The world’s third largest developer of video games has been slapped on the wrist by the Australian competition watchdog for potentially misleading customers about their right to a refund. Electronic Arts, which runs the Origin video game distribution platform, has acknowledged its representations to consumers about refunds may have breached Australian consumer law. From January 2012, EA said in its terms and conditions and through customer support representatives that Australians were not entitled to any refunds for digitally downloaded video games purchased through Origin. As a result of action from the Australian Competition and Consumer Commission, EA has agreed to amend its terms and conditions and will implement a compliance program with risk assessment measures put in place along with staff training. In addition, the company has provided a court enforceable undertaking to the competition watchdog promising not to tell customers it has a ‘no refunds’ policy. ACCC chairman Rod Sims said in a statement businesses selling downloadable goods should not avoid their legal responsibilities. “It is a breach of the Australian Consumer Law for businesses to state that customers are not entitled to refunds under any circumstances,” he said. “Where a product has a major failure, consumers can insist on a refund or replacement at their choice. Representations that this right has or can be excluded, restricted or modified are false or misleading.” Last financial year Electronic Arts earned more than $US3.5 billion in net revenue, up 27% from the previous corresponding period. A spokesperson for EA Games Australia says the company is pleased to have worked cooperatively with the ACCC to resovle its concerns and ensure its players in Australia "have the best possible experience when purchasing and playing EA games". "In addition to rights available to our players under the Australian Consumer Law, we are also proud to offer our global, industry-leading Great Game Guarantee for digital returns within certain timeframes if anyone is not satisfied with a digitally-downloaded game from EA," the spokesperson says. Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The Australian Competition and Consumer Commission has initiated Federal Court proceedings against daily deals site Spreets, which it alleges misled consumers in 2011 and 2012. The crackdown by the competition watchdog comes just six months after online group buying site Scoopon was hit with a $1 million penalty for making false or misleading representations to businesses and consumers. The ACCC released a statement yesterday saying it will allege Spreets made false or misleading representations about the price of certain deals, the ability of consumers to redeem vouchers and the applicability of consumer guarantees under the Australian Consumer Law in relation to the right of consumers to receive refunds during 2011 and 2012. At the time, Spreets operated one of Australia’s largest consumer-facing online group buying sites. The site has since changed its focus and now publishes deals offered by third party group buying sites including Scoopon, Groupon and Living Social. Amanda Millar, director of trade marketing and corporate affairs for Spreets’ parent company Yahoo!7, told SmartCompany this morning Yahoo!7 “has been in discussions with the ACCC about these matters for some time” and has “already, of our own accord, made substantive changes to the Spreets business model”. Millar says the changes were in part “to ensure that the Spreets businesses practices protected our users against breaches to consumer law”. “Beyond this, it is not appropriate for us to comment any further on matters that are before the courts,” says Millar. The ACCC said it has received “a significant number of complaints” about online group buying sites in Australia since the industry emerged in 2010 and regulators have been working to improve the practices of the industry. “Businesses selling to consumers online have the same obligations under the Australian Consumer Law as all other businesses, and consumer guarantees, including refund rights, apply when consumers purchase online,” said ACCC chairman Rod Sims in the statement. “Online businesses must ensure that they do not mislead consumers and that the price and any restrictions on a deal being offered are clearly and accurately stated,” he said. Sally Scott, partner at Hall & Wilcox, told SmartCompany the maximum penalty for misleading conduct by a company is $1.1 million per offence. While Scott says she has not seen documents relating to this particular case, if the ACCC is alleging three offences from Spreets, the maximum penalty could reach as high as $3.3 million. Scott says it is essential for businesses to ensure any representations they make are not misleading. “[Businesses] need to check all communications and representations such as those in advertising, communications with suppliers, warranty terms, statements made in a shop and statements on a website,” says Scott. “Businesses need to think out of the box as to where they might make representations.” Scott says companies also need to be aware of their obligations towards other businesses, including suppliers. “The Scoopon and Spreets cases show that businesses can be targeted for misleading representations made to consumers and to other businesses, including suppliers,” says Scott. “Whilst many businesses are now more aware of the risk of making misleading representations to consumers, there is less awareness of the risk of making misleading representations to other businesses.” “The ACCC has proved over the last four years or so that it is willing to pursue businesses that engage in misleading conduct,” says Scott. A directions hearing for the case is scheduled for July 30 in the Federal Court in Brisbane. The ACCC is seeking declarations, pecuniary penalties and costs. This story first appeared on SmartCompany.
The Australian Competition and Consumer Commission has blocked a $1.5 billion takeover of New South Wales government-owned power generator Macquarie Generation by AGL, citing market concentration concerns. “The proposed acquisition would result in the largest source of generation capacity in NSW being owned by one of the three largest retailers in NSW,” ACCC chairman Rod Sims says. “With this acquisition the three largest retailers in NSW would own a combined share of up to 80% of electricity generation capacity. “This is likely to raise barriers to entry and expansion for other electricity retailers in NSW and therefore reduce competition.” Building approvals jump nearly 7% in January Building approvals have jumped by nearly 7% seasonally adjusted during January, a faster rate than many economists had expected, according to new figures from the Australian Bureau of Statistics. Approvals for detached houses were up by 8.3%, while apartments and other dwellings were up 4.6%. In another piece of good news, the ABS figures also show Australia’s current account deficit shrank by 19% to $10.1 billion during the December quarter, with increasing exports and declining imports. Facebook looks to purchase drone aircraft maker Facebook is gearing up for another major takeover, with TechCrunch reporting the company is planning to launch a $60 million takeover of Titan Aerospace. Titan manufactures solar-powered near-orbital drones that can fly for up to five years continuously, with the social media giant reportedly interested in the aircraft in a bid to bring affordable internet access to 5 billion people worldwide who still lack connectivity. The project is set to compete against Google’s Project Loon R&D program, which aims to use hot air balloons to provide connectivity to remote areas. Overnight The Dow Jones Industrial Average is up to 16416.8. The Aussie dollar is up to US89.52 cents.
Competition watchdog the ACCC has secured a deal with supermarket giants Coles and Woolworths capping petrol discounts at 4¢ a litre. The deal will see large cross-subsidies for fuel, estimated at between $350 million to $509 million in 2013, reallocated to deeper discounts on grocery items. “I'm quite pleased with them giving discounts off groceries and discounts off petrol – it was the linkage we objected to,” ACCC chairman Rod Sims says. “[The major supermarket chains were] using their position and profits in one market to subsidise prices in another market – that was what was causing the problems. “Our evidence was it appeared when shopper dockets went above 4¢ a litre that petrol prices went up. People who didn't have shopper dockets were paying more for petrol when shopper dockets went above 4¢ a litre.” Jetstar Asia records a profit as Qantas nosedives Jetstar Asia, a joint venture partly owned by troubled airline Qantas, has reported a small full-year profit for the year to June. The airline, owned 49% by Qantas with the remainder held by Singaporean businessman Dennis Choo, posted a bottom-line profit of $S2.5 million ($A2.2 million) for the year to June, compared with $S2.1 million a year earlier. However, the carrier faces intensifying competition from other low-cost carriers in south-east Asia, including Malaysia's AirAsia and Singapore Airlines-backed Tiger Airways. Chinese shadow banking warnings Experts are warning China’s economy could be derailed by excessive borrowing through the shadow banking system, with the sector now accounting for the equivalent of 40% of China's gross domestic product (GDP). The growth of the sector has been caused by strict lending requirements to non-government entities, forcing many businesses to look elsewhere for finance. “Shadow banking is the financial activity that exists outside the formal banking sector,” says Peking University finance professor Michael Pettis. “So it includes things like wealth-management products, it includes pawn shops, it includes a wide variety of things – but basically it's the non-regulated part of the banking sector.” “There's been an increasing sense that a lot of [that] borrowing is simply going to protect existing borrowers from going bankrupt.” Overnight The Dow Jones Industrial Average closed up to 15882.2. The Aussie dollar is at US87.53 cents.
The US Federal Reserve has announced it will begin to scale down its massive stimulus program from next month, the first step towards winding back the program that helped the US recover from recession. The Fed has spent $US85 billion a month for a year as it sought to keep long-term interest rates in check and stimulate jobs and the economy. "Today's policy actions reflect the committee's assessment that the economy is continuing to make progress, that it also has much farther to travel before conditions can be judged normal," outgoing Fed chief Ben Bernanke said. The Fed will reduce its monthly asset purchases by $US10 billion from January, bringing them down to $US75 billion. Government close to rejecting assistance for SPC Ardmona The federal government is close to rejecting calls for financial help from food processor SPC Ardmona, amid fears it could set a “dangerous precedent”, The Australian reports. It says ministers believe the company has itself to blame for cost pressures it faces. The move comes as the government pledges $100 million to help create jobs for manufacturing workers following GM Holden’s announcement it will stop production of cars in 2017. Apple to amend consumer guarantees and warranties Apple has agreed to take action over its consumer guarantees and warranties to avoid being taken to court by Australia’s consumer watchdog. The Australian Competition and Consumer Commission had been investigating the technology giant over its consumer guarantee policies, the ABC reports. "The ACCC was concerned that Apple was applying its own warranties and refund policies effectively to the exclusion of the consumer guarantees contained in the Australian Consumer Law," ACCC chairman Rod Sims said. Apple has acknowledged some of its practices may have contravened Australian Consumer Law (ACL), and is taking a number of compliance measures including retraining staff. Markets The Dow Jones Industrial Average is up 1.9% at 16,172.08 points, while the Australian dollar is down at 88.5 US cents.
Online group buying site Scoopon has been hit with a $1 million penalty for making false and misleading representations to businesses and consumers. The Federal Court ruled Scoopon had contravened Australian Consumer Law when it misled consumers as to the price of goods advertised in its deals and their refund rights. Scoopon also misled businesses by saying there was no cost or risk involved with running a deal with Scoopon and it told one company that 30% of vouchers sold would not be redeemed. The court has also ordered Scoopon to pay a portion of the Australian Competition and Consumer Commission’s legal costs, to further develop its existing compliance program and ordered an injunction restraining Scoopon from making similar misleading representations for a two year period. In response to the findings, Scoopon executive general manager Jon Beros told SmartCompany in a statement Scoopon upholds “the highest standards in the industry”. “As a pioneer of the Australian group buying sector and founding member of the Australian Group Buying Code of Conduct, our leading position has meant Scoopon is expected to uphold the highest standards in the industry,” he says. “Following discussions with the ACCC, Scoopon has voluntarily accepted orders which include additional measures to improve compliance. Building on measures we've already introduced, Scoopon is re-training our team members, has introduced additional compliance roles and offered to work further with the group buying industry to implement stricter compliance standards.” Scoopon has been given a community service order to hold an educational seminar on ACL issues for other group buying businesses and members of the Association for Data-driven Marketing and Advertising. Telsyte senior research manager Sam Yip told SmartCompany because the industry is still developing, the sector has been constantly reforming its processes. “The industry is still quite young, so many of these things which occurred in the past, aren’t necessarily a reflection of what’s happening today,” he says. Speaking to SmartCompany when the ACCC launched court action against Scoopon in July, Yip said running deals through group buying sites shouldn’t be seen as a simple marketing solution for businesses. “There are explicit costs around margins that need to be considered and implicit costs about what it means for a brand and for staff and customers,” he says. “Often it is a lot more complex than advertised.” The ACCC launched action against Scoopon after receiving “a significant number of complaints” about the group buying industry since it emerged in Australia in 2010. ACCC chairman Rod Sims said in a statement it acknowledged Scoopon’s cooperation in the investigations which “enabled a more timely outcome to be reached”. “The ACCC understands that Scoopon has worked to improve its systems and processes which gave rise to this conduct to meet its obligations under the ACL. However this penalty serves as a warning to other businesses in the industry to improve practices or face action from the ACCC,” he says. “Online traders must understand their obligations are the same as traditional retailers’ and must not mislead customers or other businesses.” Sims says the ACCC will take further action in this sector to improve compliance and protect small businesses and consumers. This article first appeared on SmartCompany.
The bidding war for Australian dairy assets has taken an unexpected twist, with New Zealand-based dairy giant Fonterra launching an overnight raid on Bega shares. Overnight, Fonterra purchased 10% of Bega in an after-market share raid. Bega, in turn, is one of a number of companies bidding for Warrnambool Cheese and Butter, joining Canadian food giant Saputo, Lion and Murray Goulburn. Lion, Bega and Murray Goulburn currently own 45% of WCB, which they are keen to purchase in a bid to cash in on the growing infant formula market in Asia. "The key issue is the purchase of milk off farmers; are there enough people wanting to buy their milk?" ACCC chair Rod Sims says. "Basically Fonterra, Murray Goulburn and Warrnambool buy about one-third of the milk and Bega is quite a small player in that market, so Bega [bidding for WCB] wasn't such an issue. There is a bigger issue with Murray Goulburn.” South Korea close to free trade agreement South Korea is close to agreement on a potential free trade agreement with Australia, following a visit by Foreign Minister Julie Bishop two weeks ago. According to The Australian, the key sticking point in negotiations was a clause dealing with international arbitration, which the Rudd/Gillard government was unwilling to agree to, but the current government is. “The new government is taking a different approach, so the hurdle is being removed,” Young-Moo Kim, director-general for FTA negotiation at South Korea’s Ministry of Trade, Industry and Energy, says. Murdoch says embrace innovation Rupert Murdoch has urged Australians to embrace the challenges posed by the emergence of a middle class in China through innovation, in a speech to the Lowy Institute. “While the lack of a huge domestic market presents challenges, it also means we have fewer huge industries demanding the government protections common in large industrial nations – and fatal for any society that hopes to advance in a disruptive world,” Murdoch said. “The disruptive forces in the world economy today are as relentless as they are remorseless. But once we embrace that reality, we can make sure they are rewarding.” Overnight The Dow Jones Industrial Average is down 0.47% to 15545.75. The Aussie dollar is at US94.61 cents.
China has announced the creation of a new free-trade zone covering nearly 29 square kilometres on the eastern outskirts of Shanghai. The Chinese government says the new FTZ would open up the services sector to increased competition and would also serve as a testing site for future financial reforms, including a convertible yuan and liberalised interest rates. “It follows the trend of global economic developments and reflects a more active strategy of opening-up,” Commerce Minister Gao Hucheng told the state-run Xinhua news agency. ACCC accuses SalesForce and Origin of misleading door-to-door claims Consumer watchdog the ACCC initiated Federal Court proceedings against marketing company SalesForce and Origin Energy over its door-to-door sales practices, marking the fifth such case against an energy retailer. The ACCC alleges sales representatives harassed or coerced some customers, with some customers told there was a government requirement for them to switch their energy supplier to Origin. “The ACCC alleges that SalesForce sales representatives acting on behalf of Origin Energy made numerous false and/or misleading statements to consumers and breached the unsolicited consumer agreement (UCA) provisions of the Australian Consumer Law,” ACCC Chairman Rod Sims says. “The allegations also involve several instances of unconscionable conduct as well as instances of alleged undue harassment and/or coercion by sales representatives, which the ACCC considers to be particularly serious.” Auto component price fixing allegations The ACCC has accused a number of Japanese firms of price fixing, alleging the practice has pushed up the cost of some cars in Australia for consumers. As part of the proceedings, the ACCC accuses auto parts distributor Yazaki of pushing up the cost of wire harnesses for Toyota cars. “Wire harnesses can be anything up to 8% of the cost of a car, so this conduct has a serious impact on what people pay for a motor vehicle,” Sims says. “We also instituted proceedings this year for a number of Japanese companies in relation to ball bearings. And we are close to settlement with one or two of those companies at the moment.” Overnight The Dow Jones Industrial Average is down 0.46% to 15258.24 and the Aussie dollar is down to US93.12 cents.
The Commonwealth Bank has announced it is on track to deliver a record $7 billion annual profit, off the back of strong growth from its retail business.
Nokia chief executive Stephen Elop has defended his company’s controversial decision to adopt Windows Phone 8 over Android or an internally developed alternative.
Businesses have been put on notice after the competition watchdog warned it will be cracking down on fake product reviews and online voucher rip-offs in the new year.
A Melbourne-based skincare retailer has been hit with $100,000 in fines for engaging in resale price maintenance, prompting the competition watchdog to issue a stern warning to suppliers.
ACCC to clarify country of origin labelling but Australian Made Campaign says "deceptive" rules need to be changed3:49AM | Tuesday, 12 March
The Australian Competition and Consumer Commission is taking new steps to address misleading claims made on labels about country of origin claims but the Australian Made Campaign says the watchdog is not going far enough.
The Federal Court has ordered two businesses to pay a total penalty of $1 million for illegal door-to-door selling practices, following action by the competition watchdog.
The consumer watchdog has issued a warning about widespread unscrupulous industry practices in the door-to-door sales industry, but the industry says many of the practices raised by the ACCC have been addressed.
The competition watchdog has indicated the downward trend of carbon price complaints could continue, but insists it will continue to take a hardline approach to businesses that deliberately mislead consumers.
The top leaders of the trade union movement have discussed the prospect of Kevin Rudd returning to the leadership of the Labor Party as they prepare a battle plan against Coalition leader Tony Abbott.
The competition watchdog says it has received 630 complaints and enquiries about the carbon tax, but insists the number of complaints about small businesses has “generally been low”.
Small businesses unsure about carbon price claims can now access a dedicated hotline, designed to make it easier for consumers and business to complain if they suspect a price claim is false.
The carbon tax has been a contentious issue in the Australian business community since the Federal Government announced shortly after the last election that it will come into effect on July 1 this year.