Online sellers operating in Australia are subject to strict obligations under the Australian Consumer Law (ACL). These obligations apply regardless of business size or whether sales are conducted through independent websites, online marketplaces, or social media platforms.
Failure to comply with consumer protection requirements may expose businesses to regulatory action, financial penalties, and reputational damage.
Misleading or Deceptive Conduct
One of the most common breaches of the ACL involves misleading or deceptive conduct. Section 19 of the ACL prohibits conduct in trade or commerce that is misleading or deceptive or likely to mislead or deceive, whether intentionally or otherwise.
Examples include:
• False or exaggerated product claims
• Misleading pricing or discount representations
• Incorrect statements about product origin or quality
• Inaccurate testimonials or reviews
Businesses must ensure that all representations are accurate, substantiated, and presented clearly.
Breach of Consumer Guarantees
The ACL provides automatic consumer guarantees for goods and services. Online sellers cannot exclude or restrict these guarantees.
Common breaches include:
• Refusing refunds for faulty goods
• Failing to provide remedies for products not fit for purpose
• Delaying or denying repairs or replacements
• Misrepresenting consumer rights in refund policies
Consumer guarantees apply regardless of store policies or disclaimers and businesses must ensure that their refund policies and practices aligh with the consumer guarantess.
Unfair Contract Terms
Standard form online terms and conditions may be subject to unfair contract term provisions. Terms that create a significant imbalance in rights are not reasonably necessary, and cause consumer detriment may be declared void.
Examples include:
• Unilateral rights to cancel contracts
• Excessive limitation of liability clauses
• Broad discretion to change pricing or services without notice
Businesses should regularly review contractual terms to ensure compliance.
Pricing and Payment Violations
Pricing representations must be transparent and accurate. Common compliance issues include:
• Drip pricing practices
• Failure to disclose mandatory fees
• Incorrect strike-through pricing
• Misleading “limited time” offers
Clear and upfront pricing is a core requirement under the ACL.
Enforcement and Penalties
Regulatory authorities such as the Australian Competition and Consumer Commission (ACCC) have increased enforcement action against online businesses. Penalties for serious breaches may include substantial fines, court enforced undertakings, and adverse publicity orders.
Directors and officers may also be exposed to liability in certain circumstances.
Compliance Best Practices
Online sellers should adopt proactive compliance measures, including:
• Regular legal reviews of website content and policies
• Clear refund and returns processes
• Accurate marketing and advertising practices
• Staff training on consumer obligations
Legal compliance should be treated as an ongoing operational requirement.
Conclusion
Compliance with the Australian Consumer Law is essential for online sellers operating in Australia. Understanding common violations and implementing appropriate safeguards can reduce legal risk and support sustainable business growth. Businesses facing compliance concerns should consider obtaining legal advice tailored to their operations.
If you would like assistance with your compliance obligations under the ACL, get in touch with us.