Coles and Woolworths breached shopper-docket undertakings

Published: 2019-09-16 08:30:00
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On February 2014, Coles and Woolworth were taken to court in the separate misuse of market power they posed during that particular period. Australia competition and consumer commission claimed that the two chains had breached an undertaking that aimed at limiting fuel discounts associated to supermarket purchases to a maximum of 4 a liter. Shoppers were allowed to increment their discounts by spending money at Coles and Woolworths petrol stations' convenience stores. ACCC had reacted to this and moved to enforce its undertaking with the court.

During the court proceedings, the commissions lawyer claimed that the initial 4+4 cent fuel discount as alleged applied to all of its purchases. The supermarket later breached its undertaking by introducing a scheme that encouraged discount to be available to customers who had qualified the purchase put in place by the supermarket. The supermarket launched a new offer after realizing that the proceedings against it had begun. The terms of the offer were that the buyer was to be given a discount of 4 cents if he/she made purchases of more than $5. This offer was available to customers at the petrol station even without purchases from the supermarket. The offer was also applicable to be sued in collaboration with the 4 cent that was available on qualifying fuel purchase.

Focusing on the case of Coles, ACCC lawyer claimed that the offer presented of a bundled discount of 14 cents per liter breached its undertaking to the regulator. Coles had introduced a discount of 14 cents that was available to those customers who reached a set target put by the supermarket upon purchasing. The supermarket allowed a discount of more than four cents which was only accessible to the qualified customer, and according to ACCC, Coles had breached the undertaking that it presented earlier. According to the undertakings provided by the "Competition and Consumer Commission under section 87B of the Competition and Consumer Act 2010", the two supermarkets had breached the undertakings. The act provides Australia competition and consumer commission with the mandate to accept the commitment that has been written in the exercise of the power it poses under CCA, and the same time, it can enforce such undertakings in the federal court of Australia. With the proper involvement of ACCC, parties that participate in such undertakings can withdraw or differ. This section has been essential to the regulator since it acts as a valuable tool.

This section of the consumer and competition law is only applicable in a scenario where there is tangible evidence of a breach, the existence of the potential violation of the act that may another way justify litigation and according to ACCC there was enough evidence. According to this act, the court may decide to take the following steps if it is satisfied that the accused party actually breached the undertakings: to order that the individual who have committed the act to comply with the term of the undertaking; an order guiding the individual to pay to the Commonwealth a sum up to the amount of any monetary advantage that the individual has acquired individually or indirectly, and that is sensibly inferable from the breach; any request that the Court considers suitable guiding the individual to repay some other individual who has endured misfortune or harm as a consequence of the breach and lastly, any other order that the Court considers fitting to the scenario presented to it.

The question that can draft from the above scenario is that why did these supermarkets breach the undertakings. In its response in the court, the Coles lawyer claimed that It had no intention of breaching the contract as alleged by the ACCC. The lawyer argued that in its statement released through its official website, stated that before 1 January 2014, Coles Supermarkets ordinarily bore 75 for every penny of the expense of the offer by the method for the interior discount from Cole's general stores to Coles Express, in spite of the fact that this extent changed now and again. The lawyer further said that everything that the supermarket was attempting to do was unite two separate offers that the ACCC was content with independently and permit clients to utilize them together for most extreme worth and comfort," on the other hand, Woolworths breached this undertaking since it didn't want to make its discounts independent from each other.

The ruling

Basing on the facts presented to the court by both the parties, the court made its final ruling. The first ruling was that Woolworths breached the undertakings, and it was found guilty. Justice Robertson Clarified that the 8 percent for each liter discount on the single procurement at retail of fuel was dependent upon the securing of Woolworths supermarket (non-fuel) products or services since, as an issue of the terms and states of the offer, the client couldn't acquire that discount and this limits the client's delightful the essential." Woolworths through its lawyer welcomed the ruling saying that it had already restructured its fuel discounts. The lawyer further said that the company noted that it had before looked for an assertion from the Federal Court that it acknowledged that it expected to make its discounts free of each other, and this change was executed sometime prior. Cole, on the other hand, emerged victorious in that same case. The judge stated that the move by Cole to bring the two offers to its customers would allow the customers to use both of them together for convenience and maximum value. The presiding judge argued that the client were benefiting from this move undertake by Cole, and thus, it had not breached the agreement.

The ACCC lawyer stated that 4+4 cent discount conditional to supermarket purchases violated the agreement, and thus, it welcomed that ruling. Elsewhere, the decision that the two supermarkets can bundle the petrol station offer with the supermarket offer was disputed by ACCC. The ACCC lawyer stated that it was looking in into impacts that the ruling may have to the fuel market regarding competition

EnergyAustralia Australia consumer and completion Commission case

Last year, Australia consumer and competition commission focused on its effort on the harm caused by energy retailers who were representatives of EnergyAustralia involved in door-to-door selling. The company was fined $1.2 million over the deceptive contacts practiced by these door-to-door salespeople in the proceeding brought by Australia competition and consumer commission. On March 2013, ACCC started legal action against EnergyAustralia and the three companies that were acting on its behalf for making misleading claims and convincing the customer to sign contracts in their premise. The regulator claims that it was against the consumer law.

The company is believed to have breached various Unsolicited Consumer Agreement provisions of the Australia consumer law. These rules were put in place so as to protect the consumer in door-to-door selling, telemarketing and other forms of direct selling. The unsolicited consumer agreements give customers a ten day period to enable them to make sound decisions including changing their mind and terminating the contract. The consumers can also terminate the contract within the first six months if the supplier fails to meet the obligations. Some of the breaches that that the three sales company sales representatives violated were failure to; inform the consumer that they could leave if the consumer were not interested in signing the contract with them; tell the consumer that they will leave his /her premise in an event that the consumer had don't knock' sign showed and lastly lack of provision of information relating to their identity. During the court proceeding, ACCC claimed that the following were the false presentation made to the consumers by the company's sales personnel:

the consumer would qualify for extra government privileges if they moved from their current power provider to EnergyAustralia, and also their power bills will decrease by moving;

the sales personnel claimed that they were not doing this on their own but rather this initiative had the endorsement from the government and other agencies associated with the government;

the company representatives were approaching the consumers in a manner that this was the activity of the government to make sure the energy players were not exploiting the customers;

the sales personnel claimed that the current power charges they are being charged by the present retailer are against are higher and what the company was offering were rates put by the government.

Through its lawyer, the company stated that it was not intending to breach the consumer law but rather it was embarking on door-to-door sales campaign to get more customers and to have a competitive edge over its competitors. Just like any other modern cooperation, the company said it could not have done for itself and hence in needed to outsource companies who in turn took commission salespeople to do grass- root level selling. It didn't function admirably and in a face of complaints, the company needed to move away from that campaign after suffering lawful and reputational harm.

The court ruling

After everything had been submitted and heard by the federal court, the final decision was made. The EnergyAustralia was found guilty of that act, and it was ordered to pay a sum of cash amounting to $1.2 million. Referring to the claims brought forward by Australia Competition and Consumer Commission, the court stated that it was against the law for the company to use its sales agent in door-to-door selling with false information to a consumer. The court further said that the firm's three representatives acting on its behalf presented themselves to the customers homes with information that was false and deceiving with a lot of lies while trying to lure them to sign a contract that could see EnergyAustralia supply them with power. The judge relied on the sales report that was presented to the court as evidence that the customers, including those from its competitor, had accepted the new scheme introduced to them unless they contact EnergyAustralia within the first ten days of signing. The judge reacted to this by saying that signing up to customers without their consent led to misleading representations and involving in deceptive actions.

Through the involvement of the sale representatives, the court declared that EnergyAustralia had breached various Unsolicited Consumer Agreement provisions of the Australian Consumer Law. These laws were put enacted to look into the rights of consumers when it comes to unlawful tactics associated with door-to-door selling. Justice Middleton, in referring to the Unsolicited Consumer Agreement ruled that the measures put in place by EnergyAustralia limits exposure to inconvenience, interfere with privacy or damage when they decide to procure services and goods on their doorstep without proper advice from the salesperson that he/she is there to sell them something. They can as well request the agents to leave if they are not interested. The EnergyAustralia did not go down without a fight either; its lawyer stated that most of the events that were highlighted by the ACCC that catalyst the ruling occurred in 2011 and 2012. During this time, the company had stopped door-knocking activities in March 2013.

The three marketing businesses that were employed by EnergyAustralia were not spared either. The companies were ordered to pay $290, 00 and they include multiple stories Pty Ltd that was sentenced to pay $20000. The remaining $90000 was shared between the Real Technologies that paid $40000 while Australian sales and promotions Pty were ordered to pay $50000.The ACCC has made another in its effor...

sheldon

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