Competition & consumer law: your rights & responsibilities
Under Australian competition and consumer laws, small businesses have a number of rights and obligations when dealing with their customers and other businesses. It is important for you, as a small business, to understand how to trade fairly and do the right thing by customers.
It is essential you know about Australia’s Competition and Consumer Act 2010 (CCA). This act’s purpose is to enhance the welfare of Australians by promoting fair trading and competition. The Australian Consumer Law (ACL) is part of the CCA and covers misleading or deceptive conduct, unconscionable conduct, product safety, and refunds and returns.
Some of these issues will be more relevant to small businesses than others. When dealing with customers, suppliers and competitors, a practical understanding of how a small business can meet its obligations and protect itself in these areas will help in the long run – for example, knowing when you must give a refund or what can and can’t be said in advertisements.
Understanding consumer law will help you to know when you must give a refund or what you can or can’t say in advertisements.
The Australian Competition and Consumer Commission (ACCC) encourages compliance with the law and enforces the CCA.
The ACCC has a number of resources available to help small businesses comply with the CCA:
- The ACCC offers a free online education program for small businesses, which includes 10 modules covering topics such as pricing, advertising, consumer rights, selling safe products, unlawful competition and scams. Most modules also include a quiz where users can test their understanding of the information (www.ccaeducationprograms.org).
- The Small business and the Competition and Consumer Act: your rights and responsibilities publication is a handy reference guide to help small businesses understand their rights and obligations under the CCA (www.accc.gov.au/publications).
- The Small business self-assessment checklist is designed to help small businesses identify which parts of the ACL are relevant to their business activities (www.accc.gov.au/publications).
Planning to buy a franchise?
Some people may be considering purchasing a franchise. Becoming a franchisee is a big investment and usually involves a substantial upfront payment, followed by ongoing fees, royalties and other expenses. When considering the purchase of a franchise, due diligence is vital and it is important to review closely the disclosure document franchisors must provide.
The ACCC is responsible for the enforcement of the Franchising Code of Conduct and has the power to investigate and prosecute breaches. The ACCC also has a responsibility to educate the sector and ensure that both potential and existing franchise participants are aware of their rights and obligations under the code.
These resources are available to help those thinking about buying a franchise:
- A free online education program is available to help prospective franchisees assess franchise opportunities. The program is delivered by Griffith University and sponsored by the ACCC (www.ccaeducationprograms.org).
- The franchisee manual looks at what franchising is, steps to take before choosing a franchise, and important information about franchise agreements (www.accc.gov.au/publications).
For more information about small-business obligations and protections under the CCA or franchising, visit the ACCC website, look through the ACCC’s publications or call the ACCC’s Small Business Helpline on 1300 302 021.