Australia: Significantly increased CCA/ACL penalties and prohibitions on Unfair Contract Terms are on the horizon

The Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 will, for the first time, apply penalties to unfair contract terms and will increase maximum penalties under the CCA and ACL five-fold

In brief

On 28 September 2022, the Government introduced the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 ("Bill").  If passed, the Bill will:

  • Introduce a civil penalty regime prohibiting the use of and reliance on unfair contract terms (UCTs) in standard form contracts
  • Increase the maximum penalties that may be awarded for breaches of the civil penalty provisions in Parts IV, IVBA, X and XICA of the Competition and Consumer Act 2010 (CCA) and under the Australian Consumer Law (ACL) to the greater of:
    • AUD 50 million
    • If the court can determine the value of the benefit obtained — three times the value of that benefit
    • If the court cannot determine the value of the benefit obtained — 30% of the body corporate’s adjusted turnover during the breach turnover period for the offence, act or omission
  • Increase the maximum civil penalty for breaches by telecommunications providers of the Competition Rule, to up to AUD 71 million plus AUD 3 million for every day that a contravention continues in the most serious cases

Contents

So as to enable industry to make any necessary changes to applicable standard form contracts, the amended UCT regime will commence on the day after the period of 12 months after the Bill receives Royal Assent and will apply to standard form contracts that are made or renewed at or after the commencement date.

The amended penalty regime will commence the day after Royal Assent and will apply to offences committed, or contraventions, acts or omissions that occur from that date.

This alert provides an overview of the key changes that are proposed to be introduced and highlights important considerations for businesses.

Click here to access full alert.


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