The Community Network Ordered To Pay $230,000 In Penalties
The Australian Competition and Consumer Commission (ACCC) has advised that the Federal Court of Australia has ordered Multimedia International Services, trading as The Community Network, to pay $230,000 in penalties for breaches of the Australian Consumer Law.
The ACCC had last December advised that it was taking action against The Community Network, which sells digital advertising services to businesses, which is presented on branded LCD screens at various sites, including fitness centres, news agencies and shopping centres.
“The court declared that The Community Network engaged in unconscionable conduct in its dealings with one small business, including by refusing to release it from its contract for advertising services when The Community Network was not providing those advertising services, then pursuing it for non-payment, threatening legal action and engaging debt collectors,” the ACCC stated.
“The court also declared that The Community Network made false or misleading representations to two other small businesses and wrongly accepted payments from them.”
ACCC deputy chair Dr Michael Schaper noted that unconscionable conduct, particularly where it affects small businesses, “is a priority area for the ACCC”.
“The ACCC brought these proceedings because it had received numerous complaints from small businesses that The Community Network was requiring payments to be continued under its contracts, despite not providing the digital advertising services promised,” Schaper commented.
“Some small businesses had also complained that they were misled by the failure to clearly disclose the effect of an automatic renewal term.
“This is an important case, because it makes it clear that businesses like The Community Network must comply with the Australian Consumer Law in their dealings with small businesses. The ACCC will continue to take appropriate enforcement action to protect small businesses.”
The ACCC advised that it has also accepted a court enforceable undertaking from The Community Network to resolve concerns about its standard form contract, which included an automatic renewal term, with the ACCC “concerned this term had the potential to be misleading or deceptive to prospective advertisers”.
“The Community Network has undertaken to amend its standard form contract and change certain aspects of its practices to address the ACCC’s concerns,” Schaper commented. “The amendments include a reduction of the notice period required to terminate the contract.”
The Community Network provided refunds to the small businesses named in the proceedings, following commencement of the proceedings, the ACCC advised.