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This week in Penalities...

ACCC isn’t playing games

The Australian Competition and Consumer Commission (ACCC) has initiated proceedings against Sony Interactive Entertainment for making false and misleading statements to Australian consumers on their online store.

In an official statement released earlier this week, ACCC alleged Sony Europe told consumers that they did not refund games if the purchase had been conducted online or after a 14-day period from purchase. However, the ACCC indicated that this in direct contradiction to the rights guaranteed to Australian consumers under Australian Consumer Law (ACL).

The ACCC stated that the ACL guarantees consumers a refund if the product is faulty or ‘not fit for purpose’.

“Consumer guarantees do not expire after a digital product has been downloaded, as we allege Sony Europe told consumers, and refunds must be given in the form of original payment unless a consumer chooses to receive it in store credit,” ACCC Chairman Rod Simms said.

“Consumers who buy digital products online have exactly the same rights as they would at a physical store.”

Sims added no matter where in the world a company operates, if they are selling to Australian consumers, they are subject to ACL.

Garuda Airlines to pay $19 Million

Another airline has been ordered to pay penalties for colluding on fees and surcharges.

“Price fixing is a serious matter because it unfairly reduces competition in the market for Australian businesses and consumers, and this international cartel is one of the worst examples we have seen,” ACCC Chair Rod Sims said.

In their official statement earlier this week, the Australian Competition and Consumer Commission (ACCC) said that the penalties against Garuda Airlines follow those the competition regulator took in court against what they called ‘a global air cargo cartel’.

“We are committed to pursuing cartel conduct from both domestic and overseas operators, and think the total penalty ordered against all the airlines involved sends a strong deterrent message, particularly when it comes to international anti-competitive conduct.”

The Federal Court dismissed the competition regulator’s previous case against the Air New Zealand and Garuda in 2014.

“We are pleased to finally have resolution of this matter, which confirms our view that it was an important matter for us to appeal,” Sims said.

The Indonesian airline fixed the price of security and fuel charges between 2003 and 2006. For that misconduct, it has been fined $15 million in penalties and $4 million additional for fuel surcharges—a total of $19 million.

More False and Misleading conduct

Another airline is in trouble with the ACCC after the Federal Court ordered Jetstar to pay $1.95 million for false and misleading conduct.

This is the same amount as the joint submission made by the regulator and the airline late last year.

The competition regulator alleged that Jetstar breached Australian Consumer Law (ACL) between 2017 and 2018 when they made false and misleading statements about certain ‘rights and remedies’ available to consumers.

In their official message today, the ACCC said that, between the period of April 2017 and March 2018, Jetstar represented to their customers that certain funds were non-refundable and that customers could only get a refund if they purchased a more-expensive fare.

“Businesses simply cannot make blanket ‘no refunds’ statements, because they can mislead consumers into thinking they can never get a refund under any circumstances," ACCC Chair Rod Sims said, after the Federal Court’s decision.

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