Unfair trading practices consultation commenced

On August 31, 2023 Policy and Regulation

The Government has today commenced consultation on potential options to address unfair trading practices. The paper is seeking to identify any unfair trading practices in Australia, which give rise to consumer or small business harm, and which would not already be covered by existing consumer laws.

In addition to seeking to identify whether there is a problem and if so, the extent of it, the paper also puts forward 4 broad options to address any perceived harmful practices, for consideration:

  • Option 1 – Status quo
  • Option 2 – Amend statutory unconscionable conduct.
  • Option 3 – Introduce a general prohibition on unfair trading practices.
  • Option 4 – Introduce a combination of general and specific prohibitions on unfair trading practices.

The paper includes the following examples of potentially unfair trading practices:

  • Inducing consumer consent or agreement to data collection through concealed data practices;
  • Exploiting bargaining power imbalances in supply chain arrangements, including by unilaterally varying supply terms at short notice;
  • Omitting or obfuscating material information which distorts consumers’ expectations or understanding of the product or service being offered;
  • Using opaque data‑driven targeting or other interface design strategies to undermine consumer autonomy;
  • Exploiting or ignoring the behavioural vulnerabilities of consumers that are present in the ‘choice architecture’ of products or services (digital or otherwise);
  • Adopting business practices or designing a product or service in a way that dissuades a consumer from exercising their contractual or other legal rights;
  • Non‑disclosure of contract terms including financial obligations (at least until after the contract is entered into);
  • All or nothing ‘clickwrap’ consents that result in harmful and excessive tracking, collection and use of data, and don’t provide consumers with meaningful control of the collection and use of their data; and
  • Providing ineffective and/or complex disclosures of key information when obtaining consent or agreement to enter into contracts.

Submissions are being accepted until 29 November 2023.  IAB will take a closer look at the detail of the paper and provide any further information over the coming weeks.