Should Australia Introduce a Prohibition on Unfair Trading? Responding to Exploitative Business Systems in Person and On
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Should Australia Introduce a Prohibition on Unfair Trading? Responding to Exploitative Business Systems in Person and Online J. M. Paterson 1
& E. Bant
2
Received: 10 March 2020 / Accepted: 16 July 2020/ # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract
Australian consumer protection law contains broad and flexible prohibitions on misleading and unconscionable conduct in trade or commerce. Yet concerns have been raised that these prohibitions are unsuitable for responding to predatory business systems. These are businesses that, by design or operation, target consumers experiencing vulnerability to offer costly products ill-suited to their needs. This concern has arisen in response to prominent instances of products of dubious efficacy offered to marginalized communities. It has also arisen from concerns over the increasing potential for data-driven digital marketing to manipulate consumer choice by targeting with fine-grained accuracy consumer vulnerabilities. In response to these concerns, it has been suggested that the Australian Consumer Law should be reformed, by introducing a prohibition on “unfair trading” inspired by the general prohibitions on such conduct in the EU and USA. This paper explores the key considerations relevant in assessing the merits of this proposed statutory “transplant.” Ultimately, the paper is supportive of the proposed reform, while also recognizing its limits. Keywords Unfair commercial practices . Unfair trading . Unconscionable conduct . Unfair business systems . Disadvantaged communities . Digital manipulation . Regulatory design Australian consumer protection law is replete with principles-based prohibitions on conduct that offends community values and disrupts the fair and efficient operation of the market. In This article is part of an Australian Research Council funded project DP180100932 on coherence in the general prohibition on misleading conduct in the Australian Consumer Law. Research assistance provided by Yi Tung and Calvin Collins, JD Candidates, Melbourne Law School. Errors are our own.
* J. M. Paterson [email protected] E. Bant [email protected]
1
Melbourne Law School, The University of Melbourne, Melbourne, Australia
2
Law School, University of Western Australia, Perth, Australia
J. M. Paterson, E. Bant
particular, the key statutory regime, the Australian Consumer Law (ACL), contains opentextured prohibitions on misleading and unconscionable conduct in “trade or commerce” (ACL, Section 18 and Sections 21 and 22), as well as regulatory powers to respond to unfair contract terms (ACL, Parts 2–3). These prohibitions are accompanied by a swathe of specific rules governing particular kinds of conduct thought to be prejudicial to consumers. It has nonetheless been suggested that the ACL should be amended to introduce a prohibition on “unfair trading” based on the general prohibitions in the European Union’s Directive on Unfair Commercial Practices (Directive 2005/29/EC) Article 5 or the United States’ Federal Trade Commis
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