Like many suburban law practices, I have my fair share of small to medium sized business clients. A subject that regularly comes up are many of the obligations of business owners under various competition and consumer laws. The ones most referred to are under the Commonwealth's Competition and Consumer Act (previously called the Trade Practices Act).
Many are aware of the extent of these laws. Take wholesale for instance. Generally, a supplier of goods to a retailer can't tell a retailer the price the retailer must sell the item for - it's anti-competitive. That's why on many goods or catalouges you often a phrase "recommended retail price". Then there are laws about false and misleading advertising, collusion, exclusive dealing, and the list goes on.
Part of a lawyer's role in certain cases is, I feel, not only to provide advice, but also to educate. Many clients appreciate it and hopefully I've done my bit to help them avoid potential trouble!
What does surprise me is when bigger players should've known better - usually because they're far more experienced and have the resources to keep their operators and franchisees informed and in line. This week we learn from a ACCC report that 6 West Australian Harvey Norman franchisees were fined for engaging in a bait-and-switch practice. It's where one advertises a great deal on a product, you get there, and because they originally held only a very small number of the items, you're told something like "sorry, we've sold out" and then they try to sell you another, often higher priced, item. In this WA case, it's reported these particular franchisees didn't even stock the advertised products (cameras) in the first place!
Competition laws apply to big AND small businesses. The penalties are substantial. If you're unsure how certain practices in your business stack up, I suggest you play it safe and get advice sooner rather than later.
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