ACCC Taking Action Against The Community Network
The ACCC today advised that it has instituted proceedings in the Federal Court against Multimedia International Services “for allegedly engaging in unconscionable conduct, making false or misleading representations and wrongly accepting payments from small businesses”, seeking pecuniary penalties, declarations, injunctions and costs.
The Community Network sells digital advertising to businesses around Australia, which is presented on branded LCD screens at various sites, including fitness centres, news agencies and shopping centres.
Among the ACCC’s allegations is that The Community Network engaged in unconscionable conduct in its dealings with two small businesses, including by refusing to release them from contracts for advertising services when The Community Network was not providing those services, then pursuing them for non-payment, threatening legal action and, in one case, engaging debt collectors.
ACCC deputy chair Dr Michael Schaper stated that unconscionable conduct affecting small businesses “is a current enforcement priority for the ACCC”.
“In these proceedings we allege that in all the circumstances The Community Network’s conduct was unconscionable in relation to two small businesses, when it did not supply contracted advertising services, but continued to enforce payment obligations and would not permit termination of the contract by the small businesses,” Dr Schaper stated.
“The ACCC also alleges that The Community Network made false or misleading representations about the terms of the agreements it made with three small businesses. In any contract with small businesses, the terms and conditions must be fully disclosed, particularly those which are onerous, such as terms restricting the small business from terminating the contract or automatically rolling over the contract for a substantial period.
“Businesses should also be aware that they must not accept payment for goods or services from other businesses if they are aware or ought to be aware that there are reasonable grounds for believing that they will not be able to supply them in a timely manner, or at all. This is a breach of the Australian Consumer Law and may attract substantial penalties.”