax Media. A case directed to a series of articles, twitter posts and advertising signs and placards which appeared across the three Fairfax Media newspaper mastheads (The Sydney Morning Herald, The Age and The Canberra Times) on 5 May 2014. Receiving particular attention, and raising the most reaction, was a page one article published under the headline "Treasurer for Sale" in two of the Fairfax newspapers. As a result of the decision, the Federal Treasurer received an $80,000 payout for two tweets from The Age's Twitter account in May 2014 and a $120,000 payout for similar words on newspaper advertising signs and a placard - in all a total of $200,000 in damages.

Decision a Victory of Sorts

While in some sources, the decision has been seen as a total vindication, such as was sought by the Federal Treasurer, the decision is reported by others as not being a total victory for the Federal Treasurer, with one commentator, Associate Professor David Rolph, a media law expert at the University of Sydney being reported as saying, that the core decision by Justice White was:

". . . unsurprising and orthodox given the principles of defamation law as they are, . . .What was found to be defamatory was the posters outside newsagents and the tweets that were sent to promote the story. But the article[s] itself, with the headlines and the allegations set out, were held not to be defamatory."

Substance Fine - Spin Not So

In effect, the decision seems to target the selling of the article, not the substantive story, which was not found to have defamed. Thus, in respect of defamation being found proven against Fairfax Media, it was found to lie in the material promoting the article on social media and generally, rather than the article and headline itself.

In this way, the decision of Justice White throws up a novel twist to the law and glaringly highlights some of the legal pitfalls that may lie with social media, such as Twitter and Facebook, which rewards quick response and often snappy concise content stripped of context and explanation.

Arising out of the judgment there is, as was pointed out on the PM program, the implication for editors and journalists in general that what is tweeted and what is put in headlines is, as a result of the decision, ". . . substantially more dangerous than the stor[y] itself".

In the decision, Justice White distinguished Charleston v News Group Newspapers Ltd [1995] 2 AC 65, a UK decision in which two television actors were allegedly defamed by a page one article in the News of the World newspaper screaming "Porn Shocker for Neighbours Stars" which also featured doctored images from a computer game. In that case, it was made clear that headlines and photographs should be read in the context of a newspaper article but in the current case, Justice White said that the words "Treasurer for Sale" assumed a different complexion when they were reproduced in isolation on Twitter and on an advertising signs and placard. Referring to cases which make it clear that newspaper posters are in a "special position", because they are published to people who may never read the "very considerable qualifications" in a newspaper article, at par 160 Justice White states.

". . . It was common ground that the meaning conveyed by the posters is to be assessed on the basis that they were a discrete publication. In World Hosts Pty Ltd v Mirror Newspapers Ltd [1976] 1 NSWLR 712 at 725, Glass JA said that 'posters stand in a special position, for the obvious reason that they are published to many persons who do not read the newspaper itself'. Glass JA referred in this respect to the finding of the New South Wales Court of Appeal in West v Mirror Newspapers Ltd (unreported, 14 May 1973) that 'a plaintiff may declare upon words published in a poster, and disregard the very considerable qualifications placed upon those words by what appears in the newspaper, . . . "

In the current case, Justice White indicated the poster was read in the context of the "heightened consciousness of issues of corruption in New South Wales at the time" around ICAC investigations into other political figures and would have for those who read no further conveyed a different meaning than for those who read the full article. At paras [168] and [169] he says as follows:

"168 In the circumstance of the heightened consciousness of issues of corruption in New South Wales at the time, to which I referred earlier, some ordinary reasonable readers are likely to have understood that the poster was indicating that the SMH contained an article concerning corrupt conduct by Mr Hockey. The words “for sale” implied that that conduct involved the receipt by him of payment of an improper kind, or a willingness on Mr Hockey’s part to receive such payments. In context, the ordinary reasonable reader would have understood there to be an assertion that Mr Hockey was taking, or willing to take, payments which were influencing his decisions as Treasurer of the Commonwealth. That is to say, ordinary reasonable readers would have understood the poster, considered by itself, to be conveying imputations (c) and (d).

169 Those readers who later read the SMH article would, for the reasons given earlier, have appreciated that that was not what the SMH was in fact conveying. However, those who did not read the SMH article would not have had their initial understanding removed in this way."

Is Our Defamation Law in Need of a US style “public figure” doctrine?

Again, this case raises questions as to whether a public figure like the Federal Treasurer should be able to be criticised more widely by the media and public alike, than an average citizen, and that recourse to laws like defamation should not be as readily available for public figures and politicians in an open and democratic society where government in particular is meant to be accountable. As The Conversation states:

"The Australian people deserve a more robust debate. It is worth considering whether we should follow the US 'public figure' doctrine, which makes it harder for politicians to be successful in a defamation claim."

An interesting add-on to this is that in times when technology and Google are here, the decision and all that surrounds it will linger-longer, for as is pointed out by The Conversation:

"The irony in all of this is the attention it has brought on the issue, and on Hockey. The public might have long forgotten Fairfax Media’s headline, but with this decision, the wound is re-opened. Google 'Treasurer For Sale', and see what happens."

The Take Away

The decision is an interesting decision that makes the general public more  cautious about how they personally will use Twitter in future - maybe just for LOL Cat stories? Can cats sue? 

Sources:

Hockey v Fairfax Media Publications Pty Limited [2015] FCA 652 (30 June 2015)

Joe Hockey's defamation win highlights the legal pitfalls of social media (SMH - 1 July 2015)

Hockey’s defamation win is dark news for democracy and free speech (The Conversation - 1 July 2015)

Joe Hockey awarded damages in defamation case against Fairfax Media (ABC PM Program Transcript - 30 June 2015)

New Anti-Copyright Piracy Laws Commence in Australia

The Copyright Amendment (Online Infringement) Bill and the new measures it introduces to address illegal downloading of copyright material became an Act last month on 26 June 2015 and commenced operation as the Copyright Amendment (Online Infringement) Act 2015 (No. 80 of 2015) (the Act) on 26 June 2015.

The purpose of the new legislation in broad terms is stated as being to ". . . introduce a key reform to reduce online copyright infringement". The scheme introduced by the legislation is said by the government to be ". . . deliberately prescriptive" and ". . . intended as a precise response to a specific concern raised by copyright owners". The Act is designed to prevent Australians accessing the many overseas websites, like The Pirate Bay to download, in particular, movies and television programs, without paying.

The General Consensus

Most of the technology experts take the view that online piracy will become more difficult for many Australians but that the new law will not actually stop people who insist on downloading illegal content from overseas websites. The reasoning behind this is that methods for side-stepping ISP filters are numerous and details for how to use these methods are well known and widely published online. Effectively, those who are currently downloading movies and music without paying, may need to change their ways now that these new copyright rules have become law - but rather than ceasing what they do, they may just find new ways of doing it undetected.

The Key Elements and Some Questions Left Unanswered

The new law that commenced on 27 June 2015 means that the holders of intellectual property rights, for example, Hollywood movie studios, will be able to to initiate actions in the Federal Court of Australia to force Carriage Service Providers (commonly known as Internet Service Providers, or ISPs) to take reasonable steps to block access to an overseas website. For this to happen, it must be proven that infringing copyright is the offending website's primary purpose. The amendments to the Copyright Act 1968(Cth) made by the Act do not deal with whether the ISP will need to block IP addresses, which identify web servers, or web addresses. On this, the Act's explanatory material provides that the Federal Court may order the parties to establish a landing page to inform users of the reasons why the website is blocked. The Act's explanatory material also indicates that Virtual Private Networks (VPNs) will not be the target of the Act, but no explicit protections for VPNs are contained in the Act.

What Changes?

The view generally appears to be that while the legislation has generated much interest nothing will change for the average user (down loader/file sharer) until a copyright holder is successful in the Federal Court by getting an order for an ISP to block a website. At that point, an ISP would be required to take "reasonable steps" to block the website from its customers' access - a process which has also some questions as to its effectiveness. As an article by SBS News reports:

"Methods of side-stepping ISP filtering can be easily found using a search engine. . . . In the UK, BitTorrent website The Pirate Bay has been blocked since 2012 but research suggests pirates have turned to smaller pirate websites that have not been blocked. . . The same research says when several pirate websites are blocked, the difficulty of accessing pirated content increases."

Another issue is the cost of the changes made by the Act as it is not yet clear whether an ISP and their customers will pay the costs for blocking a website. In this respect it should be noted that the Act's explanatory material does indicate that when a site is to be blocked then the Federal Court has the power to decide if rights holders or the ISP must pay for the costs of implementing an order.

Some Comments

SSB News reports the view of major film and DVD distribution and cinema company, Village Roadshow, as supporting the new law, saying continued piracy had the potential to shut down Australia’s film and television drama industry. In its submissions to a senate inquiry Village commented that:

"Pirate websites were run by criminals, who received advertising money while facilitating theft, . . ."

Vanessa Hutley from Music Rights Australia is reported as telling SBS Newsthat ". . . it was an important step for rights holders".

Consumer advocate magazine Choice is reported as saying that ". . . ISP filtering was ineffective, but provided some insight into why Australians pirate content". Namely, prohibitive prices and the availability of content were the main reasons, and that but for that ". . . many would exhaust legal options for accessing content before resorting to piracy".

Sources:

Copyright Amendment (Online Infringement) Act 2015 (No. 80 of 2015), the Bill and Explanitory material.

How will Australia's anti-piracy law affect you? (SBS News - 24 June 2015)

Government Introduces Citizenship Amendment (Allegiance to Australia) Bill

On Wednesday (24 June 2015), the Australian government finally introduced the much debated and speculated upon proposed changes to Australian citizenship legislation. The changes proposed in the Australian Citizenship Amendment (Allegiance to Australia) Bill 2015 (the Allegiance Bill) will primarily give authorities the power to revoke the Australian citizenship of people who hold dual citizenship convicted of terrorism offences.

Key Changes Proposed by the Allegiance Bill

The Allegiance Bill proposes three mechanisms that will lead to automatic loss of citizenship:

1. There is a new provision where a person renounces their citizenship if they act inconsistently with their allegiance to Australia by engaging in certain terrorist conduct;
2. There is an extension to the current loss of citizenship provision for a person fighting in the armed forces of the country at war with Australia. Under the extension a person ceases to be an Australian Citizen if they fight for, or are in the service of, a specified terrorist organisation overseas; and
3. A new loss of citizenship provision if the person has been convicted of a specified terrorism offence by an Australian court.

The above three key changes, it should be noted, are all automatic, requiring no ministerial or executive action to apply; and, as per the Minister for Immigration and Border Security's second reading speech, are all proposed under the caveat that:

"In accordance with Australia's international law obligations, no-one will lose citizenship under any of these provisions unless they are a national of another country".

This meaning the law, once enacted, can only be applied to those already having or entitled to dual citizenship.

Policy Behind the Changes Proposed

In introducing the Allegiance Bill into Parliament, the Minister stated that it was the implementation of the Australian government's promise ". . . to address the challenges posed by dual citizens who betray Australia by participating in serious terrorism related activities".

In his speech, the Minister focused on the view that the proposed legislation emphasised ". . . the central importance of allegiance to Australia in the concept of citizenship". The Minister saying also that because the world had changed ". . . so our laws should change accordingly". The Minister then announced a purpose clause to be inserted into the Allegiance Bill stating that:

". . . by these amendments, the parliament recognises that Australian citizenship is a common bond, involving reciprocal rights and obligations, and that citizens may, through certain conduct incompatible with the safety and shared values of the Australian community, demonstrate that they have severed that bond and renounced their allegiance to Australia".

The purpose clause which uses concepts from the current Citizenship Actpreamble is effectively a reworked definition of "Australian citizenship" as it is seen by the government, with the government stating its intent, to be implemented by the changes in the Allegiance Bill, is the protection of the community and the upholding of the communities' values, rather than punishing people for terrorist or hostile acts.

More interestingly with respect to the focus on the term "allegiance" is the view expressed by the Minister that:

"The concept of allegiance is central to the constitutional term 'alien' and to this bill's reliance upon the aliens power in the Constitution. The High Court has found that an alien is a person who does not owe allegiance to Australia. By acting in a manner contrary to their allegiance, the person has chosen to step outside of the formal Australian community."

This seems to be foreshadowing how the government might respond to any challenge to the legislation in the courts, particularly in the High Court.

Further, because the proposed changes are delivered in sections of the Citizenship Act which are "automatic" or "self-executing", that is, rather than requiring a decision by the Minister, the sections operate once a situation exists or criteria are met - they are seen as avoiding opposition from some of the government's senior ministers and legal experts who argued issues and challenges would arise legally and constitutionally with respect to the separation of powers.

Comment and Reaction

The ABC reports Constitutional lawyer, Professor Greg Craven as saying:

". . . a person's citizenship could lapse or self-cancel if they fell under a certain category.

There's no action by a minister, there's no action by the executive Government of the Commonwealth, and that's important because it means that you're not having an executive officer exercising judicial power,

If your citizenship did lapse in that way, and you presented yourself in Australia, you would be perfectly free to say, 'No, that's not the case, I didn't do it, I wasn't there, I wasn't a member of that body', and ultimately that would have to be determined by a court."

In this way, Professor Craven, is reported as saying the matter is open for a court appeal and would counter concern the process could be abused:

"It's a fundamental distinction, because in Australian law only judicial officers can exercise judicial power, . . "

A contrary view and one that points to evidence issues, is that of Greg Barns from the Australian Lawyers Alliance whose criticism as reported by The ABC is:

"On who's evidence are we going to rely? It's unlikely to work, it's certainly unfair, and it's unnecessary. . . There's no doubt there are still constitutional problems with this bill, and that's one of them. . . . It is not the executive in our system of governance to assume the role of the judiciary, and that's what it looks like."

The Federal opposition is reported as saying it will support updating the citizenship act to automatically strip citizenship from Australian terrorists with dual citizenship as long as it doesn't render people stateless. The Federal opposition is not so supportive of the idea of the law applying retrospectively, a possibility floated by the Prime Minister, the view of the opposition being it should be examined by the Parliamentary Joint Committee on Intelligence and Security:

"It's not an idea that we would normally support ... but we'll look at what the proposal actually contains today and the appropriate place for that to now go is the committee and we'll work through that issue on the committee. . . It is a question that needs to be examined carefully by the committee." 

The Bill is expected to pass the House of Representatives and the Senate where the opposition is expected to support it.

References

Australian Citizenship Amendment (Allegiance to Australia) Bill 2015 and 2nd Reading Speech

Terror citizenship laws: Lawyers divided on merits of bill to strip dual nationals of citizenship (ABC News - 24 June 2015)

Proposed terror laws open to challenge, says legal expert (The Australian - 23 June 2014)Jnr

Metadata will Increase Internet Costs

Even with massive amounts being spent by the government to assist telecommunications companies with the costs of retaining metadata - a measure the government sees as a vital part of its efforts to strengthen intelligence capabilities and counter extremist messaging - it seems inevitable that internet costs will increase as a result of the implementation of metadata retention. Increased cost not only from the extra effort and expense that will be required to retain data for the two year period but also from what is likely to be an increasing range of legal cases arising out of privacy based issues and access to information litigation.

Budget Allocation for Metadata Not Enough

In its recent Budget the federal government announced that a further $131 million had been set aside for the purpose of assisting telecommunications companies with implementation of metadata retention. The Prime Minister is quoted as saying:

"The $131 million would assist the telecommunications industry to upgrade its systems to implement this policy, . . . The package will include $22 million to combat terrorist propaganda and counter violent extremism".

However, the amount provided for in the Budget of $131 million seems to be at odds with the $400 million being quoted by the government before the Budget as being required to implement the scheme. As the Financial Review points out:

"But the compensation might not be enough to appease business, given Mr Abbott said before the budget that the tougher new laws, which require telcos to hold on to metadata for much longer than they do now, would cost $400 million to implement".

As website Cyber Shack points out the money allocated to telecommunications companies is even at odds with PWCs' determination (which it prepared for the Attorney-General’s department). They determined that the upfront capital cost of the scheme to the telecommunications industry was as an estimate between $188.8 million and $319.1 million. Amounts far greater than the $131 million allocated for the metadata retention scheme in the Budget. Thus as Cyber Shack says:

"As a result, telecommunication industry bodies have raised concerns that the difference will be added to subscribers' monthly bills."

Criticism of the government's original estimates of cost has been that they were not based on widespread industry consultation. Cyber Shack quotes Laurie Patton, CEO of the Internet Society of Australia, as follows:

"The Internet Society is concerned that the costs have been significantly underestimated."

Further, there is a call from bodies like the Internet Society for the government to commit to top up significant shortfalls once final costs have been determined, otherwise the ISPs and telecommunications companies will have to ". . . underwrite the difference and this will be passed on to consumers through increased Internet fees."

Litigation Likely to Follow and Add to Cost

In the recent determination of Privacy Commissioner, Timothy Pilgrim in Ben Grubb and Telstra Corporation Limited [2015] AICmr 35 (1 May 2015) Telstra is reported as having said Commissioner Pilgrim's determination may force it ". . . to hand over more data than it is required to store under the mandatory data-retention law".

The basics of the matter are that two years ago, Fairfax journalist Ben Grubb had sought access to his own metadata relating to a mobile service he had with Telstra. The metadata he sought included matters such as which cell tower he was at at any given time, the phone numbers of both incoming and outgoing calls, and all SMS data.

In response Telstra indicated it could provide outbound call details and data usage session records, however, privacy laws precluded it from providing location and inbound call details.

As a result a complaint was made to the Privacy Commission which on 1 May 2015 ordered Telstra provide the data requested, namely; IP addresses, URL information, and cell tower information, but excluding the numbers for incoming calls. Further, Telstra was ordered to provide the data free of charge.

Telstra's reaction to the decision through the company's Chief Risk Officer Kate Hughes is reported by ZDNet as being:

"We already provide access to personal information, but this decision could extend this practice to every single piece of data in our networks, regardless of whether the data reveals the identity or anything else about someone, . . ."

ZDNet reports that Telstra intends take the matter further, something which if it proceeds will be of great interest to those concerned with the cost effects on an internet subscription of data retention laws.

The decision has been described as regulator over-reach by the Communications Alliance, the peak representative body for telecommunications companies.

In a report by ZDNet the Communications Alliance is quoted as follows:

"Applying the declaration that all metadata is personal information would layer additional costs and complexity on telecommunications service providers, without any tangible benefit in terms of protecting privacy, . . . Asserting that every single trace of network data - no matter how obscure, unintelligible, or remote it is, or whether it reveals anything about a person at all - is captured under the Privacy Act is impractical, unnecessary, and will be very costly for industry to manage. This is a stark example of regulatory over-reach."

Another result of the decision could be to force telecommunications companies to have to hand even more data to law enforcement agencies. This is because many elements of the information required by the Privacy Commissioner to be given to Mr Grubb the journalist in question were not provided to law enforcement and national security agencies currently because such data is very difficult to extract. However, if the trend is having to provide this much broader range of data to customers, then as the Communications Alliance indicates ". . . it is likely only a matter of time before [law enforcement] agencies will start asking for it as well."

Increased Cost is Certain

When the data retention laws were before Parliament for public discussion it was revealed that Telstra, for example, would need to draw data from more than a dozen different systems to one central system to comply with the mandatory scheme and that the company has already implemented a scheme where customers can apply to get their own limited amount of metadata for a fee starting at $25. Thus it seems that already data retention is costing consumers of Internet services and is only likely to cost them more, a lot more going forward.

Committee Reports on its IT Pricing Reference

The House of Representatives Standing Committee on Infrastructure and Communications has reported on its reference into IT Pricing. Its report was released on Tuesday (30 July 2013) and amongst other matters, confirmed that in product areas like the hardware and software Australians on average paid 50 to 100 percent more than consumers in the USA and recommended changes to copyright and consumer law to ensure this situation changes in future.

The Committee's Reference
The Committee was required to inquire:

• Whether a difference in prices exist between IT hardware and software products, including computer games and consoles, e-books and music and videos sold in Australia over the internet or in retail outlets as compared to markets in the US, UK and economies in the Asia-Pacific;


• Establish what these differences are;


• Determine why these differences exist;


• Establish what the impacts of these differences might be on Australian businesses, governments and households; and


• Determine what actions might be taken to help address any differences that operate to the disadvantage of Australian consumers.

The Committee's Findings
After a 12 month investigation the Committee found in the evidence presented to it that the inquiry was . . . "left [in] little doubt about the extent and depth of concern about IT pricing in Australia. Consumers are clearly perplexed, frustrated and angered by the experience of paying higher prices for IT products than consumers in comparable countries."

From the evidence received the Committee concluded that in many cases, the price differences for IT products could not be explained by the cost of doing business in Australia. This it found was particularly so when it came to digitally delivered content and the Committee concluded "that many IT products were more expensive in Australia because of regional pricing strategies implemented by major vendors and copyright holders"

In its report the Committe returned 10 recommendations, of particular interest are recommendations four to nine which deal with proposed changes to consumer and copyright law especially the control if not removal of techniques like "geoblocking" designed to lock content and/or software products to a geographical area of use.

Recommendations 
The recommendations are as follows:

With respect to price discrimination and its impact on consumer

1. That the ABS develop a comprehensive program to monitor and report expenditure on IT products, hardware and software, both domestically and overseas, as well as the size and volume of the online retail market.

2. Considering the importance of IT products to education, and in the interests of greater transparency in this area, the Committee recommends that the Australian Government, in consultation with Universities Australia and CAUDIT, conduct a comprehensive study of the future IT needs of and costs faced by Australian Universities, in order to provide clearer financial parameters for negotiations.

3. That the Australian Government consider a whole-of-government accessible IT procurement policy, to be developed by relevant agencies including AGIMO, and in consultation with relevant stakeholder groups including ACCAN.

With respect  Copyright, circumvention, competition, and remedies

4. That the parallel importation restrictions still found in the Copyright Act 1968 (Cth) be lifted, and that the parallel importation defence in the Trade Marks Act 1995 (Cth) be reviewed and broadened to ensure it is effective in allowing the importation of genuine goods.

5. That the Australian Government amend the Copyright Act’s section 10(1) anti-circumvention provisions to clarify and secure consumers’ rights to circumvent technological protection measures that control geographic market segmentation.

6. That the Australian Government investigate options to educate Australian consumers and businesses as to:

• the extent to which they may circumvent geoblocking mechanisms in order to access cheaper legitimate goods;


• the tools and techniques which they may use to do so; and


• the way in which their rights under the Australian Consumer Law (ACL) may be affected should they choose to do so.

7. That the Australian Government, in conjunction with relevant agencies, consider the creation of a ‘right of resale’ in relation to digitally distributed content, and clarification of ‘fair use’ rights for consumers, businesses, and educational institutions, including restrictions on vendors’ ability to ‘lock’ digital content into a particular ecosystem.

8. The repeal of section 51(3) of the Competition and Consumer Act 2010.

9. That the Australian Government consider enacting a ban on geoblocking as an option of last resort, should persistent market failure exist in spite of the changes to the Competition and Consumer Act and the Copyright Act recommended in this report.

10. That the Australian Government investigate the feasibility of amending the Competition and Consumer Act so that contracts or terms of service which seek to enforce geoblocking are considered void.

Sources:

• House of Representatives Standing Committee on Infrastructure and Communications inquire into IT Pricing


• Calls to cull internet geoblocks ‘naive’: Foxtel (Finacial Review)


• Australians pay 50 per cent more for tech goods, says IT pricing inquiry (The Australian)

Headlines the made the Tabloids Famous - Part 1

Having been sent a collection of quite amusing ill considered tabloid newspaper headlines its time to continue sharing them. Here are the first few.

Watch his space for more!

Daily Deal Website Scoopon Subject of ACCC Action

By media realease posted to its website on Friday 5 July 2013 the Australian Competition and Consumer Commission (the ACCC) advised that it had issued proceedings against the Daily Deals Website "Scoopon" in the Federal Court. In its meadia relaes the ACCC states that it "alleges that Scoopon engaged in misleading and deceptive conduct and made false and misleading representations to businesses and consumers".

What is Scoopon?

Australia has taken to online shopping in a big way and as the ABC News reported on 5 JUly 2013, Australians spent "more than $24 billion online in the 12 months to March" this year.

In this growth group buying sites have rapidly grown in popularity, offering shoppers everything from cut price holidays to discount clothing and cheap meals. Scoopon is one of those sites an is known as one of Australia’s largest online group buying sites. These sites are also referred to in online parlance as a "daily deals" or "deal of the day" site.

Scoopon sells vouchers for heavily discounted goods or services. Typically online group buying sites, like Scoopon, negotiate these deals with businesses and market the deals to their members and the public through various means the primary ones being online and through social media.

Reason for Action

The ACCC (along with other Australian Consumer Law (the ACL) regulators) is claimning to have received a significant number of complaints since the group buying industry emerged in Australia in 2010.

The ACCC Chairman Rod Sims is quoted in the release as saying:

“The ACCC has worked closely with other ACL regulators to address issues and improve practices in the sector to reduce consumer and business detriment,”

What the ACCC Alleges?

The ACCC's media release says that the ACCC alleges that Scoopon misled consumers regarding their ability to redeem vouchers, their refund rights, and the price of goods advertised in relation to some of its deals. Further, the ACCC also alleges that Scoopon represented to businesses that there was no cost or risk involved in running a deal with Scoopon, when a fee was payable to Scoopon. Finally, the ACCC alleges that Scoopon misled businesses by claiming that between 20 percent and 30 percent of vouchers would not be redeemed when there was no reasonable basis for this representation.

In the media release ACCC Chairman Rod Sims says:

“The ACCC has made online competition and consumer issues a compliance and enforcement priority. Ensuring that the digital revolution delivers competition benefits to consumers and small businesses is a focus for the ACCC ... Businesses must have reasonable grounds when making representations to consumers and to other businesses. The ACCC is working to ensure that consumers making purchases online are not misled and that online traders take adequate steps to meet their obligations under the Australian Consumer Law.”

Nature of the Court Proceedings

The matter has been filed in the Federal Court, Brisbane, and is listed for a scheduling conference on 25 July 2013 at 9.30am - the ACCC is seeking declarations, injunctions, community service orders, pecuniary penalties and costs.

Sources:

ACCC takes action against Scoopon alleging it misled both consumers and businesses (ACCC Website)

ACCC targets daily deal website Scoopon (ABC News)