E-Commerce Update October 2007 - Cases
05 November 2007Federal Court refuses to grant ACCC an interlocutory injunction against StoresOnline
On 5 October 2007, the Australian Competition and Consumer Commission (ACCC) commenced proceedings in the Federal Court of Australia against StoresOnline International Inc and StoresOnline Inc (StoresOnline) for breaching its undertaking under section 87B of the Trade Practices Act 1974 to the ACCC. StoresOnline is located in the United States. In the ex parte hearing, Justice Tamberlin made orders concerning the service of originating process on StoresOnline.
The undertaking to the ACCC was made in April 2006 when the ACCC alleged that StoresOnline had engaged in misleading and deceptive conduct while selling and promoting its home business e-commerce software packages. According to the ACCC, StoresOnline breached this undertaking on several occasions while conducting further presentations in Australia from October 2006, following the settlement of the earlier proceedings.
On 16 October 2007, the Federal Court declined the ACCC’s application for an interlocutory injunction restraining StoresOnline from conducting further presentations to sell and promote their home business e-commerce software packages.
Justice Tamberlin found that StoresOnline had breached section 87B of the Trade Practices Act 1974 by failing to make known the three business day cooling off period to consumers and by providing written disclaimers that were ‘manifestly inadequate’.
According to Justice Tamberlin, ’While the breaches of the undertaking by StoresOnline do not warrant a blanket order restraining StoresOnline from making any presentations in Australia, I am persuaded that the most appropriate course is to make orders requiring StoresOnline to give effect to the undertaking to which it made a commitment on 24 April 2006, until further order.’
It is anticipated that the matter will proceed to a final hearing where the ACCC will seek:
- a range of injunctions to ensure that StoresOnline complies with the undertaking in the future
- a declaration that StoresOnline has contravened section 87B of the Trade Practices Act 1974
- an order that StoresOnline pay to the Commonwealth an amount up to the equivalent of any financial benefit that it directly or indirectly gained from its breach of the undertaking, and
- a compensation order requiring StoresOnline to compensate any other person who has suffered loss or damage due to its breach of the undertaking.
At the final hearing, Justice Tamberlin is expected to make a number of court orders to 'discourage StoresOnline, with the powerful sanction of contempt, from giving those presentations in a way that breaches its undertaking given to the ACCC.'
Further information is available via the ACCC website.
For more information please contact
Title : Special Counsel
Office : Sydney
Phone : +61 2 9225 5954
Fax : +61 2 9322 4000
Email : duncan.giles@freehills.com
