Australian Competition and Consumer Commission v Nationwide News Pty Ltd Australian Competition and Consumer Commission v Smartcom Telecommunications Pty Ltd

The Federal Court of Australia heard two cases involving the Australian Competition and Consumer Commission (ACCC) as the prosecutor against Nationwide News Pty Ltd and Smartcom Telecommunications Pty Ltd. The central issue in both cases was whether the defendants had contravened section 53(g) of the Trade Practices Act 1974 (Cth) through misleading advertisements. Specifically, the advertisements promoted "free" mobile phones, but consumers would need to enter into contracts with third-party carriers, incurring significant costs. The court found Nationwide News Pty Ltd guilty on six counts of misleading statements regarding conditions, and not guilty on the remaining 18 counts. The court considered factors such as the seriousness of the contravention, Nationwide's disregard of warnings, and the potential for substantial aggregate economic harm.

The court emphasised that the use of the word "free" was highly misleading, as consumers would have to pay substantial amounts to obtain the mobile phones. Despite Nationwide's argument that consumers might not suffer real economic harm, the court held that the aggregate potential loss was substantial, and the contravention was serious enough to warrant a fine of $20,000 for each of the six counts. The court rejected Nationwide's argument that the contravention was minor because the individual consumer's loss was small. The court also found that Nationwide had not shown sufficient regret or contrition for their actions.

Regarding costs, the court determined that the ACCC's failure on most of the charges did not warrant an order for Nationwide to receive the majority of its costs. Instead, the court upheld the principle that costs generally follow the event, but the discretion to order costs is not strictly confined to the arithmetic of success and failure on particular issues. The court concluded that the ACCC's efforts were reasonable, and the costs should not be apportioned in a manner that might dissuade parties from raising all relevant issues. Consequently, the court ordered Nationwide News Pty Ltd to pay the ACCC's costs, while the ACCC was to bear the costs of Smartcom Telecommunications Pty Ltd.