ACCC v LG Electronics Australia Pty Ltd [2017] FCA 1047: Federal Court Dismisses Claim against LG Electronics

Tuesday 5 September 2017 @ 8.50 a.m. | Legal Research | Trade & Commerce

In the case of ACCC v LG Electronics Australia Pty Ltd [2017] FCA 1047 (1 September 2017) the Federal Court has dismissed proceedings brought by the Australian Competition and Consumer Commission (the ACCC) against LG Electronics Australia Pty Ltd (LG).

Background to the Judgment

The ACCC commenced proceedings in the Federal Court in December 2015. LG has previously provided the ACCC with three separate undertakings relating to allegations of misleading or deceptive conduct in 2005, 2006 and 2010.

The ACCC has previously taken court action against LG for misleading or deceptive conduct with respect to the existence and duration of statutory warranties.

In the current LG case, the ACCC had argued that LG had misrepresented to consumers, retailers, or repairers that remedies available to consumers were limited to the LG manufacturer’s warranty; and where a defect occurred after the warranty had expired the consumer was only entitled to a remedy if the consumer paid for the costs of assessing the failure and that LG had no further obligations.

The ACCC presented several examples where customers agreed with LG to pay for labour or parts to repair a television, even though they might have been entitled to refunds and/or replacements under Australian Consumer Law (the ACL).

The Current Judgment

Justice Middleton dismissed all of these allegations. His Honour said at [para 119]:

“… LG was entitled to so conduct itself, recalling there is no allegation in this proceeding of bad faith, deliberate falsehood going to ultimate liability, or other unconscionable conduct.”

and at [para 120]:

“… Unless there is placed upon LG some additional obligation to disclose the existence of the ACL, which may or may not have provided a remedy which PG may have wanted to pursue, I cannot conclude the conduct of LG was in contravention of the ACL as a half-truth as alleged by the ACCC.”

The ACCC Argument

The ACCC also argued that information on LG's website about manufacturer warranties was misleading, because it put information about ACL at the bottom of the site in "small and closely spaced text" [at para 153]. Middleton J rejected this, saying at [paras 156-157]:

“… there is no obligation for LG to otherwise provide information to a consumer about his or her rights under the ACL. Nevertheless, LG does indicate to the consumer that there are other potential rights available to the consumer under the ACL … Any reader of the website would have immediately grasped that the website was obviously directed to providing information about the LG warranty and how it protects the consumer.”

He said further at [para 161]:

“Nothing in the information LG provided denied the existence of any other rights consumers might have.”

Reaction and Comment from the ACCC

Commenting on the judgment, ACCC Deputy Chair Delia Rickard said:

“The consumer guarantees under the Australian Consumer Law are in addition to a manufacturer’s warranty. Consumers should be aware that even if a manufacturer’s warranty expires, they may still be entitled to a repair, refund, or replacement under the consumer guarantees. Consumer guarantees are not limited to a set time period. Instead, they last as long as it is reasonable to expect depending on factors such as the nature and price of the item or any representations made about the item. Consumer guarantees are an enforcement priority for the ACCC, and we will take appropriate enforcement action against businesses that misrepresent a consumer’s rights in relation to faulty products. The ACCC took this case because we were concerned that LG’s representations to consumers who had complained about faulty televisions were misleading about the remedies available to them under the Australian Consumer Law. The ACCC is carefully considering the judgment.”

Ms Rickard stressed that consumers should be aware that, even if a manufacturer’s warranty expires, they may still be entitled to a repair, refund, or replacement under the ACL on guarantees.

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Court dismisses ACCC action against LG – ACCC Media Release MR 150/17

LG Electronics A Winner As ACCC Loses Another Case –

ACCC v LG Electronics Australia Pty Ltd [2017] FCA 1047 (1 September 2017)

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