Direct Selling Legal Update – December 2018

Welcome to the latest issue of the Addisons Direct Selling Legal Update.

There have been a number of significant legal developments which impact upon the direct selling sector in the second half of 2018. In this newsletter, we take a closer look at some of those developments.

Bigger Australian Consumer Law Penalties for Christmas

Businesses beware. The penalty regime for consumer law in Australia has undergone a serious overhaul – just in time for the countdown to Christmas.

From 1 September 2018, the maximum pecuniary penalties the ACCC can seek for contraventions of key provisions of the Australian Consumer Law (ACL) increased significantly:

for corporations – from $1.1 million to the greater of: (a) $10 million; (b) 3x the value of the benefit; and (c) if the benefit cannot be determined, 10% of the annual Australian turnover in the preceding 12 months; and
for individuals – from $220,000 to $500,000.

Our Focus Paper looks at what this means for your business, read the full paper below.

The ACCC releases its Annual Report

Heading into the Christmas period is always a festive time at the ACCC. Admittedly service-provider drinks are limited due to the ACCC’s gifts & gratuities policy, Christmas lunch is pay-your-own-way as is required, but the one event ACCC staff always look forward to is the release of the ACCC’s annual report. On 18 October 2018, the ACCC released its annual report detailing its activities over the past year.

In this Focus Paper, we tell you just how much the ACCC achieved in 2018 – reference is made to substantial achievements, especially in respect of obtaining record fines.

Australia’s war on waste

During 2018, a number of direct selling companies received letters from the Australian Packaging Covenant Organisation (Covenant) alerting them (if they do not know already) of their obligations relating to the control of waste from consumer packaging.

Currently, in Australia, there are multiple layers of mandatory, co-regulatory (hybrid) and voluntary schemes in place that control, or relate to, the environmental consequences of consumer products and, in particular, their packaging. Whether a company is affected depends on factors such as its annual turnover, its location, its role in the supply chain and the nature of the product or packaging it produces, supplies, distributes or consumes.

This Focus Paper provides a snapshot of the Covenant, the broadest instrument in Australia relating to the control of waste from consumer packaging.

Recent TGA changes to permitted ingredients in listed complementary medicines

Our Focus Paper looks at recent amendments to the Therapeutic Goods Act 1989 including the introduction of new application categories and legislated timeframes in respect of the evaluation of new ingredients for entry onto the Therapeutic Goods (Permissible Ingredients) Determination and a period of “market exclusivity” for those new substances/ingredients.

Penalties looming for unfair small business contracts

On 14 October 2018, the ACCC’s Deputy Chair, Mick Keogh, again reiterated the ACCC’s view that major changes are required to unfair contract laws for small businesses. His speech at the Franchise Council of Australia Law Symposium follows similar comments made earlier by the ACCC Chair, Rod Sims, at his address to the Council of Small Business Organisations Australia in August.

According to Mr Keogh, the ACCC considers that there are two fundamental flaws with the current regime: (1) unfair terms are not illegal; and (2) no civil pecuniary penalties or infringement notices are available for unfair terms.

The ACCC wants to be able to hold businesses to account for their unfair conduct by strengthening the laws to ensure that the laws are useful in protecting small businesses. In our Focus Paper, we provide a snapshot of the enforcement action to date taken by the ACCC and what we can expect from the ACCC as we move into 2019.

We hope that you find items of interest in this edition of our Addisons Direct Selling Legal Update. If you have any queries or would like to provide feedback or discuss, please do not hesitate to contact any of Addisons’ Direct Selling team.

Best wishes for a happy Christmas and a prosperous 2019!

Cate Sendall

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