Treasury is welcoming input on proposed laws to regulate unfair trading practices in Australia. But be quick – the consultation period ends on 29 November 2023.
Why are these reforms being proposed?
Within the current legal framework set by the Australian Consumer Law, businesses must avoid engaging in unconscionable conduct. This ban prevents conduct which is “particularly harsh or oppressive” (Treasury, 2023)1, with multiple factors usually being required to meet the threshold. Businesses must also avoid conduct which is misleading or deceptive or likely to mislead or deceive.
These regulations provide a high threshold for misconduct from businesses. Treasury is proposing that conduct which doesn’t reach these thresholds but is nonetheless harmful to consumers, needs to be addressed – this is the gap the “unfair trading practices” reforms seek to fill.
What is an Unfair Trading Practice?
Treasury offers various examples of potentially unfair trading practices in their Consultation Regulation Impact Statement:
- Inducing consumer consent or agreement to data collection through concealed data practices;
- Exploiting bargaining power imbalances in supply chain arrangements, including by unilaterally varying supply terms at short notice;
- Omitting or obfuscating material information which distorts consumers’ expectations or understanding of the product or service being offered;
- Using opaque data-driven targeting or other interface design strategies to undermine consumer autonomy;
- Exploiting or ignoring the behavioural vulnerabilities of consumers that are present in the ‘choice architecture’ of products or services (digital or otherwise);
- Adopting business practices or designing a product or service in a way that dissuades a consumer from exercising their contractual or other legal rights;
- Non-disclosure of contract terms including financial obligations (at least until after the contract is entered into);
- All or nothing ‘clickwrap’ consents that result in harmful and excessive tracking, collection and use of data, and don’t provide consumers with meaningful control of the collection and use of their data; and
- Providing ineffective and/or complex disclosures of key information when obtaining consent or agreement to enter into contract
What should you do?
Submissions to the Treasury regarding the reforms are open until 29 November 2023. A request for confidentiality for all or part of a submission is possible, so there is no reason not to make your voice heard before the 29 November 2023 cutoff. If these reforms are passed, the landscape for Australian commercial law will shift dramatically – let the Treasury know if “unfair trading practices” really is too low a threshold.