The Community Network sells digital advertising services to small businesses throughout Australia, with the advertising presented on branded LCD screens at various sites such as fitness centres, newsagencies, and shopping centres.
The Australian Competition and Consumer Commission (ACCC) instituted court action last November against Multimedia International Services, trading as The Community Network.
The Federal Court declared that in its dealings with the small business The Community Network had refused to release it from its contract for advertising services when the company was not providing those advertising services - then pursuing the business for non-payment, threatening legal action and engaging debt collectors.
The ACCC has accepted a court enforceable undertaking from The Community Network to resolve the its concerns about the standard form contract used by the company, which included an automatic renewal term. The ACCC said it was concerned this term had “the potential to be misleading or deceptive to prospective advertisers”.
“Unconscionable conduct is a priority area for the ACCC, particularly where it affects small businesses.
“The ACCC brought these proceedings because it had received numerous complaints from small businesses that The Community Network was requiring payments to be continued under its contracts, despite not providing the digital advertising services promised. Some small businesses had also complained that they were misled by the failure to clearly disclose the effect of an automatic renewal term.”
Dr Schaper said the Community Network case was important “because it makes it clear that businesses like The Community Network must comply with the Australian Consumer Law in their dealings with small businesses. The ACCC will continue to take appropriate enforcement action to protect small businesses.”