Australia - Australian Federal Court declares European City Guide SL, trading as -Industry and Commerce- business directory, misled Australian small businesses

The Australian Competition and Consumer Commission's court action against the Spanish-based company, European City Guide SL (ECG) has been successful. The Australian Federal Court has found that the Europan City Guide SL, trading in Australia as Industry and Commerce, misled Australian small businesses into signing-up to its online business directory.

The Court found that between 2006 and 2009, Industry and Commerce engaged in misleading or deceptive conduct in breach of the Trade Practices Act 1974*.  Importantly the Court ordered Industry and Commerce not to claim, or seek a payment, for online directory services from any Australian businesses that received and completed one of the ECG Forms which contained the misleading representation.  Industry and Commerce is also required to pay 98% of the ACCC’s costs.

“These orders mean that Australian businesses who were misled by Industry and Commerce with these forms do not have to pay,” ACCC Deputy Chair Peter Kell said today. 

“This outcome sends a clear warning to overseas operators targeting Australian businesses. They are subject to Australian laws and will be pursued if they break those laws.”

“Small businesses are often the target of unscrupulous operators who capitalise on a busy office environment”, Mr Kell went on to say. “Important details in carefully crafted letters are easily missed in the fine print or misconstrued because of the use of well-chosen graphics. In the Industry and Commerce matter it was the misuse of the Australian flag that suggested a connection with a government agency”.

The Court declared between 2006 and 2009, Industry and Commerce wrote to Australian businesses asking them to update or check that the information on the Register of Business Information was “positively and correctly presented”.  The forms sent by Industry and Commerce represented that the Register of Business Information was a record of the Australian Government and, for some of that time, represented that the Register would be free to update, when this was not the case. 

Businesses that completed the forms were pursued by Industry and Commerce for fees of between $1200 and $1600 per year for a minimum of three years.  Businesses who tried to cancel the service, which amounted to a listing on an Industry and Commerce website, were threatened with debt collection and legal action. 

* On 1 January 2011 as part of the Australian Consumer Law amendments, the Trade Practices Act was renamed the Competition and Consumer Act 2010.  Legal action was initiated in 2009, before pecuniary penalties for misleading conduct were available.

See further: Industry and Commerce business directory promotion declared misleading issued 29th July 2011 and http://www.austlii.edu.au/au/cases/cth/FCA/2011/2011/804.html issued 26th July 2011