Launch of “Fair Game or Fair Go”
Prof Allan Fels
Friday 9 July 1999
Melbourne
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Ladies and Gentlemen,
I would like to welcome you to this morning’s launch of the ACCC’s new publication, Fair
Game or Fair Go. I’m particularly pleased to be able to introduce to you Mr John Martin,
our recently appointed Small Business Commissioner. John will have a few words to say
about his new role shortly.
The ACCC has always had an important role in relation to small business. Many of its
actions in enforcing the Trade Practices Act bring benefits to small business, for example,
very often the customer most damaged by a price fixing agreement or abusive market power
or anticompetitive merger is a small business. The ACCC is also required to make
administrative decisions under the Act from time to time which often benefit small business,
such as the recent announcement I made that the ACCC have decided to reject Telstra’s
proposed charges to other carriers for interconnecting to its network to provide international
and national long distance calls.
So what is the purpose of the Trade Practices Act? Well, the stated aim of the Act is to
enhance the welfare of Australians through the promotion of competition and fair trading and
consumer protection.
In particular it focuses on:
 unfair prices
 the abuse of market power; and
 the violation of consumer rights for the whole of Australia.
The role of the ACCC is to apply the Trade Practices Act properly, without fear or favour to
anyone, no matter how powerful economically or politically, for the benefit of consumers of
all kinds everywhere in Australia, including household consumers; small, medium and big
business; farmers; local, state and federal governments; and all people everywhere, in
capital cities, country towns and farms. All have an interest in being supplied competitively
and efficiently at low prices with good service; and where they sell, to sell to buyers who
have to compete for their output.
The Commission’s approach in enforcing the Trade Practices Act is to educate the market
and promote dispute avoidance and resolution schemes where there is essentially a business
versus business dispute. However, where there is blatant disregard or systematic breaches of
the Act, then the Commission is willing to use its enforcement powers.
The Commission is always keen to ensure that it chooses the right enforcement tool to
achieve the Commission’s goals and objectives. In making this decision, the Commission
will take into account a series of factors, including the following:

blatant disregard of the law;

significant public detriment;

educative or deterrent effect;

new market issues; &

the need to test the reach of the Act.
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In choosing the appropriate method for enforcing a particular section of the Act, the
Commission will also need to take into account the aims of any enforcement action. The
sorts of aims that the Commission would normally be concerned about include the following:

stopping the unlawful conduct;

obtaining compensation/restitution for the victim;

undoing the effects of the contravention;

deterring/preventing unlawful conduct occurring/being repeated in future; &

punishing the wrongdoer.
In April last year, the Federal Government sent some very strong signals to the market place
through the enactment of the new unconscionable conduct provisions of the Trade Practices
Act, which is known as Section 51AC, along with the mandatory Franchising Code of
Conduct. The signals were that the Government expected the legislation to underpin cultural
change to bring an end to the type of exploitative conduct which was detailed in the Reid
Committee’s report into Fair Trading.
The Government has clearly anticipated a significant role for the ACCC in bringing about this
new business culture, by both education and enforcement of the Act’s new provisions.
The ACCC’s Small Business Unit has liaised extensively with the small business
organisations and operators to raise awareness of the new protection afforded by the
amendments. It has supplemented its liaison by making over 220 presentations to small
business audiences since last July, and preparing over 150 articles for small business related
journals since late December last year. The ACCC also makes regular contact with peak,
national business organisations by direct consultation and collective roundtable discussion
through our Small Business Advisory Group which next meets on 19 July.
Indeed, the Act’s unconscionable conduct provisions are high on the agenda for that meeting.
The Commission has liaised closely with those areas of large business against which
historically, most allegations of unconscionable conduct have been made, such as retail
shopping centre management and the franchisors. To put this in context, in the first quarter
this year we had almost 3000 complaints and inquiries which merited further investigation by
staff. Of these 114 related to unconscionable conduct allegations which mostly came from
the retail tenancy and franchising sectors. We have had about 510 complaints or significant
inquiries on Section 51AC issues between late July last year and early June. Again, those
sectors seem to generate substantial concern.
The ACCC has taken steps to ameliorate this situation.
To assist large businesses to understand the new provisions, the ACCC prepared a new
compliance guide for larger businesses on unconscionable conduct, which was launched last
year. It was targetted at businesses which have the scale to establish internal behavioural and
compliance systems to reduce the chance of unconscionable actions towards smaller
businesses.
In regard to our enforcement role, the ACCC received in August last year, a Direction from
the then Minister for Customs & Consumer Affairs, Warren Truss. He directed the ACCC to
initiate, as soon as practicable after 1 July 1998, actions for the purpose, among others, to
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establish legal precedent under the new S.51AC on matters relevant to small business. It also
provided the Commission with $480,000 per year for four years to implement the Direction.
There has been some anxiety about this direction and how it affects the ACCC’s operations.
Accordingly I would like to clarify the Commission’s position.
The Ministerial Direction does not force the Commission to run a S.51AC case to conclusion
even though it could be better settled administratively. Nor does it require a case with little
merit to be run by the Commision. This would be totally against the Commission’s method of
operation. We do wish to clarify the law and will do so where the facts have legal merit and a
positive outcome may be achieved by litigation.
You may be aware that earlier this year, the ACCC filed in the Federal Court the first action
under the new s.51ac alleging that a landlord of a food plaza engaged in unconscionable
conduct towards one of its tenants.
The ACCC alleges that Leelee Pty Ltd, the landlord of the Adelaide International Food Plaza,
acted unconscionably towards a tenant by:

increasing the rent contrary to the terms of the lease;

failing to act to protect the tenant’s rights under his lease; and

forcing the tenant to charge not less than a particular amount for certain food dishes
while allowing his competitors to charge less for their food dishes.
The ACCC is also taking action against Pua Hor Ong, the managing director of Leelee Pty
Ltd, for allegedly aiding or abetting or being knowingly concerned in the breaches.
The ACCC is seeking injunctions, declarations that the tenant has suffered loss or damage,
findings of facts, and orders for payment of damages.
Meanwhile, in June, the ACCC commenced proceedings against Simply No Knead
Franchising Pty Ltd in the Federal Court here in Melbourne.
This is the ACCC’s first action under section 51AC involving a franchisor and its first action
for alleged breaches of the Franchising Code of Conduct .
The ACCC alleges that Simply No Knead Franchising Pty Ltd, the franchisor, acted
unconscionably towards its franchisees by:

systematically refusing to negotiate reasonably and in good faith in relation to
reasonable requests and complaints from the franchisees;

refusing to supply its products to the franchisees;

failing to address reasonably and/or meet with the franchisees to discuss matters of
concern to the franchisees;

causing the telephone numbers of the franchisees’ franchised businesses to be deleted
from Telstra’s 013 telephone directory assistance service;

without the consent of the franchisees and contrary to the franchise agreements either
sold and/or offered to sell its products in the territories of each of the franchisees,
including supplying SNK products to a third party distributor and to various
independent outlets, promoting the availability of SNK products in such independent
outlets and advertising SNK’s mail order business with free delivery;
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
omitting the names of the franchisees from advertising and promotional material
distributed in respect of the franchised products;

failing and refusing to give to the franchisees a current disclosure document in the
form of annexure 1 to the Franchising Code of Conduct in response to written requests
from those franchisees; and

failing to disclose to the franchisees at any relevant time that it intended to cease the
franchising of the SNK business to the franchisees.
Among other allegations, the ACCC claims that SNK’s reliance on the restraint of trade
clauses to prevent the franchisees from selling equivalent products is unconscionable, in the
circumstances. As such the ACCC has sought an interlocutory injunction to stay the various
SNK proceedings until such time as the substantial case alleged by the ACCC is determined.
The interlocutory application is being heard in Court this morning.
The ACCC is also taking action against the director of Simply No Knead (Franchising) Pty
Ltd, for allegedly aiding and abetting or being knowingly concerned in the alleged breaches.
The ACCC is seeking declarations that the conduct as alleged constitutes breaches of sections
51AC and 51AD of the Act, injunctions and findings of fact.
I would now like to turn our attention to the subject of this morning’s launch, our new
publication titled Fair Game or Fair Go. This booklet has been written with the input of
industry groups from our Small Business Advisory Group network and reflects some of the
real life issues which have arisen in the course of the settling in of the new provision. We
took time to assess concerns raised by those contacting the Commission and used this
knowledge in crafting the booklet’s text.
This publication will assist small businesses who make enquiries with the ACCC about harsh
or unfair behaviour by larger parties, to gain a fuller understanding of whether or not they
have been the victim of unconscionable conduct within the meaning of the Trade Practices
Act. Importantly for those entering into business deals, Fair Game or Fair Go provides
practical advice on how to avoid problems in commercial relationships, and tips on
maintaining relationships and resolving differences. The booklet also sets out a checklist of
criteria to be considered when determining whether the new Section 51AC might have
application to a particular set of circumstances faced by a business operator.
Fair Game or Fair Go will be available free of charge from all ACCC State and Territory
Offices, and you are invited to take a supply with you today to distribute to your members and
clients as you see fit.
It gives me great pleasure to officially launch Fair Game or Fair Go.
I would now like to introduce our new Small Business Commissioner, John Martin. John
was formerley the Executive Director of the Australian Chamber of Commerce and Industry,
where he was responsible for making representations to Government on business regulation
policies, particularly as they affected small and medium enterprises. Prior to that, he held
positions in the Department of Industry, Technology and Commerce, the Department of the
Treasury, the United Nations and the Papua New Guinea Administration.
The Government recently appointed John to take special responsibility for small business
issues dealt with by the Commission, and it is pleasing to have someone with John’s
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background adding to our efforts in this area. I now invite John to come forward to say a few
words about his role.
Following that, we will be available to answer any questions you may have.
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