COMM1100 Chap.11 Consumer and Competition Law
Consumer and Competition Law
Consumer and competition law are the course’s main examples of law that supports markets by fixing their failures. The Australian Consumer Law, in Schedule 2 of the Competition and Consumer Act 2010 (Cth), targets misleading conduct, unfair dealing and products that fail to meet basic standards.
Competition law, in the same Act, targets cartels and the misuse of market power.
This chapter explains the structure of the ACL, the prohibition on misleading or deceptive conduct, unconscionable conduct, the three-part test for unfair contract terms, the consumer guarantees and the remedies for major and minor failures.
It then links competition law to the market-power economics of Week 3 through the Week 4 airline case study.
In the case-study analysis these laws are often where the legal issues lie: a misleading claim, a one-sided term in a subscription, a refusal to honour a guarantee, or a market with too few competitors.
Matching each legal rule to the economic problem it addresses makes an analysis much stronger than describing the law on its own.
What this chapter covers
- 01
The Australian Consumer Law and its regulators
- 02
General protections and specific protections
- 03
Misleading or deceptive conduct
- 04
Unconscionable conduct and the factors courts weigh
- 05
Unfair terms in standard form consumer contracts
- 06
Consumer guarantees for goods and services
- 07
Major and minor failures and their remedies
- 08
Competition law: cartels and misuse of market power
Worked example · free
A phone that stops charging after five weeks
- +1The student is a consumer: the phone was bought for personal use.
- +1A phone that cannot charge after five weeks of normal use is not of acceptable quality: it is not free from defects or durable.
- +1The guarantees cannot be excluded by policy or contract, and the supplier owes them alongside the manufacturer, so the retailer must respond.
- +1If the fault can be fixed within a reasonable time it is a minor failure and repair is the usual remedy; if not, it is a major failure and the student may reject the phone and choose a refund or replacement.
Key terms
- Australian Consumer Law
- The national consumer protection law in Schedule 2 of the Competition and Consumer Act 2010 (Cth).
- Misleading conduct
- Conduct in trade or commerce that misleads or deceives, or is likely to, judged by its overall impression.
- Unconscionable conduct
- Conduct so harsh it goes against good conscience, judged by factors such as bargaining power and pressure.
- Standard form contract
- A contract prepared by one party and offered on a take-it-or-leave-it basis, without real negotiation.
- Acceptable quality
- The consumer guarantee that goods are fit for their usual purposes, acceptable in finish, free from defects, safe and durable.
- Cartel
- An illegal agreement between competitors, for example to fix prices or divide up customers or markets.
Consumer and Competition Law FAQ
Does misleading conduct have to be intentional?
No. The prohibition does not require intention, fraud or negligence. The question is whether the conduct, judged by its overall impression on ordinary members of the affected group, was misleading or likely to mislead.
Can a shop's no-refund policy override the consumer guarantees?
No. The consumer guarantees cannot be excluded by contract, and a term that tries to exclude them is void. A business may limit liability in some cases only where the limit is fair and reasonable.
What makes a contract term unfair under the ACL?
In a standard form consumer contract, a term is unfair if it causes a significant imbalance in rights and obligations, is not reasonably necessary to protect the legitimate interests of the advantaged party, and would cause detriment.
Which cases can I use for the case-study analysis?
Choose a case that has not been covered in tutorials, lectures or previous assessments. The course publishes a list of cases already used, including the Week 4 airline industry case and the ACCC matters discussed that week.
Who enforces the Australian Consumer Law?
The Australian Competition and Consumer Commission enforces it nationally, together with state and territory consumer regulators such as Fair Trading NSW. Courts and the NSW Civil and Administrative Tribunal can also hear and decide disputes under it.
Assessment move
Organise your notes as the law is organised: general protections, specific protections, guarantees and remedies, then competition law. For each, write the test in one sentence and one example of your own. Practise a complaint scenario from facts to remedy in the fixed order of the worked example.
For the case study, pair each legal issue with the economic failure it addresses, such as misleading claims and private information, or cartels and market power.
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