Competition And Consumer Act

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Competition And Consumer Act

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Competition And Consumer Act

1 Download8 Pages / 1,761 Words

Question:
Discuss about the Competition and Consumer Act.

Answer:
Introduction:

The key business laws which can assist Bill and Jill in this present scenario are the Competition Laws and Consumer Laws of Australia. Under the Competition and Consumer Act (CCA), it is imperative for any business establishment to conduct their business operations in a fair and ethical manner. The Competition and Consumer Act helps to ensure that the trading is fair for the business as well as the customers. The CCA covers most of the market place and it deals with retailers, suppliers, wholesalers, retailers, customers and market competitors. It strives to put an end to the unfair market practices by ensuring a strict adherence to the industry codes of practice which involves product safety, product labeling, mergers and acquisitions of business establishments, collective bargaining and price monitoring. In the case scenario given before us we can clearly see that Dodgy Pty. Ltd which owned the Fine Food Café clearly violated the ethical code of conduct in their business (Phau & Kea, 2007).
In the contract undertaken between Dodgy Pty. Ltd. and the new owners (Bill and Jill), Dodgy Pty. Ltd. escalated their weekly earnings from the café in order to provided a false impression to Bill and Jill that the café was indeed a very popular hangout for the customers of the locality and it earned sufficient revenues throughout the week to take care of their business needs. Dodgy Pty. Ltd. has claimed that the café has been earning weekly revenues of $10000 since the last 5 years. The company also stated that their cost of operations per week was approximately $3000. While running the business for quite some time, the new owners (Bill and Jill) came to realise that their average weekly takings are as low as $2000 which was not sufficient enough to take care of the business expenses of the café. Thus, the organisation has hidden the truth from their clients and had deliberately provided wrong impression to the new owners to give them the impression that the café was indeed a very profitable business venture who would bear long term gains and benefits for the new owners (Mackenzie et al. 2007).
The Australian Consumer Law is another legislation from which Bill and Jill will be able to benefit. This law is playing a vital role in upholding the rights of the consumers and providing them protection from unethical trade practices. The Australian Consumer Law provides protection against property promoters who are often unable to substantiate the success stories and claims of profits which they promote. This law prohibits any kind of misleading information or deceptive behavior on the part of property sellers in order to influence the buying behavior of the customers. The fact that Dodgy Pty. Ltd. had fudged the real information and provided misleading data regarding the weekly revenues earned from the restaurant, it is clearly evident that Bill and Jill have been duped into buying the Fine Food Café at a much inflated price than original (Yeung, 2009).
Thus, by applying the two laws that has been discussed above, Bill and Jill can file a case against Dodgy Pty. Ltd. and claim compensation from them for the losses suffered in their business.

The key areas of business law that are relevant in these facts
The key areas of business law which are relevant in this present scenario are the Competition and Consumer Act (CCA) of 2010, Product Liability Regulation and Consumer Laws. The Competition and Consumer Act (CCA) of 2010 is applicable to each and every aspect of a business which includes pricing, advertising, transactions with customers and other business establishments. All business establishments must comply with the CCA in order to improve their performance in the market and providing a competitive edge to their business. This will invariably play a vital role in helping the business establishments to improve their relationship with their customers and this will enable them to enhance the reputation in the market. The Australian Competition and Consumer Commission (ACCC) is in charge of administering the CCA and their main objective is to promote ethical and fair business practices and create an efficient marketplace for business entities (Adams & Nehme, 2011). In the given case scenario, we can clearly see that Homeslice Pizza utilised UberEats in the process of picking up and delivering pizza to the suburbs of Sydney. Initially, Homeslice Pizza had good sales in the market and the UberEats played a very essential role in the success of the business. However, in order to cut down on the operational cost, Hugh the owner of the Homeslice Pizza stopped the delivery service provided by UberEats and utilised his son Theo to personally deliver the pizzas using his car. Hugh did not bother to register any documents regarding the change of delivery process and they claimed in their advertisements that they are using the delivery service of UberEats. This is a clear violation of the ethical code of conduct in a business. Hugh in order to earn more profits from his business has utilised unfair trading practices to gain a competitive advantage in the market. The company has also wrongfully claimed that they have utilised the delivery services of UberEats. Thus, the Competition and Consumer Act (CCA) of 2010 is applicable in this scenario (Yeung, 2009).
Australia has a national statutory framework which aims to regulate the product safety and information standards in Australia. These standards play a vital role in ensuring that harmful are not being marketed and sold to the customers in the market. These standards are also enforced by the ACCC along with the state and territory fair trade offices which monitor the enforcement of product safety rules in the respective states. The Code of Practice essentially describes and states the code of conduct for business establishments. It plays a vital role in protecting the business establishments as well as their customers from unfair trading practices by enabling the business establishments to operate under a fair competition and ensuring that the interests of the customers are always protected. Under the Code of Practice, an organisation is bound to inform their customers regarding what type of products and services they are dealing with. Business establishments can incorporate their own Code of Practice or they can adopt the industry specific code of practice (Zumbo, 2007). In the given scenario, we can clearly see that in order to maximize the profits and revenues from his business, Hugh clearly violated the product safety standards which caused the death of a customer. He utilised unfair trading practices and substituted old and out of data cheese in his pizzas. The utter disregard of Hugh to ensure the quality of cheese which was being provided to their customers in the market made many customers sick and it resulted in the death of a customer. However, in their advertisements Hugh has claimed that Homeslice Pizza only incorporates the freshest ingredients with farm fresh cheeses. This gross violation of public health and safety standards merely for the purpose of maximizing the profits and revenues of Homeslice Pizza make it liable to face the product liability regulation (Corones, 2013).
The consumer laws are also applicable in this scenario because due to the gross negligence of Hugh, many customers have become sick after consuming the stale and out of date ingredients which have been used in the pizzas delivered by Homeslice Pizza. In the case scenario presented before us, Hugh deliberately used sub standard quality of food in order to cut down on his business expenses and thus his actions made him liable towards his customers. Being a businessman, Hugh must be responsible and accountable towards ensuring the health and safety of his customers. Hugh was supposed to protect the interests of his consumers and he miserably failed in performing his duty and thus Hugh has been found guilty of violating the consumer laws in Australia (Quinlan & Johnstone, 2009).
Who can take legal action and what remedies could be given by a court?
All the customers who have been at the receiving end of the alleged malpractice of Hugh and all those individuals whose health has been threatened due to the poor quality of products used by Hugh have the right to take legal action against Hugh and his pizza business, Homeslice Pizza. The customers of Hugh are well within their rights to sue Homeslice Pizza and claim compensation in a court of law for using sub-standard and stale food products in their pizzas which compromised and threatened their health and well being. The fact that one person has died due to the inferior quality of food products make Hugh responsible for culpable homicide and thus Hugh would have to face prison terms if it is proved in a court of law that the customer died due to consumption of stale and inferior quality of food that has been served by Homeslice Pizza. Futhermore, the Australian Competition and Consumer Commission (ACCC) can permanently close down the business operated by Hugh and impose huge fines on Homeslice Pizza for all the alleged malpractices and utter disregarding for the ethical code of conduct in business and the gross violation of Competition and Consumer Act (CCA) of 2010, Product Liability Regulation and Consumer Laws in Australia (Ardic et al. 2011).

Reference
Phau, I., & Kea, G. (2007). Attitudes of university students toward business ethics: a cross-national investigation of Australia, Singapore and Hong Kong. Journal of Business Ethics, 72(1), 61-75.
Quinlan, M., & Johnstone, R. (2009). The implications of de‐collectivist industrial relations laws and associated developments for worker health and safety in Australia, 1996–2007. Industrial Relations Journal, 40(5), 426-443.
Mackenzie, F. J., Jordens, C. F. C., Ankeny, R. A., McPhee, J., & Kerridge, I. H. (2007). Direct‐to‐consumer advertising under the radar: the need for realistic drugs policy in Australia. Internal medicine journal, 37(4), 224-228.
Ardic, O. P., Ibrahim, J., & Mylenko, N. (2011). Consumer protection laws and regulations in deposit and loan services: A cross-country analysis with a new data set. World Bank Policy Research Working Paper Series, Vol.
Yeung, K. (2009). Presentational management and the pursuit of regulatory legitimacy: A comparative study of competition and consumer agencies in the United Kingdom and Australia. Public Administration, 87(2), 274-294.
Corones, S. G. (2013). The Australian consumer law. Thomson Reuters, Lawbook Co..
Adams, M., & Nehme, M. (2011). Consumer Law: No New Specific Legislation Required to Deal with’Greenwashing’. Keeping good companies, 63(7), 419.
Nagarajan, V. (2007). Reconceiving regulation: finding a place for the consumer. Available at SSRN 1120092.
Zumbo, F. (2007). Are Australia’s consumer laws fit for purpose?. Trade Pract. Law J, 15, 228.

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