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Business news, business advice and information for Australian SMEs | SmartCompany

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    Victoria’s consumer watchdog has commenced legal action against a solar and wind energy business for failing to supply paid for goods and services.

    Consumer Affairs Victoria is alleging Ballarat-based Bailey Designed Engineering also provided people with goods which were not of an acceptable quality. 

    The business sells wind turbines and solar systems and has previously appeared in the Victorian Civil and Administrative Tribunal and was found guilty of similar allegations.

    Consumer Affairs Victoria is seeking orders which prevent the company from taking deposits or other payment until it supplies the promised items or services, as well as orders which restrain the company’s director, Mark Bailey, from aiding or abetting the company in such activities.

    The watchdog is also seeking that Bailey be disqualified from managing a corporation for three years.

    SmartCompany contacted Bailey Designed Engineering but received no response prior to publication.

    In online forums and review sites there are a number of comments from people who claim they haven’t received goods or services they’ve paid for. 

    In May last year Bailey Designed Engineering was ordered to pay Emma and Adam Ellis $12,900 by VCAT member Elisabeth Wentworth after goods they paid for were not of an acceptable quality and incurred a major failure.

    In August last year, local Ballarat newspaper The Courierreported the story of Bailey Designed Engineering customer, Bruce Bull, who said he had paid $28,500 in October 2011 to the company for a five kilowatt wind turbine, a solar panel and an off-grid batter bank and inverter.

    He alleges the system was not installed until almost June 2012 and does not function as he was told.

    “We ordered our system in October 2011 and were told delivery would take six to eight weeks. It wasn’t installed until June 2012 and it doesn’t do what he (Mr Bailey) said it would do,” Bull told The Courier.

    “Once there is any issue, he doesn’t want to hear from you again. If something breaks down or you ring up to complain about why things are taking so long, he ignores you. We want him shut down.” 

    At the time The Courier said it had spoken with seven other Bailey Designed Engineering customers who were also in disputes with the company.

    Hall and Wilcox partner Ben Hamilton told SmartCompany consumer guarantee laws say goods and services must be delivered in a “reasonable time”.

    “There is no prescribed time period which is classified as reasonable. You have to look at the nature of the goods, the nature of the business and the price you’re paying,” he says.

    “That is a challenge with the consumer guarantee, this concept of reasonableness. The goods also have to be of an acceptable quality, but similarly there are no strict rules for what is and isn’t acceptable.”

    Under Australian Consumer Law it is an offence to accept payment for goods or services and fail to provide them.

    Hamilton says fines for this conduct can be up to $1.1 million per breach for companies and $220,000 per breach for individuals.

    “There is generally a lot of activity in this area of the consumer guarantee provisions. There have been substantial fines for companies, particularly those which have misrepresented the rights of consumers in regards to refunds,” he says.

    Hamilton says if a business is in a position where it’s unable to provide paid-for goods or can’t fulfil a service, its responsibility is to contact the consumer as soon as possible.


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    A Sydney chef is in court after allegedly stabbing a hungry patron with a metal chicken skewer after he complained about the long wait for food.

    Chef Mati Rahman of Sydney’s Red Chilli restaurant in Lakemba is accused of stabbing customer Jamil Hossain, who complained after waiting more than an hour for his order.

    Hossain said in a TV interview played in court yesterday that he and his friends had been hungry when they arrived at the restaurant and inquired about why their meals hadn’t arrived after waiting for an hour, according to AAP.

    When asking about the wait, they were then allegedly told it would take another 30 to 45 minutes, to which one said “that’s too long”.

    A fight then broke out when Rahman got angry and ordered the customers out of the restaurant.

    “He said ‘get out or I’ll kill (you) one by one’,” Hossain says, as quoted by AAP.

    Outside the restaurant, Hossain was allegedly protecting his friend from being stabbed in the stomach with the metal skewer when he was speared in his left hand.

    The case first emerged in April last year after police were informed of the incident.

    The skewer was said at the time to have pierced the palm of Hossain and exited the other side, causing him to require eight stitches.

    Rahman was arrested and charged with reckless wounding.

    The chef has pleaded not guilty to the charge and says he was the one who was set upon as he prepared curries near a tandoori oven.

    Rahman says he repeatedly told the men to be patient, but he was approached by Hossain and another man while working alone in the kitchen and was then attacked with chairs and mops, according to AAP.

    The chef says Hossain sustained the injury from a sharp edge of the mop.

    Regardless of the outcome, the case demonstrates the need for good customer service skills in hospitality.

    Customer service expert and public speaker Martin Grunstein told SmartCompany the key to customer service when dealing with an unhappy customer at a restaurant is to empathise and let them know their complaint is being actioned.

    “The fundamentals to understand when people are complaining is they want to whinge, they want acknowledgment of their complaint and they want to know what you can and can’t do to fix the problem,” he says.

    “What causes things to escalate is the frustration with the response or if the customer is made to feel humiliated.”

    Grunstein says the customer isn’t necessarily always right, but they need to be made to feel as though they are.

    “As long as the customer doesn’t break any rules, it’s the customer’s right to be a pain in the neck. They can be wrong, but we have to treat them with respect and dignity,” he says.

    “In a situation where the customer complains about the steak being overdone or something like that, there is no point proving the customer wrong. It’s just going to make the customer angry.”

    Grunstein says staff need to take the complaint with a smile on their face, or the customer won’t return.

    “You need to manage the ego of the customer, rather than just solve the problem,” he says.

    “Acknowledge the inconvenience to the customer and then the front line staff have to try and solve the problem without humiliating the customer and that’s a skill which is rare. The customer needs to be able to walk away with their ego intact.”


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    A Chinese restaurant in Adelaide and two of its employees have been fined a hefty $100,000 for failing to maintain proper hygiene conditions, breaching the state’s food standards code.

    The Adelaide Magistrate’s Court heard the Imperial Peking restaurant had cockroaches and rodent droppings in the kitchen and food hadn’t been stored safely.

    The restaurant, owned by Mustwin Investments, pleaded guilty to 31 breaches of the code earlier this week.

    The restaurant’s manager, Joel Guan, and director, Di Huang, also plead guilty to six breaches.

    The company was fined a total of $104,000 plus costs.

    The court heard “only dumb luck” meant no one had fallen ill as a result of eating at the restaurant, according to The Advertiser.

    The breaches included failing to protect food from contamination, an inability to maintain restaurant cleanliness and a failure to eradicate and stop pests from living on the premises.

    Prosecutor Paul Kelly from the Eastern Health Authority said the restaurant had been the site of 12 unannounced inspections and eight complaint-based inspections, according to The Advertiser.

    “Based on the litany of failures by the defendant it’s fortunate that there were no serious illnesses as a result,” he says.

    The court also heard when the authorities tried to shut the restaurant down, the employees posted a sign saying it was because of a “gas leak”.

    Imperial Peking had been issued with 12 improvement notices since 2006, three warnings and a prohibition order in December 2012.

    Kelly said inspectors had seen cockroach faeces in the fridge, cockroaches in uncovered sugar. The pests were also said to have covered the benches, walls, floors and cooking equipment and food containers.

    FoodLegal managing principal Joe Lederman told SmartCompany a typical fine for a restaurant would be up to around $50,000.

    “There aren’t many which reach the $100,000 mark, in Victoria at least,” he says.

    “This is a substantial penalty, although not unheard of. They probably had some horrendous photos as evidence. For this type of penalty there would typically be rat droppings on the floor and a serious risk that people could get very sick.”

    Failure to avoid contamination was a major breach for Imperial Kingdom, and the court heard inspectors had found fish on top of a box of vegetables and uncovered chicken feet lying on the floor of the restaurant’s walk-in freezer.

    Lederman says the legislation can vary from state to state, but generally restaurants must adhere to the same conditions.

    “When you start a food business you don’t just register the name, you have to set up a food safety system, be registered as a food premises and demonstrate that the employees have sufficient food safety training. Like in the case of a liquor licence, there also needs to be someone responsible in the event something does go wrong,” he says.

    “The Food Act of each state can be different, but they say the same things. Council to council things can also be interpreted slightly differently… standards tend to be stricter in capital cities.”

    Lederman says businesses are generally given warnings before court action is commenced.

    “They will be warned to get their act together and then inspectors will come back after a week or two… Normally most governments give at least one warning and give the business time to clean itself up.”

    Lederman says prosecution of hygiene breaches can occur in ethnic restaurants because of a number of factors. 

    “It happens if they are popular, grow very quickly and need to cope with the large influx of additional customers when problems occur such as not buying enough fridges. The owner of the restaurant needs to invest more to address the food safety risks," he says.

    “When food is then stored unrefrigerated it attracts pests… it snowballs and gets worse.”

    In defence of its breaches, Imperial Kingdom argued cultural differences had been a factor.


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    Pharmaceutical company Pfizer Australia is under fire from the Australian Competition and Consumer Commission for alleged anti-competitive conduct.

    The ACCC has filed proceedings in the Federal Court alleging that Pfizer Australia engaged in misuse of its market power and exclusive dealing in relation to its supply of atorvastatin to pharmacies in contravention of the Competition and Consumer Act 2010.

    Atorvastatin is a cholesterol lowering pharmaceutical product, sold by Pfizer under the brand name Lipitor.

    The ACCC reports that for a number of years Lipitor was the highest selling prescription medicine under the Pharmaceutical Benefits Scheme.

    Pfizer had a patent protection for the drug until May 2012. Before that time it was prescribed to over one million Australians, with annual sales exceeding $700m, the ACCC said.

    The ACCC alleges that in early 2012, Pfizer offered “significant” discounts and the payment of rebates previously accrued on sales of Pfizer’s Lipitor, if pharmacies acquired a minimum volume of up to 12 months’ supply of Pfizer’s generic atorvastatin product.

    The ACCC alleges that the offers were first made prior to Pfizer’s loss of patent protection for atorvastatin, during which time other suppliers of generic medicines could not compete.

    ACCC chairman Rod Sims said in a statement that the ACCC alleges Pfizer engaged in this conduct for the purpose of deterring or preventing competitors from engaging in competitive conduct.

    “Deterring anti-competitive conduct is an ACCC enforcement priority because of the harm that it can cause to the competitive process and ultimately to consumers, particularly with such a widely used product,” he said.

    “This case also raises an important public interest issue regarding the conduct of a patent holder nearing the expiry of that patent and what constitutes permissible competitive conduct.”

    The ACCC is seeking pecuniary penalties, declarations and costs, with a directions hearing set for March 18 in the Federal Court, Sydney.

    Pfizer issued a statement to say it does “not ordinarily comment on matters that are before the Court”.

    “Pfizer believes strongly that the offers referred to by the ACCC were competitive. We will vigorously defend the proceedings. As the matter is before the court, it is inappropriate for us to comment further.”

    The news comes amid preparations for the federal government’s “root and branch” review of the competition law.

    Small Business Minister Bruce Billson issued a statement saying the federal government would “keep a close eye on the ACCC’s case against Pfizer for its alleged misuse of market power ahead of an independent ‘root and branch’ review of competition law”.

    “As part of the ‘root and branch’ review of competition law the independent panel will look at claims that the misuse of market power provision isn’t living up to the expectations that the law makers had at the time of its introduction,” the statement said.

    “As a government we have made it clear we want competition based on merit not on muscle and competition law and policy settings that ensure that efficient business, big and small can prosper.”

    The ACCC’s move to act against Pfizer Australia reflects similar action it took in late 2013 where it filed proceedings against Colgate, Cussons and Woolworths over an alleged laundry detergent cartel.

    The Pharmaceutical Society of Australia declined to comment on the case at this stage.


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    In a timely warning on Valentine’s Day, the Australian Competition and Consumer Commission is advising people on the search for love online not to fall for a scammer.

    The competition watchdog received 2770 reports of dating and romance scams in 2013, which was a 13.6% increase on 2012 figures.

    The amount of money lost also bumped up, rising by nearly $2 million to $25.3 million.

    Of those caught in a scam, over 400 people reported that they had lost over $10,000, with around 43% of people who came into contact with dating and romance scams losing money.

    This was one of the highest conversion rates of scams reported to the ACCC.

    ACCC deputy chair Delia Rickard told SmartCompany that the scammers are experts at preying on people’s vulnerabilities, citing one example of a victim losing over $500,000 last year, and another mortgaging their house.

    She says 64 victims lost over $100,000 to dating scams last year.

    “We all know happy couples who have met online and it is often how people connect these days,” she says.

    “People are hoping to fall in love so they are optimistic…but the scammers are very sophisticated in what they do.”

    Rickard says they will often research their victim’s interests so on a dating site they appear like a “perfect match”.

    “They will befriend them on other sites and spend months or years grooming them for the scam,” she says.

    “The victim thinks they have hit the jackpot with love and they will trust in the relationship.”

    Rickard says after a period of time, during which the relationship will likely have been taken off the dating site and into emails, webcam contact or phone calls, the scammer will strike.

    They could say they need money for an operation, for their child, or for a sick relative, and ask the victim to wire it over as this is a hard method of payment to trace.

    “They will have elaborate but realistic stories,” she says.

    Rickard says often people don’t want to believe the person is a scammer, even when police or investigators tell them this is the case.

    Rickard warns that these scams also pose a risk to personal safety, as the scammers are often connected to international criminal networks.

    If people are interested in using an online dating platform, Rickard says to run searches on the people you are communicating with.

    “Run a Google image search using any photos provided by someone you met online as they may have been used in various profiles and could be a stolen identity. It’s quick and easy and could save you time, money and heartache.”

    The ACCC also advises to keep a tight hold on personal information or photos, especially of a private nature, as this can lead to blackmail of victims.

    Romance and dating scams are just one of many the ACCC have warned against in recent times. In 2013 it highlighted that the “Yellow Pages scam” was back in action, with the ACCC finding small businesses were getting caught by scammers sending faxes claiming they were booking ads for a Yellow Pages directory.


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    The man who was charged with heading Australia’s last competition review has spoken out, saying the current review shouldn’t focus on sectors such as small business.

    In a speech yesterday at a forum in Sydney on the root and branch review of competition policy, Professor Fred Hilmer said the review needed to focus on policy, rather than solving the specific problems of small business, supermarkets or rural areas.

    Hilmer also criticised the review for lacking focus and focusing too much on small business.

    “I worry, as many people do, that small business is permeating this, and job growth in small business, it’s just not right, it’s not factual,” he says, as quoted by The Australian Financial Review.

    “If this becomes political and non-fact based then it will go the way of most inquiries. My other fear is that they don’t rush it through.”

    This will be the first review into competition policy since the Keating government initiated a review in 1993, which led to a national competition policy.

    Hilmer’s speech was part of the same forum where Business Council of Australia chief executive Jennifer Westacott said yesterday the review shouldn’t attack big business, including Coles and Woolworths.

    To adequately evaluate competition policy, Hilmer says more time is needed, as well as broader terms of reference.

    Hilmer also says the review should lead to better policies on job creation and new business.

    “This requires examining policies that create disincentives and barriers to entry, including licensing and registration, financing and employment restrictions and industrial relations as well as tax incentives,” he says, as quoted by The Australian Financial Review.

    Hilmer says the review shouldn’t act to serve a single interest group, whether it was an “industry seeking to use the competition framework to implicitly support the industry, small business or social service areas”.

    Hilmer, who is now the vice-chancellor of the University of NSW, has also called for the review to look into how competition policy impacts the health and education sectors, two areas which had not been part of the 1993 review. 

    The executive director of the Council of Small Business of Australia, Peter Strong, also spoke at the forum and says Hilmer’s comments in regards to small business were “old-fashioned”.

    “It’s from last century. He’s very respected, as he should be, but the world has moved on in a major way. Innovation and productivity is now driven by small business,” he says.

    “Productivity is currently under threat from competition policy. When there are lots of businesses, then there are lots of companies small business can supply to and this helps to boost innovation, driving new product development and processes.”

    When the market is a monopoly or duopoly, these companies are able to dictate what the smaller businesses do, Strong says.

    “Big businesses take advantage of the innovation of others, as they should, but when there are only a few companies they decide the product, the colour, when it turns up and its price. You don’t have a lot of options,” he says.

    “Small business must permeate the root and branch review. Big business is always well represented and what we’re seeing is small business finally getting the representation we need.”

    But Strong emphasises it’s not a war between big and small business.

    “Big businesses have money, lobbyists and plenty of time, so they will be represented. We believe they must be represented because we have to work well together,” he says.

    “We often have discussions with the BCA and we have been working with the banks.”


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    Telstra was victorious over rival Optus yesterday in the Victorian Supreme Court in a fight over Optus advertisements which Telstra deemed were “misleading”.

    The Optus television and internet promotions, which aired in January this year, claimed there is less than 1% difference in the mobile phone coverage offered by Telstra and Optus.

    The advertisements state there “isn’t much difference between us and Telstra”.

    Telstra argued in court the geographical difference was much larger, with Telstra covering 2.3 million square kilometres of Australia in comparison to the Optus coverage of about one million square kilometres.

    In response, Optus denied the wording of the advertisement was misleading, stating it was focused on the mobile reach to ‘Australians’ in terms of population coverage, not ‘Australia’ in a geographic sense.

    However, Justice James Elliott disagreed and said Optus had misled consumers with the claims.

    “Each of the representations was misleading or deceptive, or likely to mislead or deceive,” he said.

    The judge found that it was “irrefutable” that the dominant message of the advertisement was the focus on the geographic coverage of the Optus mobile network and the comparison with the Telstra mobile network.

    “This aspect of the advertisement provides the platform upon which Optus seeks to make it attractive to ‘switch’ and enter into the deals that are being offered,” the judge said.

    Optus will now have to remove any remaining advertisements, with compensation for Telstra to be determined at a later date.

    Optus vice president corporate and regulatory affairs David Epstein said while the company was “disappointed in the court’s ruling, Optus remains committed to the strength of our network”.

    “We have been consistent and transparent in how we communicate the less than 1% difference in the population reach of the Optus mobile network compared to Telstra’s, and these clear facts have not been in dispute,” he said.

    “Today’s battle has been about how you portray network reach, but what Telstra is really afraid of is a discussion on price.”

    Telstra said Optus had been “caught out misleading Australians by implying their geographic network coverage is similar to Telstra’s”.

    “We’re upfront about the extent of our network coverage because we know it’s an important consideration for anyone choosing a mobile plan.”

    Hall and Wilcox partner Sally Scott previously told SmartCompany businesses often think they’re protected from a misleading conduct claim if what they say or write in an ad is technically correct.

    “However, the Australian Consumer Law goes beyond express statements and considers the overall impression of the ad,” she said.

    “An express statement in an ad might be technically correct but if the overall impression of the ad is misleading, then a business can find itself falling foul of the Australian Consumer Law.”

    Scott says businesses need to consider the overall impression of any ad they create.

    “In this case, Optus is arguing that its ad specifically states that the percentages in the ad relate to population and that they are correct,” she said.

    “Telstra is not disputing this but is arguing that the overall impression of the ad is something quite different, being that the percentage relates to the geographical area.”


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    The Australian Competition and Consumer Commission has given its support to Australia Post to increase the prices of stamps for ordinary letter services from 60 to 70 cents.

    The consumer watchdog also agreed with Australia Post’s proposal to freeze the prize at 60 cents for Australian government concession card holders until 2017.

    ACCC chairman Rod Sims said the organisation was satisfied the price rise would not result in Australia Post over-recovering the efficient costs of providing monopoly letter services.

    “The ACCC found that there is increasing financial pressure on Australia Post’s letter services as a result of fewer letters being sent,” he said.

    He noted that Australia Post is currently not recovering its reserved services costs.

    “The magnitude of the under-recovery is such that even with the proposed price increase, Australia Post is unlikely to recover more than an efficient level of costs.”

    While the ACCC’s decision is not binding on Australia Post, its role in the matter was to inform the public about whether or not the proposed price increases might be more than necessary.

    Australia Post must also give written notice to the Minister for Communications of its intent to vary its rates of postage. The Minister will have 30 days to disprove the proposal, otherwise the prices will increase.

    When the price increase was first announced, Australia Post said it would be delivered as additional payments to Licensed Post Office operators.

    At the time Australia Post managing director and chief executive Ahmed Fahour said the “current stamp price no longer reflects the true cost of delivering each letter and stamp price increases have not kept up with inflation”.

    He said it was a “reluctant” but “necessary” move.

    It reported that letter volumes were down 6.4% to 231 million in 2012-13, part of a decline of around one billion items over the past five years. In 2007-08 letter volumes were around 4.6 billion, and the previous financial year they were at 3.6 billion. It delivers to 11.2 million addresses nationally.

    Post Office Agents Association Limited chief executive Ian Kerr told SmartCompany at the time that “in principle, POAAL supports Australia Post’s proposal to increase the basic stamp price from 60 to 70 cents”.

    Kerr said it would be beneficial for its members as it is linked to multiple additional payments they receive, and it will benefit them in terms of commission, as “they will get a greater commission on a 70 cent stamp than a 60 cent stamp”.

    Australia Post aims to increase the prices from March 31. The last increase for base price of a stamp was in 2010 when it increased from 55 cents to 60 cents.


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    Property spruikers have been warned they must be licensed to offer financial advice if they are targeting people with self-managed superannuation funds or suggesting people should establish their own funds to buy real estate.

    People who advise on direct property do not need to have an Australian Financial Services Licence, but people who make recommendations that involve SMSFs do need a licence as superannuation funds are considered financial products, Australian Securities and Investments Commission commissioner Greg Tanzer said.

    “We regard [recommendations to buy property through SMSFs] as investment advice and you need to be licensed and if you are not licensed we will come after you,” Tanzer said.

    Tanzer warned investors to be wary of property spruikers and ensure any advice they took was right for their circumstances.

    “Our message for investors is superannuation is a far too important investment in the future to be taken in by a glitzy promotion,” he said.

    The Australian Taxation Office, which regulates SMSFs, was also monitoring property transactions through the funds.

    Acting second commissioner Alison Lendon said the ATO was checking that the investment decisions SMSF trustees were making were aligned with their fund’s trust deeds and investment strategies.

    The ATO was also checking that property purchases met the sole purpose test, which requires superannuation assets to be acquired by the funds for the single intention of providing an income in retirement. It was also monitoring whether transactions were conducted at arms’ length to ensure properties were not being purchased from parties that were related to the trustees.

    This article first appeared on Property Observer.


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    Reporting requirements for gender equality in the workplace could be relaxed for small businesses as part of the Abbott government’s mission to slash $1 billion of red tape.

    Under a new system being considered by Employment Minister Eric Abetz, only companies with over 1000 staff members would need to provide detailed annual reports on gender balance, The Australian Financial Review reports.

    Under the Workplace Gender Equality Act 2012, businesses with over 100 staff are required to report around 30 core details to the Workplace Gender Equality Agency annually.

    These details include the ratio of men to women hired, their positions within the company and their remuneration.

    Even stricter minimum reporting standards are due to be set in place for 2014-15. However, under the review a number of these minimum requirements could be substantially reduced.

    A spokesperson for the Employment Minister told SmartCompany this morning the matter was being reviewed, but they could not reveal any further details of potential chances to the policy.

    “The Minister is required under legislation to make a regulation by April,” he said. “The government has consulted widely and is currently considering reform of the legislation.”

    The parliamentary secretary to the Prime Minister, Josh Frydenberg, in charge of the government’s push for deregulation, was contacted this morning for comment but no reply was available before publication.

    Business Council of Australia chief executive Jennifer Westacott said in a statement to SmartCompany the current system was a “costly, time consuming” exercise that provided “no useful comparison because the nature of each business is so different”.

    She said the proposed changes “benefit small and medium-sized businesses”.

    “The BCA and its members are passionate advocates for improving the representation of women at all levels within our businesses, particular in the senior ranks,” she said.

    “But the Workplace Gender Equality Act 2012 was always the wrong solution to the right problem, and the government’s proposed changes are very welcome.”

    Westacott said while the impact on larger businesses is “more modest”, the changes will reduce the compliance burden by no longer requiring companies to provide extremely detailed breakdowns of gender by occupational area.

    “In welcoming these proposed changes, we would encourage the government to go further in improving the legislation.”

    The news of reform comes as figures released last week from the Australian Bureau of Statistics show that, on average, full-time working women’s earnings are 17.1% less per week than full-time working men’s earnings.

    The gap was slightly lower than the August 2013 figure of 17.5%. It found that women’s earnings had increased at a slightly higher rate than men’s over the past 12 months – 3.5% compared to 3%.

    The Workplace Gender Equality Agency reports the gender pay gap has hovered between 15% and 18% for around two decades, and is influenced by industrial and occupational segregation, a lack of women in leadership, the fact that women still do most of society’s unpaid caring, a lack of senior part-time and flexible roles, and direct or indirect discrimination.

    WGEA director Helen Conway said this persistent pay gap is both “concerning and frustrating”.

    “And sadly, there is a pay gap in favour of men in every single industry,” she said.

    “Some of the highest gender pay gaps are found in female-dominated industries including health care and social assistance and finance and insurance services.”


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    In a speech to economists and business leaders on Friday, Rod Sims, the head of the Australian Competition and Consumer Commission, outlined the regulator’s key priorities for 2014.

    Key concerns flagged by the chairman include the “drip pricing” strategy used by online retailers, which refers to the practice of luring customers with attractive prices only to hit them with additional charges when they begin to process a payment.

    Another focus for the ACCC is looking into whether energy retailers are misleading consumers with various discount claims in their promotion of energy plans.

    Melissa Monks, special counsel at law firm King & Wood Mallesons, told SmartCompany there was likely to be action by the ACCC in the energy sector.

    “We will definitely see litigation in relation to the savings ‘discounts off what?’ concerns, likely in the energy sector given the ACCC has been investigating this concern since at least June last year,” Monks said.

    Of particular interest to small business was the mention in Friday’s speech that the ACCC will go after large companies that pose as small businesses.

    The regulator also vowed to keep going after credence claims in the food industry.

    Sims said this refers to the ACCC’s actions in relation to companies that make misleading claims in relation to whether food is Australian made, organic or baked fresh.

    He also made mention of the role of government’s broad-ranging competition review and the focus on small business in the terms of reference.

    Sims told the audience: “We need to remember, however, that small businesses are an important driver of competition, innovation and economic growth. A core issue for the Review panel will be striking the balance between vigorous, competitive behaviour and exclusionary anti-competitive conduct.”


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    Victoria’s consumer watchdog has issued an alert to small business owners to be aware of conmen stealing businesses’ identities and ripping off consumers.

    Consumer Affairs Victoria has received multiple complaints against some men who adopted the identity of a Queensland roofing business to trick Victorian homeowners into paying them for subpar services.

    Strongguard Roofing was contacted earlier this month by a Melbourne man who had been scammed by a group of people purporting to be from the Queensland business.

    Director Warren Hebbard told SmartCompany Strongguard Roofing doesn’t do any business in Victoria.

    “The Melbourne man had originally checked our company website and went with them believing they were a trustworthy business, but when he realised they weren’t he contacted us via email and we chased it up,” Hebbard says.

    “We then got another email from a different home in the same area, so we contacted Consumer Affairs Victoria.”

    Consumer Affairs Victoria director Claire Noone said in a statement the conmen would knock on people’s doors spruiking their work and tell homeowners to check Strongguard Roofing’s website to verify their business credentials.

    “If they do any work, it’s likely to be shoddy and unfinished,” she says.

    Strongguard has since put up a warning on its website warning customers of the dodgy copycats.

    Hebbard says in one case a number of houses in a single street were targeted, with a group of eight conmen, possibly from Ireland, pretending to be from the company.

    “While we don’t do any business in Victoria, because of the internet this type of scam trashes our name,” he says.

    “It’s a pretty serious issue.”

    Consumer Affairs Victoria says the travelling conmen would offer a cheap deal for ‘today only’ to consumers on jobs such as painting, roof repairs and sealing bitumen driveways.

    The men would pressure the consumers to pay up front and then perform shoddy work or not finish the job.

    “They were going in cheap and unfortunately people often grab deals which look too good to be true,” Hebbard says.

    “Because we think these guys are from overseas they’ll be pretty hard to catch unless they’re caught on a job. If they’ve gotten away with a fair few houses they may change tact and adopt a new business identity.”

    Noone says it’s important for consumers to check a business’s credentials.

    “Look up the business’ contact details – don’t use the details the person provides – and call the business to ask if the person at your door represents the company,” she says.

    “There is a very real risk to your business’ reputation. Reports provide valuable intelligence to help us warn the community and stop conmen.”

    Hebbard says these conmen have a leaflet with their business name on it and a phone number which isn’t theirs.

    “They picked our business because we’re a known company, but maybe because we’re in Queensland they thought they’d get away with it,” he says.

    “To get these emails and see someone else is using our name, it was very disappointing. Blood, sweat and tears went into building the business and then someone comes along and just tries to trash our name.”


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    The Australian Competition and Consumer Commission is set to begin monitoring prices, costs and profits of businesses to assess the effect of the carbon tax scheme from March 1.

    The consumer watchdog was tasked with the job of making sure businesses pass on the savings of the carbon tax repeal in September last year, following the election of the Abbott government.

    At this stage the ACCC will focus on suppliers of regulated goods, namely natural gas, electricity and synthetic greenhouse gases, as well as businesses identified as liable entities under the Clean Energy Act.

    ACCC deputy chair Michael Schaper told SmartCompany other liable entities include some manufacturing, mining and LPG businesses.

    This means the ACCC will scrutinise around 400 companies in the coming months.

    "In the first instance we'll talk to those businesses and ask for information to be provided voluntarily," Schaper says.

    "We'll write to the 400 companies and give them some time to get the information together. It's essentially an information gathering exercises, it's not an expectation for a firm to adjust their prices, that will only come after the tax is ceased."

    Schaper says the ACCC will be seeking information on how businesses set their prices, the impact of the current scheme on prices and how the business went about determining the costs.

    Small Business Minister Bruce Billson said in a statement yesterday the ACCC’s aim will be to “establish a baseline price, ensuring that customers, both business and consumers, are not charged higher prices once the carbon tax is abolished by the federal government”.

    “That’s more money to help make ends meet and to bring down the cost of living for Australian families. Energy-dependent businesses will also benefit from reduced energy costs,” he says.

    In November last year, the House of Representatives passed a bill which gives the ACCC powers as part of the carbon tax repeal to monitor prices and to take action against businesses in key sectors that attempt to exploit other businesses and consumers by charging unreasonably high prices.

    The watchdog will also be able to pursue businesses that make false or misleading claims about the impact of the carbon tax repeal or scheme on the price of goods and services.

    However, the bill is yet to pass the Senate, so at this stage the ACCC will take on a monitoring role.

    ACCC chairman Rod Sims said in a statement the latest direction will allow the body to get a better idea of pricing practices in relevant industry sectors prior to the repeal taking place.

    “The ACCC is not setting prices. We are simply collecting information and monitoring the pricing practices of specific entities so we can fully understand the impact of the carbon tax both before and after the anticipated repeal,” Sims said.

    The repeal of the carbon tax was one of the Liberal Party’s key election promises.

    Billson says the removal of the tax is expected to boost the family budget by $550 a week.

    “It means that small businesses will no longer need to absorb the cost of the carbon tax, increasing their productivity and competitiveness and contributing to the country’s economic growth,” he says.

    “As part of the direction, the ACCC will be able to request information on the prices being charged by business.”

    The ACCC will be expected to report on its findings each quarter, starting from July this year.


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    A new chapter in the shopper docket saga is underway, with the Australian Competition and Consumer Commission launching proceedings in the Federal Court against Coles and Woolworths for an alleged breach of court enforceable undertakings.  

    The ACCC is calling into question whether the two supermarket giants are acting appropriately by allowing customers to bundle together shopper docket fuel discounts to increase the value of a discount to over the allowed 4 cents.

    In December last year, the ACCC accepted court enforceable undertakings from Coles and Woolworths to voluntarily limit fuel discounts that are linked to supermarket purchases to a maximum of 4 cents per litre.

    These undertakings took full effect on January 1 this year.

    The ACCC alleges Woolworths is breaching the undertaking with its current offer of a bundled discount of 8 cents per litre, combining a 4 cent discount docket from both the supermarket and petrol stations.

    For Coles, the ACCC alleges its offer of a bundled discount of 14 cents per litre, comprising dockets for 10 cents and 4 cent discounts, is a breach.

    ACCC chairman Rod Sims said after an “extensive investigation” the watchdog had been concerned fuel savings offers could have longer-term effects on the structure of the retail fuel markets.

    “We accepted the undertakings because they addressed the ACCC’s principal competition concerns and allowed the matter to be resolved quickly and efficiently,” he said.

    “It is pleasing that Coles and Woolworths advise that they are honouring their undertakings to fund all fuel discounts from their fuel operations, but we are concerned that the bundled discount offerings in excess of 4 cents per litre are contrary to the terms of the undertakings.”

    In a separate proceeding, Woolworths has sought a declaration in relation to a proposed future fuel discount offer. However, the ACCC also considers this would breach Woolworths’ undertaking.

    A statement from Woolworths said the company “remain disappointed that we have been curtailed from offering greater petrol discounts to our customers”. 

    “We have discussed with the ACCC making our discounts independent of each other, and this change is underway,” Woolworths said.

    “We believe our undertaking with the ACCC allows customers to combine offers of 4 cents from the supermarket and 4 cents from the petrol store to receive 8 cents a litre off their fuel.”

    Woolworths has asked the court to make a declaration that allowing customers to redeem both discounts at the same time is in accordance with the undertaking.

    Coles said it “vigorously defends” its ability to offer its customer great value on both groceries and fuel.

    “We welcome the opportunity to clarify conflicting interpretations of the voluntary undertaking on fuel discount dockets in court.”

    The Master Grocers Australia chief executive Jos de Bruin was pleased to see the ACCC take action, and called into question the degree to which the two retailers could be trusted.

    “It is extraordinary that Coles and Woolworths are accused of breaking their voluntary agreement with the ACCC less than three months after it was struck,” he said.

    “It is right that the ACCC launch this prosecution because it shows that these two companies – which are amongst the biggest in Australia – are not beyond the law.”

    De Bruin said the two business have “an unfortunate record of playing brinksmanship with the law and then, apparently, daring the regulator to take them on”.

    “It is pleasing to see that Rod Sims has, indeed, taken them on. But why do we need to spend more taxpayer dollars just to get two of Australia’s biggest companies to stick to a legal agreement?”

    He said fuel shopper dockets have been “devastating to our businesses” as they have dragged consumers away from the store network.

    A directions hearing for both supermarkets is set for April 4 in the Federal Court Sydney.


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    Dick Smith has lost the name rights to his version of the popular Australian spread Vegemite, as yesterday Intellectual Property Australia ruled OzEmite products must be pulled from sale.

    Adelaide small business AussieMite has emerged victorious from the legal battle which commenced in 2011, with IP Australia ruling OzEmite sounded too familiar and must be removed from sale.

    AussieMite founder Rodger Ramsay filed to have the OzEmite trademark removed in 2011. Last year, when the case hit the courts, Smith commented to Mumbrella  that he wouldn’t appear in court and he wouldn’t “spend one cent on lawyer”. At the time, he also said if he lost the case he’d just come up with a new name.

    The OzEmite trademark was registered in October 1999, but it wasn’t approved until 2003 and Smith didn’t launch the product until 2012.

    The AussieMite trademark was registered a few years later in 2001 and approved in 2006.

    Under Australian trademark laws the owner of a trademark has the obligation to use it within five years, or a third party is able to have it removed from the register.

    When Smith eventually launched the OzEmite product eight years after the trademark had been approved, Ramsay had already filed to have the trademark removed.

    IP Australia decided that because the OzEmite brand had not been used in the three years prior to 2011, the trademark should be removed.

    Principal trademark lawyer with Callinans, John Carroll, told SmartCompany the case was decided because the OzEmite trademark hadn’t been used, irrespective of the fact it was registered first.

    “There is a small caveat in the legislation that you can plead special circumstances and explain why the trademark hasn’t been used, but Dick Smith assumedly never ran such an argument,” Carroll says.

    “It’s simply a case where one trademark owner didn’t meet the requirements to show the trademark had been in use, while the other did.”

    In arguing against the removal of the OzEmite trademark, Smith had two possible defences – to say there had been barriers to using the trademark which prevented it from being used in the three years prior to the motion or to argue there were special circumstances which meant it should be maintained.

    Carroll says when the OzEmite trademark was first filed in 1999, two other applications were also made for the same trademark; however, they lapsed.

    “Kraft also tried to file for it back in July 1999 and a Mr Robert Telford also tried around the same time. These trademarks were not refused, but they did not complete the process and so they lapsed.”

    AussieMite has been sold in Australia and the United Kingdom since 2001 and is made from predominantly Australian ingredients.

    In response to the verdict, Rodger Ramsay posted a YouTube video about the trademark victory.

    “Having won that battle we’re now backed by IP Australia and the decision that our trademark AussieMite is the only true Australian product to be sold under that name,” Ramsay says.

    “He’s [Dick Smith] a multimillionaire and we’re not. We’re just workers with a small family Australian business.”

    Ramsay says he hopes this is the end of the lengthy legal battle.

    “We would hope he [Dick Smith] will respect the umpire’s decision, which has backed our brand,” he says.

    “We would like for it to grow and for it to be in every household within Australia.”


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    Anthony Nicholls, from Mitcham, Victoria will stand trial in the Victorian County Court next year for allegedly obtaining more than $2.6 million of funds from investors by deception in his role as director of Peton Properties and Zantholls International Pty Ltd between 2004 and 2006.

    In 2007, Peton Properties went into liquidation. It owed creditors more than $4 million.

    After a week-long committal hearing in the Melbourne Magistrates Court, 61 year old Nicholls has been told to stand trial on 11 May 2015, with the expected length of the trial being three months.

    Charged with 113 counts of breaching his duties as director, three counts of making false and misleading statements, 19 counts of obtaining a financial advantage by deception and one count of obtaining property by deception, he has pleaded not guilty. Each of the 113 charges carries a maximum penalty of five years jail, or a $220,000 fine, with each of the misleading and false statements carry 10 years jail or $495,000 in fines.

    About 20 people suffered losses, after investing $2.68 million with the companies. The money was going to be used to fund Ballarat developments, however ASIC alleges that the developments were unable to be developed in the manner nor in the timeframe described.

    They also allege that Nicholls authorised a $1,806,000 withdrawal from a Peton Properties bank account and a solicitors’ trust account for use for his own benefit and that of co-director Peter Scully, financial obligations of another related company The Key Result Pty Ltd and interest payments due to existing investors.

    The Key Result Pty Ltd trademarked the term “THE KEY RESULT UNLOCK YOUR FUTURE”. According to Consumer Action Law Centre, the company promoted a form of rent-to-buy arrangement that included a personal savings plan and budgeting service.

    key_result

    Logo for The Key Result Pty Ltd

    “As well as facilitating the entry of a prospective purchaser into a rent-to-buy arrangement with a third party investor, The Key Result Pty Ltd provided staff who would not only oversee the day-to-day spending of a prospective purchaser, but would in fact exclusively control his or her bank account,” Consumer Action notes.

    They note that many were placed in extreme financial hardship through the scheme, being forced to reduce spending to an extent to be able to afford rental and purchase option payments on properties they were unable to afford. The Key Result Pty Ltd is no longer operating.

    The Key Result Pty Ltd's director Peter Scully (aforementioned co-director of Peton Properties) was also director of Active Property Solutions Pty Ltd, and has seen Consumer Affairs Victoria allege that they brokered deals that the buyers could not afford, according to The Herald Sun back in 2008. The outcome of the case can be read here. The schemes, aimed at first time buyers, were advertised in the Gippsland and Doveton areas, as well as in the Geelong Advertiser newspaper.

    The court transcript suggests that advertisements read along the lines of:

    WHY ARE YOU PAYING RENT?

    $750pw net combined or single income gets you your own home at competitive rates

    As well as:

    DOES THIS SOUND LIKE YOU?

    First home buyer?

    Employed or Self Employed?

    Tired of Renting?

    Knocked back for finance?

    But desperately want to

    OWN YOUR OWN HOME?

    We can HELP with...

    LOW deposit finance

    Easy qualifying

    Bad credit history – No worries

    Want to know more? Ring NOW

    *Conditions apply

    This article first appeared on Property Observer.


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    Queensland police have arrested a bikie who allegedly stole a Western Australian investment company’s identity and stole $1.4 million from mum and dad investors.

    In the second case of business identity theft this week, 33-year-old Tyrone de Luca, said to be a member of the Black Uhlans bikie gang, was arrested yesterday for his involvement in the investment scheme.

    Police suspect another man with links to the Bandidos was also involved, but he is yet to be questioned.

    Investigators are alleging the men adopted the identity of the WA business, cloning its website and registering the name M6 Securities Group.

    The men are also said to have created a fake Perth business address and telephone number.

    Detective Inspector Phillip Stevens of Taskforce Maxima said at a press conference yesterday the perpetrators had also adopted the persona of the directors of the legitimate business and used a call centre to generate leads.

    “[They] have contacted potential victims, they have approached the victims and they have encouraged them to deposit money into a variety of investment schemes,” Stevens says.

    “In exchange for that investment they are given a user ID and password to a backend of the website where that backend is manipulated by someone involved in the crime to give the illusion they’re making a profit. At the end of the day they don’t make a profit and the money dissipates.”

    The call centre workers involved in the scam were said to be unaware the company was a front for a bikie operation.

    “The template for these things is that the people involved in the telemarketing or the cold call centres don't have an idea of the ultimate gain,” Stevens says.

    “Their role is simply to make contact and to pass it on to the people who will approach the victims.”

    Stevens says between 30 and 40 fake call centres are operating on the Gold Coast.

    Warfield and Associates chief executive Brett Warfield told SmartCompany business identity theft such as this is becoming easier to execute.

    “It’s harder than individual identity theft, but from what I’ve read, it’s been made easier by the internet,” he says.

    “People looking for investment options are now bypassing traditional sources of information like the newspaper and financial advisors and searching on the internet. It’s easy to establish an identity online which takes over from another organisation.”

    Warfield says with a “half decent IT specialist” skilled in online marketing, a legitimate-looking website can be created in a matter of months including links, Google Adwords and key word search terms.

    “It’s not hard to do… It can be done offshore. You don’t even need to have someone on the ground, it can be done from a desktop computer at your home and money can be transferred overseas,” he says.

    Warfield says the Queensland bikies would have taken the identity of a WA business strategically with the intent to deceive potential investors.

    “It would have been an attempt to separate the investor from the possibility of them doing background research,” he says

    “Anyone thinking of investing needs to do due diligence and some fundamental background research.”

    This latest scheme saw the union of two motorcycle gangs for the initiative, something which has become increasingly more common, Stevens says.

    “There seems to be no boundaries as to who they associate with. It seems to be becoming more common that criminal motor cycle gangs will do business with one another if it suits their purposes,” he says.

    This arrest is the first for the operation, but more are likely to come.

    “We have identified a number of companies linked to these fraudulent activities. The arrest of the male person is by no means the end of these investigations; it merely forms part of a great investigative strategy,” Stevens says.

    Warfield says as a blanket rule people should not invest with anyone on the basis of a cold call.

    “Number one you’ll be dealing with someone on the end of the phone with a script in front of them. They tend to talk over the top of the person, spruiking the product and how great it is and it catches people off guard. So don’t enter into the conversation.

    “Remember, if it’s too good to be true it probably is. If the market is paying X per cent and someone offers you three times that, realise there is a risk there.”


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    A Sydney-based online shirt retailer has received a strongly worded legal letter from global retail giant Richemont Group over the design of its website, MR SHIRTS.

    The start-up business has posted the letter from the luxury company on its website, in which it claims the new site is too similar in design and product offer to its menswear site, Mr Porter. Mr Porter is part of the hugely successful Net-A-Porter business.  

    MR SHIRTS owner Chris Buchanan pushed back with a letter to the group, declaring there was no intent to replicate the site, and that the design elements in dispute were largely universal to fashion sites.

    In the letter dated February 25, he highlighted that the business was just 12 weeks old, and that “we did not deliberately analyse, study or reproduce your design or website(s) as you assert”.

    He disputed Mr Porter’s claims the site had specific similarities, in that it “mimics the front page of a newspaper”, that “both use black fonts on white backgrounds” and that “both use centred heading with sign-in link and search box at top right”, listing a number of sites he felt had the same elements.

    Mr Porter’s letter said it was reaching out to give the chance for response, “rather than take immediate formal legal action”.

    Buchanan told SmartCompany this morning he was “shocked” to receive the letter, as his site was brand new, it had not done any search engine optimisation and it doesn’t yet rank highly in searches.

    “I was also flattered that they thought we were a threat,” he says.

    Buchanan says that when he developed his business his core focus was on the shirt range, not the design of his site. He says he commissioned a web designer with the brief to be on trend with design, but focus on best practice when it came to user experience.

    He says he didn’t think design in the digital sphere was subject to copyright in the same way as a book or a painting. He says the look is in line with global website trends – “pared back, clean, with black and white… easy on the eye and user friendly”.

    Buchanan is waiting to hear back from Mr Porter in response to his letter.

    An Australian spokesperson for Mr Porter told SmartCompany this morning that "The Richemont Group and MrPorter.com has no comment to make at this stage". 

    K&L Gates partner and intellectual property expert Jane Owen told SmartCompany the chance to claim a copyright infringement online is “probably a lot more limited than people think”.

    “The trick with intellectual property is that there are only so many boxes to tick,” she says.

    “With websites, copyright doesn’t protect (just) the look, and using black and white is not a copyright issue in itself.”

    “It is about having a substantial part of a whole of another website that could be a problem.”

    Owen explains that having the same colours or fonts also doesn’t mean copyright is infringed.

    “It has to be a substantial reproduction… it actually has to be copying.”

    Owen says as so many businesses are now using the same tool boxes (online design platforms) people can consciously or unconsciously be getting similar designs, as the sites all have a set array of design combinations available.

    “It is a fact of a crowded web world we live in,” she says.

    Owen says for small businesses hiring a third party to set up a website, they should ensure they have clear and simple terms and conditions and a warrant for indemnity for infringements.

    If using internal staff, she says to stress the policy that your business respects the intellectual property rights of others.

    Owen says if there is a competitor site in your industry that you admire, try to push the boundaries of creativity to ensure your site is clearly different, and not “me too”.

    “Also keep a track record of any intellectual property work created,” she says.


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    Cadbury and Nestle are at it again, embroiled in a legal dispute over the shape of Nestle’s Kit Kat chocolate bar.

    SmartCompany has previously reported on Nestle and Darrell Lea’s trademark dispute over Cadbury’s bid to trademark the colour purple.

    Now Cadbury has turned the tables on its Swiss rival and is opposing a similar attempt by Nestle to protect the shape of the Kit Kat.

    The dispute flared up after the UK 3D trademark registration for the shape of Nestle’s Kit Kat was accepted by the UK trademark registry on the basis the mark was in fact distinctive.

    Judge Richard Arnold in London has now referred the case to the European Union Court of Justice in Luxembourg for guidance on EU law.

    The judge has now handed down his decision in which he considered exactly how much recognition a shape mark must have in order to be registered as a trademark.

    Bill Ladas, special counsel at King & Wood Mallesons, told SmartCompany under Australian law the requirement is that a trademark in fact distinguished the goods as at the date of the application, through the use made of it.

    However, unlike the European provisions, shape marks are not expressly dealt with.

    "If you have a product or service offering on the market, and part of the branding around it is shape, or the colour of packaging or of advertising, then you can potentially register those branding elements as trademarks,” Ladas says.

    "Australia has a favourable scheme in terms of registering these kinds of marks. Certainly it is more favourable than Europe. We have three potential levels of distinctiveness, whereas in Europe they only have two.”

    Ladas says sweets have not had the greatest run of luck in terms of decided cases where reliance was placed on factual distinctiveness.

    Guylian’s seahorse-shaped chocolates failed, as did Ferrero’s Tic Tac container, but the shape of the Toblerone has been protected.

    The ultimate test in Europe is whether consumers recognise the shape and colour as indicating that a trademark owner is the trade source of the goods, and Ladas says the issue considered in the Kit Kat case is what standard of proof is needed.

    “This is usually obvious for words, but it must be the case with modern advertising practices that consumers have come immediately to recognise some shapes as branding, or that they will at least come to this recognition through promotion of that brand over the course of time,” he says.

    Ladas says businesses should be aware that they can protect these valuable aspects of their branding, and should consider using the trademark registration process for existing brands.

    “If the brand is new, then the other side of the coin is to make sure that – by adopting colours and shapes in their branding – they are not treading on the toes of other traders who have already registered or used these branding elements," Ladas says.


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    Businesses are being urged to review their cloud computing arrangements and their internal processes ahead of new privacy laws which will come into effect a week from today.

    From March 12 businesses could be fined up to $1.7 million per breach of the new regulations, which aim to bring Australia’s privacy laws up-to-date with current technology trends.

    The new laws will make it more difficult for businesses to collect information about consumers without their knowledge.

    Association for Data-driven Marketing and Advertising chief executive Jodie Sangster told SmartCompany there are four main changes to the legislation which impact businesses.

    “Number one, the definition of personal information has been extended to also account for certain information which is collected anonymously. This information when used with other information has the capacity to identify someone,” she says.

    “There are also new requirements around transparency. Businesses must now notify individuals when information has been collected, how it’s used and where it’s stored.”

    Sangster says businesses will also need to give consumers more control over their ability to opt-out of marketing communications.

    “The big change with the opt-out function is that businesses will not only have to include one, but they should guide consumers to a preference centre where they can choose if they want to receive emails but not telephone calls, for example,” she says.

    “There are also new requirements around data going overseas. The Australian company will now be responsible if something goes wrong and there is a privacy breach.”

    The new Australian Privacy Principles will replace the current National Privacy Principles and Information Privacy Principles.

    The laws will apply to businesses that turn over more than $3 million a year and collect personal data.

    However, there are some small businesses which turn over less than $3 million that will still need to abide by the new legislation. For example, the laws apply if the business is a health services provider, related to a larger business, trades in personal information, or is a contractor which provides services under a Commonwealth contract.

    The new legislation will see the Privacy Commissioner have greater powers to enforce the legislation.

    The Privacy Commissioner, on behalf of the Information Commissioner, will be able to accept enforceable undertakings, seek civil penalties in the case of serious breaches, and conduct assessments of privacy performance for both Australian government agencies and businesses.

    Sangster says businesses could face multimillion dollar penalties, although there is likely to be a transition phase.

    “It’s not like from March 12 everybody will be fined, but I expect we will see fines issued under this legislation,” she says.

    “I think it will be similar to consumer protection laws, particularly those regarding misleading advertising. There aren’t court cases every day, but they are frequent enough for businesses to know they have to be very careful.”

    Sangster says for consumers the new laws guarantee more transparency around data and more opportunities to say what you’ll allow your data to be used for.

    “Thirdly businesses will also have to be more responsible, and fourthly if enough complaints are made against a company consumers will know there is a chance for very serious penalties.”

    Sangster says the privacy law amendments came about as the original laws weren’t applicable to the current technology-driven environment.

    “When the privacy laws were first launched in 2001, we weren’t in a world of data and we weren’t attached to our mobiles. The legislation wasn’t made for our time and we had to update it, although that’s only been half achieved, I don’t think they did a great job.”

    “Another push behind it was social media. There was a lot of concern at the time about information provided on social media and the availability of data.”

    Sangster says businesses are going to need to ensure they have the appropriate safeguards in place.

    “They’re going to have to change all their internal processes and procedures. They’ll also have to make sure data sets are kept totally separate because of this new consideration of the idea that two sets of information can lead to an individual being identified,” she says.

    “In terms of the storage of data, businesses will also need to ensure they have water tight agreements in place with external companies to ensure there’s no chance of privacy breaches.”


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