Watchdog unleashed: businesses already bitten over carbon price claims
In what should be a warning to others, the Australian Competition and Consumer Commission ("ACCC") has already obtained undertakings from two solar companies for allegedly misleading claims in relation to the effect of the carbon price on electricity costs.
Polaris Solar and ACT Renewable Energy produced and distributed leaflets promoting the sale of solar panels by claiming that electricity prices would increase by 20% due to the introduction of the carbon price alone, and that by 2019 electricity prices would increase by over 400%. The leaflets also represented that the figures were based on independent studies, when they were actually based on unverified claims taken from a newspaper advertisement.
Last month, we produced an article in addition to an article written late last year, where we discussed the need for businesses to be careful when making claims about the impact of the carbon price on their business and their pricing, and the potential for misleading claims to breach the Australian Consumer Law. The ACCC has been directed by the Australian government to undertake a compliance and enforcement role in relation to such claims.
This case highlights the need for businesses to use caution when relying on third party information as the basis for their claims.
The ACCC is also investigating a communication sent by bakery franchise Brumby's to its franchisees, advising franchisees to use the carbon price as an excuse for raising prices. Businesses are not prohibited from raising prices, but any claims that price rises are due to the impact of the carbon price must be truthful and have a reasonable basis.
No doubt these are not the only businesses on the ACCC's radar. Don't be next in line - ensure that any claims your business makes, or advises others to make, are accurate and have been carefully considered. If you have any further questions in relation to communicating the impact of the carbon price on your business, or compliance with the Australian Consumer Law, please contact:
Michael Sutton | Senior Associate
T +61 2 8233 9587
F +61 2 8233 9555
Scott Sloan | Partner
T +61 2 8233 9554
F +61 2 8233 9555
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