Consumer Protection in Business Activities

This essay discusses the need for consumer protection in business activities and the risks of ignoring consumer rights. It also explores the laws and regulations in Australia for consumer protection.

Running head: BUSINESS, SOCIETY AND POLICY
Business Society and Policy
Name of Student
Name of University
Author Note

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Introduction
In this essay the need for consumer protection in business activities has been discussed in
relation to a case related to the specific topic. The risks of ignoring consumer rights have further
been discussed. For the maximization of profit many businessmen adopt unfair trade practices
for exploiting the customers, such as adulteration, boarding and black marketing. These practices
result in the customers not getting the value for their money. For this reason there are various
federal and state laws for consumer protection that are specifically designed for the protection of
the customers from deceptive, fraudulent or unfair business practices. Violation of these laws can
be seen to be subjecting in various lawsuits, penalties and negative publicity towards the
companies. In Australia laws like Trade Practices Act 1974 and the Australian Consumer Law
under the schedule 2 of the Competition and Consumer Act 2010 are introduced for the
protection of the customers from unfair trade practices.
Presentation of views
A consumer is seen to be defined under the Competition and Consumer Act 2010 as any
person acquiring goods or services that are of the price less than $40,000 (Consumerlaw.gov.au,
2019). For ensuring the protection of the customers and for the practice of fair trading in
Australia the Australian Consumer Law under the Schedule 2 of the Competition and Consumer
Act 2010 was introduced. The Australian Consumer Law could be seen to be replacing 17
existing consumer laws including federal, state and territorial consumer laws. It is jointly
enforced by the State and Territory consumer protection Agencies and the Australian
Competition and Consumer Commission. In the Australian Consumer Law the areas relating to

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the misleading or deceptive conducts such as silence, puffery, disclaimers, predictions and
opinions, small prints, false representations like consumer guarantees, sale or grant of land,
testimonials, offers of rebates, prizes, gifts and other free items, wrongful acceptance of
payments for goods and services, unconscionable conducts, false representations regarding the
country of origin that includes the claims for the country of origin, production and manufacture
costs, made in claims, claims regarding the use of the logo prescribed, product of claims and
substantial transformation, information standards including the business responsibilities
(Kariyawasam and Wigley 2017). According to the Australian Consumer Law every consumer
has certain rights. These rights are the right to privacy which includes the right for refusing
unwanted marketing like calls, messages, email spams or letters, the right to honest and fair
dealings, right to production selection, the right to receive warnings on facts and nature of risks
that can be seen to be possible in near future, rights towards warranties, product monitoring for
safety issues and damage claiming regarding injuries that have been caused by unsafe or
defective products (Orton et al. 2017).
Under the ACL certain rights of the consumers are set out known as consumer
guarantees. The rights of a consumer under the Australian Consumer Law introduced under the
schedule 2 of the Competition and Consumer Act 2010 are the rights to repair, right to
replacement or refund, right to damage compensation and right to cancel a faulty service
(Australian Competition and Consumer Commission, 2019). The reasons for the need of this act
for the protection of customer rights are promoting a marketplace relating to consumer products
and services that can be regarded as fair, sustainable and easily accessible, establishing consumer
protection norms and standards in a national level, prohibition of unfair business practices and
marketing, providing for an improvement of standards of the information relating to the

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customers and promoting legislative and enforcement frameworks in relation to the consumer
transactions and agreement (Competition 2014).
With rights come the risk of ignorance and exploitations of those rights. Under the
Australian Consumer Law introduced by the schedule 2 of the Competition and Consumer Act
2010 provisions for penalties of ignoring the customer rights have been mentioned. Under the
Australian Consumer Law for any deceptive or misleading conduct the customer has the right to
claim remedies of civil nature that can be seen to be including injunctions, declarations,
damages, non-punitive order, orders for non party consumers and compensatory orders.
For misleading or false representation, unconscionable conduct, making misleading or
false representation of origin of country and other offences relating to the supply of goods not in
compliance with the information provided, the maximum penalty for criminal offence is
$220,000 for any individual and $1.1 million for a corporate body. For these criminal offences
civil penalties of injunction, personal damages, adverse publicity orders, corrective advertising
orders, compensatory orders and personal damages can also be claimed (Scott 2018).
Presentation of a case
As mentioned above there are certain risks of the violation of the consumer rights under
the Australian Consumer Law. For their own profit businesses breach the law by the way of
misleading claims, false representation and unconscionable conducts against the consumers. For
this reason the Australian Competition and Consumer Commission enforces certain regulations
and legislations for stopping the unfair trade practices that can be seen as exploiting the rights of
a consumer.

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Under the provisions of Australian Competition and Consumer Commission misleading
and deceptive conducts can be defined as the behavior of any business that would be affecting
the impressions of any audience in regard to any goods or services. The most important question
that is needed to be asked in case of deciding if a conduct is likely to misleading or deceptive is
whether the overall impression created by the way of the conduct can be seen as inaccurate or
false. It is provided in the section 18 of the Australian Consumer Law that no person should be
engaging in any kind of conduct in trade or commerce that is deceptive or misleading. In the
provisions of section 33 of the Australian Consumer Law it has been prohibited to be misleading
the public relating to nature, characteristics or quality of goods.
These above mentioned provisions can be seen to be applicable in the case Reckitt
Benckiser (Australia) Pty Ltd v Procter & Gamble Australia Pty Ltd [2018]. The case was
involving allegations of deceptive and misleading conducts in suitability for the quality and
purpose of the product in regard to rival manufacturers of dishwasher tablets. In the case it is
seen that Reckitt Benckiser Australia (RBA) has applied for an injunction against Procter and
Gamble Australia (PGA) to the Federal Court for an injunction for stopping a television
commercial broadcasting by Procter and Gamble that has allegedly indicated that Procter and
Gamble Australia’s Fairy Tablets were better than Reckitt Benckiser Australia’s Finish Tablets.
Both the parties have been involved in a law suit relating to another advertisement of Procter and
Gamble for dishwasher tablets. This case was Reckitt Benckiser (Australia) Pty Ltd v Procter &
Gamble Australia Pty Ltd [2015]. It was represented in the commercial of Procter and Gamble
the Fairy Dishwasher Tablets are proven to better at “cleaning stuck on food on the first wash”.
In a small print that was present in the bottom of the commercial it was stated that “using starch
baking and pasta baking tested by third party laboratory with Finish tablet present in the market

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as of 2017 November.” The court after watching the commercial 3 times and the laboratory
report rejected the injunction that was sought by Reckitt Benckiser Australia stating that there
was no “prima facie case established of contravening conduct” and hence Procter and Gamble
Australia was not found to be taking part in any deceptive or misleading conduct.
Critical Review
The first issue that can be seen to be present in the case is what was being claimed
in the commercial or in other words what impression did the commercial make. In answering the
first issue it was found by the court that it was represented in the commercial of Procter and
Gamble the Fairy Dishwasher Tablets are proven to better at “cleaning stuck on food on the first
wash”. The second issue that arises in the case is whether the claim has been misleading or
deceptive. In answering the second issue it had to be considered by the court if the commercial of
Procter and Gamble can be seen as deceptive or misleading while representing that Fairy
dishwasher tablets have been better than the Finish dishwasher tablets. Further the mislead or
deception of a conduct can be seen as a question of facts and needs to be decided in relation to
the evidences of every relevant facts and circumstances surrounding the case that had been put
before the court. Evidence had been provided by Procter and Gamble Australia from an
individual testing laboratory. The report of the laboratory claimed to indicate that Fairy
dishwasher tablets were in overall better in performance for cleaning than the Finish dishwasher
tablets. There was no contradicting evidence that could be provided by Reckitt Benckiser
Australia and hence it was held by the court that there was no “prima facie case established of
contravening conduct”.

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In the case it can be seen that the two issues that were raised by Reckitt Benckiser
Australia against Procter and Gamble Australia were under the provisions of the sections 18 &
33 of the Australian Consumer Law under the Competition and Consumer Act 2010. It is
provided in the section 18 of the Australian Consumer Law that no person should be engaging in
any kind of conduct in trade or commerce that is deceptive or misleading. In the provisions of
section 33 of the Australian Consumer Law it has been prohibited to be misleading the public
relating to nature, characteristics or quality of goods. However in this case a third party
laboratory report was presented by the Procter and Gamble Australia which indicated that the
Fairy dishwasher tablets were better at cleaning than the Finish dishwasher tablets of Reckitt
Benckiser Australia. This report was accepted by the court. The court found out by viewing the
advertisement and the reports presented by Procter and Gamble Australia. There was no
contradicting evidence presented by Reckitt Benckiser Australia.
In this case finding out if the advertisement was deceptive or misleading contravening the
Australian Consumer Law under the schedule 2 of the Competition and Consumer Act 2010 the
court took the dominant message and overall impression that was being presented in the
advertisement. Further it is seen that the court was relying on the scientific testing report of the
product for the substantiation of the claim since there was no other contradictory evidence
present. There was no evidence for the contravention of the provisions of Australian Consumer
Law.
Conclusion
It can be said in conclusion that the case discussed in the essay had two main issues. The
first issue that can be seen to be present in the case is what was being claimed in the commercial

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or in other words what impression did the commercial make. The second issue that arises in the
case is whether the claim has been misleading or deceptive. In answering the first issue it was
found by the court that it was represented in the commercial of Procter and Gamble the Fairy
Dishwasher Tablets are proven to better at “cleaning stuck on food on the first wash”. In
answering the second issue it had to be considered by the court if the commercial of Procter and
Gamble can be seen as deceptive or misleading while representing that Fairy dishwasher tablets
have been better than the Finish dishwasher tablets. Further the mislead or deception of a
conduct can be seen as a question of facts and needs to be decided in relation to the evidences of
every relevant facts and circumstances surrounding the case that had been put before the court.
In this case finding out if the advertisement was deceptive or misleading contravening the
Australian Consumer Law the court took the dominant message and overall impression that was
being presented in the advertisement. Further it is seen that the court was relying on the scientific
testing report of the product for the substantiation of the claim since there was no other
contradictory evidence present. Thus it is seen that Procter and Gamble was successful in
resisting interlocutory applications by substantiating representations made in its advertisement.

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Reference
Australian Competition and Consumer Commission. (2019). Consumer rights & guarantees.
Retrieved from https://www.accc.gov.au/consumers/consumer-rights-guarantees
Competition and Consumer Act 2010
Competition, A., 2014. Consumer product safety online. ACCC: Canberra, Australia.
Consumerlaw.gov.au. (2019). Legislation – Australian Consumer Law. Retrieved from
http://consumerlaw.gov.au/the-australian-consumer-law/legislation/
Kariyawasam, K. and Wigley, S., 2017. Online shopping, misleading advertising and consumer
protection. Information & Communications Technology Law, 26(2), pp.73-89.
Orton, F., Nelson, T., Pierce, M. and Chappel, T., 2017. Access Rights and Consumer
Protections in a Distributed Energy System. In Innovation and Disruption at the Grid's Edge (pp.
261-285). Academic Press.
Reckitt Benckiser (Australia) Pty Ltd v Procter & Gamble Australia Pty Ltd [2018] FCA 378
Reckitt Benckiser (Australia) Pty Ltd v Procter & Gamble Australia Pty Ltd [2015] FCA 753
Scott, C., 2018. Enforcing consumer protection laws. In Handbook of Research on International
Consumer Law, Second Edition. Edward Elgar Publishing.
Trade Practices Act 1974

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