About Jeannie Marie Paterson

Dr Jeannie Marie Paterson is a Senior Lecturer at Melbourne Law school. She specialises in contract law, consumer law and consumer credit law. Jeannie also practises as a legal consultant in consumer law matters. Jeannie’s current research focuses on the protection of vulnerable and disadvantaged consumers. Jeannie’s recent publications include Principles of Contract Law (with Andrew Robertson and Arlen Duke, 4th ed, Thomson, 2012), Contract: Cases and Materials (with Andrew Robertson and Arlen Duke, 13th ed, Thomson, 2012) and Unfair Contract Terms in Australia (Thomson, 2012).

Fine Print Disclaimers May Not Protect Advertising from being Misleading: Australian Competition and Consumer Commission v TPG Internet Pty Ltd

By Dr Jeannie Marie Paterson and Veronica Wong

ACCC v TPG Internet Pty Ltd Case Page

Section 18 of the Australian Consumer Law (previously s 52 of the Trade Practices Act 1974 (Cth)) contains a broad ranging prohibition on conduct that is misleading or deceptive or likely to mislead or deceive. Misleading conduct in advertisements by traders causes harm by distorting the purchasing choices of consumers. This may reduce competition in the market by leading consumers to favour products that don’t have the features that are promoted. It may also increase costs for consumers, incurred either by entering into contracts that are not in their best interests or by incurring search costs that are wasted when they discover that the product does not exist as represented.

In Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54, the High Court confirmed importance of s 18 in protecting consumer interests by holding that so-called ‘headline’ advertising may be misleading notwithstanding the existence of a fine print disclaimer qualifying the representations in the headline statement.

The High Court also confirmed that deterrence should play a ‘primary’ role in setting the appropriate penalty to be imposed on a trader for a contravention of s 18. Specifically, the court should consider the need to deter offending conduct and any penalty imposed should be significant enough that it is not merely a cost of doing business. A majority of the High Court (French CJ, Crennan, Bell and Keane JJ; Gageler J dissenting) held that the Full Federal Court erred in setting aside the findings of primary judge and restored the pecuniary penalty of $2 million.

The decision of the High Court in TPG shows that whether an advertisement is misleading contrary to s 18 of the ACL should, as the words of the section suggest, be assessed by reference to the impressions conveyed by the advertisement in the circumstances in which it is delivered, and not merely by reference to the existence of technically correct information available to those consumers who choose to look for it or by reference to the presumed background knowledge of consumers. This approach, combined with the recognition that the penalty for contravention of s 18 is aimed at genuine deterrence of the offending behavior, is entirely consistent with the consumer protection purposes of the legislation. Continue reading

Google Searches and Misleading Conduct: Google Inc v Australian Competition and Consumer Commission

By Sarah Mulcahy and Jeannie Marie Paterson

Google v ACCC Case Page

In Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 the High Court held that Google had not engaged in misleading or deceptive conduct contrary to s 52 Trade Practices Act 1974 (Cth) (TPA) (now s 18 of the Australian Consumer Law (ACL)) in publishing ‘sponsored links’ in response to web page searches. The Australian Competition and Consumer Commission (ACCC) argued that Google engaged in misleading and deceptive conduct because its program allowed advertisers to enter the names of competitors as keywords so that a ‘sponsored link’ to the advertiser’s company would arise when the competitor’s name was entered into the search engine. Although the ‘sponsored links’ by the advertisers were misleading or deceptive, Google was held not to be responsible for the misleading or deceptive conduct because it did not author the ‘sponsored links’, nor did it endorse the misleading representations of the advertisers.

However, the decision does not relieve those who control or administer internet sites of liability for misleading or deceptive information posted on those sites. In this case, the links were generated by a computer algorithm over which Google had limited control. But in other situations where an administrator has greater control, it is possible that the administrator may still be liable for the misleading or deceptive conduct of posters or advertisers. Continue reading

Casino Not Liable for Bets Made by Problem Gambler: Kakavas v Crown Melbourne Ltd

By Jeannie Marie Paterson and James Ryan

Kakavas v Crown Melbourne Ltd Case Page

Issues of gambling, the responsibilities of gaming venues and the regulation of problem gambling have been prominent in recent political debate. Kakavas v Crown [2013] HCA 25 concerned the claim by a so-called ‘high roller’ gambler, Harry Kakavas, to $20 million dollars while gambling at Crown Casino in Melbourne between 2004–06. Kakavas claimed this amount on the basis that Crown had engaged in ‘unconscionable conduct’. Unconscionable dealing is a concept based in equity and given statutory force under s 20 of the Australian Consumer Law (Cth) (previously s 51AA of the Trade Practices Act 1974 (Cth)). As explained by Justice Mason in Commercial Bank of Australia Ltd v Amadio [1983] HCA 14, the equitable doctrine of unconscionable dealing will set aside a transaction:

whenever one party by reason of some condition or circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created.

Kakavas was seeking to ‘set aside’ his decision to gamble $20 million with the result that the money he had gambled would be returned to him.

Kakavas’ claim failed for two reasons. First, the High Court doubted that Kakavas suffered from a ‘special disability’ in the sense required to make out unconscionable conduct. Secondly, even Kakavas did suffer from a special disability, the High Court found that Crown did not actually know of it at the time when the allegedly unconscionable conduct took place. Critically, the High Court said that a trader in the position of Crown had to have actual knowledge of the disadvantage of a problem gambler such as Kakavas. Continue reading