FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Uber B.V. [2022] FCA 1466
File number: VID 218 of 2022 Judgment of: O'BRYAN J Date of judgment: 7 December 2022 Catchwords: CONSUMER LAW – misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law – false or misleading representations with respect to price in contravention of s 29(1)(i) of the Australian Consumer Law – two separate categories of misrepresentation comprising separate courses of conduct – where respondent admitted contraventions – where pecuniary penalty sought by applicant not opposed by respondent – whether aggregate quantum of penalty appropriate for each category of misrepresentation – consideration of principles governing determination of a civil penalty that is appropriate – importance of the mandatory considerations under s 224(2) of the Australian Consumer Law and the centrality of the nature and extent of harm that may be caused by the contravening conduct – inadequate evidence adduced on the question of harm caused by the contravening conduct and other matters – quantum of penalty proposed for one category of misrepresentation not within the range of appropriate penalties – lesser penalty imposed – declarations and ancillary orders made in form sought by the parties Legislation: Competition and Consumer Act 2010 (Cth) Sch 2 (Australian Consumer Law) ss 13, 18, 29(1)(i), 224, 232, 246(2)(b), 246(2)(d)
Evidence Act 1995 (Cth) s 191
Federal Court of Australia Act 1976 (Cth) s 21
Cases cited: Australian Building and Construction Commissioner v Pattinson (2022) 175 ALD 383
Australian Competition and Consumer Commission v AGL South Australia Pty Ltd [2014] FCA 1369
Australian Competition and Consumer Commissionv Australian Private Networks Pty Ltd (t/as Activ8me) [2019] FCA 384; 136 ACSR 80
Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36
Australian Competition and Consumer Commission v Birubi Art Pty Ltd (in liq) [2019] FCA 996; 374 ALR 776
Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; 317 ALR 73
Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd (No 2) [2014] FCA 1022; ATPR 42-487
Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; 327 ALR 540
Australian Competition and Consumer Commission v Danoz Direct Pty Ltd [2003] FCA 881; 60 IPR 296
Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682
Australian Competition and Consumer Commission v Employsure Pty Ltd [2020] FCA 1409
Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd (2014) 234 FCR 343
Australian Competition and Consumer Commission v EnergyAustralia Pty Ltd [2015] FCA 274
Australian Competition and Consumer Commission v Google LLC (No 2) [2021] FCA 367; 391 ALR 346
Australian Competition and Consumer Commission v Google LLC (No 4) [2022] FCA 942
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- Case
- [2022] FCA 1466
- Decision Date
CaseChat Overview and Summary
Orders
Orders of the court
3. The respondent be restrained for a period of three years from the date of this order, whether by itself, its servants, agents or otherwise, in trade or commerce in connection with the supply or possible supply or promotion of rideshare services, from making any representation to the effect that a consumer may be charged a cancellation fee in circumstances where the relevant terms and conditions or cancellation policies applicable in Australia to the rideshare services stipulate that the consumer would not be charged a cancellation fee.
4. Within 30 days of the date of this order, the respondent pay to the Commonwealth of Australia pecuniary penalties in the amounts of:
(a) $3 million in respect of the respondent’s contraventions of s 29(1)(i) of the ACL set out in the declaration at paragraph 1 above; and
(b) $18 million in respect of the respondent’s contraventions of s 29(1)(i) of the ACL set out in the declaration at paragraph 2 above.
5. Within five days of the date of this order, the respondent publish, or cause to be published, at its own expense, a colour copy of a corrective notice in the form provided at Annexure A on the website located at https://www.uber.com/au/en/ and ensure that such corrective notice:
(a) is maintained on that website for a period of 30 days from the date of this order;
(b) is viewable immediately on a computer screen upon access to https://www.uber.com/au/en/;
(c) is crawlable (ie, its contents may be indexed by a search engine); and
(d) of a size that consists of at least 40% of the images on the screen utilising a “modal” pop-up window.
6. The respondent, at its own expense:
(a) establish and implement an Australian Consumer Law Compliance Program in the form provided at Annexure B to be undertaken by:
(i) senior management and marketing employees of Uber Australia Pty Ltd involved in the Rides business; and
(ii) such employees of the respondent making determinations as to the messaging in respect of the Rides business in the Uber app which is displayed to Australian consumers,
being a program designed to minimise the respondent’s risk of future contraventions of ss 18 and 29 of the ACL;
(b) maintain and continue to implement the Australian Consumer Law Compliance Program referred to in sub-paragraph 6(a) for a period of three years from the date of this order; and
(c) comply with the requirements regarding the provision of Compliance Program documents to the ACCC, for a period of three years from the date of this order.
7. The respondent pay the applicant’s costs of, and incidental to, this proceeding, fixed in the amount of $200,000, within 30 days of the date of this order.
8. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (on the ground that the order is necessary to prevent prejudice to the proper administration of justice), for a period of five years from the date of this order (subject to any further order of the Court):
(a) the figures referred to in:
(i) the second column of the table in paragraph 21, the columns entitled “Average consumer fare”, “Average service fee” and “Average variable contribution” of the table in paragraph 38, the percentages referred to in paragraph 40, the columns entitled “Average consumer fare”, “Average service fee” and “Average variable contribution” of the table in paragraph 41, the percentages referred to in paragraph 44, the figures referred to in paragraph 53, the figures referred to in paragraphs 61(a), 61(b) and 61(c) and the percentage referred to in paragraph 62 of the supplementary statement of agreed facts filed on 21 September 2022;
(ii) the second column of the table in paragraph 9 of the affidavit of Sebastien Serge Dupont affirmed on 21 September 2022;
(iii) the columns entitled “Average consumer fare”, “Average service fee” and “Average variable contribution” of the tables in paragraphs 11 and 15 of the affidavit of Sashikant Dash affirmed on 23 September 2022; and
(iv) the dollar amounts in paragraph 19(a), the percentages referred to in paragraph 19(d), the dollar amount in paragraph 21, the percentages and dollar amounts (with the exception of the final two percentages) in paragraph 24, the figures in paragraphs 27(a) and 27(b), the number of weeks specified in paragraph 44(c), the dollar amounts in the final sentence of paragraph 45 and the dollar amounts and number of days referred to in footnote 20 (with the exception of “$26 million” referred to in the final daily calculation) of the ACCC’s supplementary submissions on penalty dated 21 September 2022,
(together, the Confidential Information) are to be treated confidentially and will not appear in any transcript or judgment in the proceedings other than in a confidential copy of the transcript or judgment which shall only be made available to those persons permitted by these orders to have access to the relevant Confidential Information; and
(b) no person is to have access to the Confidential Information pursuant to r 2.32 of the Federal Court Rules 2011 (Cth), other than those persons who are permitted by these orders to have access to the Confidential Information.
9. The following persons have unrestricted access to the Confidential Information provided such persons keep that material confidential in accordance with these orders:
(a) Court staff and any person assisting the Court;
(b) the parties to the proceedings; and
(c) any persons assisting the parties to the proceedings, to the extent required for the purposes of providing that assistance, including barristers and external solicitors retained by the parties.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
CORRECTIVE NOTICE
PUBLISHED BY ORDER OF THE FEDERAL COURT OF AUSTRALIA
[insert Uber logo]
Misleading Representations by Uber B.V.
Following proceedings commenced by the Australian Competition and Consumer Commission (ACCC), the Federal Court has declared that Uber B.V. (UBV) contravened the Australian Consumer Law by making false or misleading representations and engaging in false or misleading conduct as follows:
● between 20 June 2018 to 31 August 2020, UBV displayed on the Uber app and the Uber website, an estimated fare range for UberTaxi trips booked through the Uber platform, and thereby represented to consumers that the price the consumer would pay for a taxi booked through UberTaxi would likely be in the displayed fare range, when in fact the actual price paid by riders was likely to be less than the lower range of the fare estimate; and
● between 8 December 2017 to 20 September 2021, UBV displayed on the Uber app and the Uber website to consumers who booked an UberX, Uber Premier, Uber Comfort or UberPool ride and had subsequently selected the “Cancel Trip” option during a period in which UBV’s terms and conditions or cancellation policies provided for a free cancellation, a message stating that they may be charged a small fee, when in fact such consumers would not be charged a fee if they cancelled during the free cancellation period.
These proceedings were settled by consent. The Court ordered UBV to:
• pay a penalty of $21 million and make a $200,000 contribution towards the ACCC’s costs;
• implement an Australian Consumer Law compliance program;
• refrain from making similar representations to the Cancellation Representation; and
• issue this corrective notice.
Further information about the Court’s decision can be found on the website of the Federal Court of Australia and in the ACCC’s media release at [link].
Annexure B
CONSUMER LAW COMPLIANCE PROGRAM
Pursuant to an order by the Federal Court dated 29 November 2022 (Order), Uber B.V. (UBV) will establish a Consumer Law Compliance Program (Compliance Program) that complies with each of the requirements below. Where requirements are relevant to Uber Australia Pty Ltd (UAPL), UBV will procure and will be responsible for ensuring UAPL’s compliance with those requirements.
Appointments
1. Within 90 days of the date of the Order, UBV will appoint a director or a senior manager of Uber’s business, or an individual with the position title of “Director” (or a position of greater seniority) in Uber’s Ethics and Compliance team, with suitable qualifications or experience in corporate compliance as a Compliance Officer to be responsible for the development, implementation and maintenance of the Compliance Program (the Compliance Officer).
2. Within 90 days of the date of the Order, UBV will appoint a suitably qualified, internal or external, compliance professional with expertise in consumer law (the Compliance Advisor).
3. UBV will instruct the Compliance Advisor to conduct a consumer law risk assessment in respect of the rideshare business provided via the Uber Platform in Australia (Australian Rides business) within 90 days of being appointed as the Compliance Advisor (Risk Assessment).
4. UBV will use its best endeavours to ensure that the Risk Assessment, which is to be recorded in a written report (Risk Assessment Report):
4.1. identifies the areas associated with the Australian Rides business where UBV is at risk of breaching section 18 of Part 2.1 and/or section 29 of Part 3.1 (Division 1) of the Australian Consumer Law (ACL) which is Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA) in respect of representations to consumers (i.e. riders);
4.2. assesses the likelihood of these breaches occurring;
4.3. identifies where there may be gaps in UBV’s existing procedures for managing the risk of these breaches; and
4.4. provides recommendations for any action to be taken by UBV having regard to the above assessment.
Compliance Officer Training
5. UBV will ensure that within 90 days of appointment pursuant to paragraph 1 its Compliance Officer attends practical training focusing on sections 18 and 29 of the ACL.
6. UBV will ensure that the training is administered by a suitably qualified compliance professional or legal practitioner with expertise in Australian consumer law.
Compliance Policy
7. Within 30 days of the date of the Order, UBV will issue a policy statement outlining UBV’s commitment to compliance with the ACL in respect of the Australian Rides business (Compliance Policy).
8. The Compliance Policy will:
8.1. contain a statement of commitment to compliance with the ACL;
8.2. contain an outline of how commitment to ACL compliance will be realised within UBV;
8.3. contain a requirement for UBV and UAPL employees to report any Compliance Program related issues and ACL compliance concerns to the Compliance Officer; and
8.4. contain a guarantee that whistleblowers with consumer law compliance concerns will not be prosecuted or disadvantaged in any way and that their reports will be kept confidential and secure.
9. A copy of the Compliance Policy will be provided to:
9.1. all members of the Executive Leadership team at UBV;
9.2. all UBV employees making determinations as to the messaging in respect of the Uber Rides business in the Uber app which is displayed to Australian consumers; and
9.3. all employees of UAPL involved in the Australian Rides business.
Whistleblower Protection
10. The Compliance Program will include whistleblower protection mechanisms to protect those coming forward with consumer law complaints which will be developed and implemented within 180 days from the date of the Order.
11. UBV will use its best endeavours to ensure that these mechanisms are consistent with AS 8004:2003 Whistleblower protection programs for entities, tailored as required to UBV’s circumstances.
Staff Training
12. The Compliance Program will include a requirement for regular (at least once a year) training (Staff Training) to raise awareness of consumer compliance issues for:
12.1. UBV employees making determinations as to the messaging in respect of the Australian Rides business in the Uber app which is displayed to Australian consumers; and
12.2. senior management and marketing employees of UAPL involved in the Australian Rides business.
13. UBV will ensure that the Staff Training is conducted by a suitably qualified compliance professional or legal practitioner with expertise in Australian consumer law.
14. UBV will ensure the Staff Training is conducted for a period of three (3) years from the date of the Order.
Reports to Board/Senior Management
15. UBV will ensure that its Compliance Officer reports to its Board or relevant governing body every 6 months on the continuing effectiveness of the Compliance Program for a period of three (3) years from the date of the Order.
Compliance Review
16. UBV will, at its own expense, cause an annual review of the Compliance Program (Review) to be carried out in accordance with each of the following requirements:
16.1. Scope of Review – the Review should be broad and rigorous enough to provide UBV with:
a) a verification that UBV has established a Compliance Program that complies with each of the requirements detailed in paragraphs 1 – 15 above; and
b) the Compliance Reports detailed at paragraph 20 below.
16.2. Independent Reviewer – each Review is to be carried out by a suitably qualified, independent compliance professional with expertise in Australian consumer law (Reviewer). The Reviewer will qualify as independent on the basis that he or she:
a) did not design or implement the Compliance Program;
b) is not a present or past employee or director of UBV, UAPL, or any other entity in the Uber group;
c) has not acted and does not act for, and does not consult and has not consulted to, UBV, UAPL, or any other entity in the Uber group in any consumer law related matters, other than performing Reviews under this Compliance Program; and
d) has no significant shareholding or other interests in UBV, UAPL, or any other entity in the Uber group.
16.3. Evidence – UBV will use its best endeavours to ensure that each Review is conducted on the basis that the Reviewer has access to all relevant sources of information in UBV’s possession or control related to the Australian Rides business, including without limitation:
a) the ability to make enquiries of any officers, employees, representatives and agents of UBV and UAPL;
b) documents relating to the Risk Assessment, including the Risk Assessment Report;
c) documents relating to the Compliance Program, including documents relevant to the Compliance Policy and Staff Training; and
d) any reports made by a Compliance Officer to the Board or senior management regarding the Compliance Program.
17. The first Review must be completed within one (1) year of the date of the Order. The second Review must be completed within two (2) years of the date of the Order. The third Review must be completed within three (3) years of the date of the Order.
18. There is no expectation that the Independent Reviewer would attend (in person) any offices outside of Australia.
Compliance Reports
19. UBV will use its best endeavours to ensure that, within 30 days of the completion of a Review, the Reviewer includes the following findings of the Review in a report provided to UBV (Compliance Report):
19.1. whether the Compliance Program includes all the elements detailed in this Annexure and, if not, what elements need to be included or further developed;
19.2. whether the Compliance Program adequately covers the parties and areas identified in the Risk Assessment and, if not, what needs to be further addressed;
19.3. whether the Staff Training is effective and, if not, what aspects need to be further developed;
19.4. whether UBV is able to provide confidentiality and security to consumer law whistleblowers and whether employees are aware of the whistleblower protection mechanisms; and
19.5. whether there are any material deficiencies in the Compliance Program, or whether there are or have been any instances of Material Failure and, if so, recommendations for rectifying the Material Failure.
Responses to Compliance Reports
20. UBV will ensure that its Compliance Officer, within 14 days of receiving the Compliance Report:
20.1. provides the Compliance Report to its Board or relevant governing body; and
20.2. where a Material Failure has been identified by the Reviewer in the Compliance Report, provides a report to its Board or relevant governing body identifying how UBV can implement any recommendations made by the Reviewer in the Compliance Report to rectify the Material Failure.
21. UBV will use its best endeavours to implement promptly (with due regard to technical or engineering requirements) and with due diligence any recommendations made by the Reviewer in a Compliance Report to address a Material Failure.
Provision of Compliance Program documents to the ACCC
22. UBV will maintain records of and store all documents relating to and constituting the Compliance Program for a period not less than 3 years from the date of the Order.
23. If requested by the ACCC during the period of 3 years, UBV will, at its own expense, cause to be produced and provided to the ACCC copies of all documents constituting the Compliance Program including:
23.1. the Compliance Policy;
23.2. the Risk Assessment Report;
23.3. Staff Training materials;
23.4. all Compliance Reports that have been completed at the time of the request;
23.5. copies of the reports to the Board and/or senior management referred to in paragraphs 15 and 20.
Material failure
24. In this Annexure, “Material Failure” means a failure, that is non-trivial and which is ongoing or continued for a significant period of time, to:
24.1. incorporate a requirement of this Annexure in the design of the Compliance Program; or
24.2. comply with a fundamental obligation in the implementation of the Compliance Program, for example, if no Staff Training has been conducted within the Annual Review period.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
The contravening conduct is not ongoing. Uber discontinued UberTaxi in Australia on 31 August 2020. On 20 September 2021, the cancellation warnings were amended by Uber Tech to address the concerns raised by the ACCC in February 2021. Uber made these changes prior to any decision by the ACCC to commence proceedings.Level of co-operation with the ACCC The parties agreed that UBV exhibited a high level of cooperation with the ACCC throughout the investigation process, including by providing some information and documents on a voluntary basis when requested. UBV also agreed to a resolution of the matter, including a substantial penalty, prior to the commencement of proceedings. The parties submitted that by its cooperation, UBV has saved the ACCC, the Court and the community the cost and burden of fully litigating the dispute, and that this cooperation has been factored into the penalty figure agreed between the parties.Maximum penalty In respect of each contravening representation made by UBV in the period prior to 31 August 2018, the maximum penalty was $1.1 million. In the period from 1 September 2018, by the operation of s 224(3A), the applicable maximum penalty is 10% of the annual turnover of UBV, which comprises the annual turnover of UBV and any related bodies corporate in relation to supplies connected with Australia, during the 12 month period ending at the end of the month in which the relevant conduct commenced. In the 12 month period prior to the commencement of the UberTaxi Representation conduct (ie, prior to June 2018), that revenue was $765 million (based on a pro rata allocation of annual revenue). In the 12 month period prior to the commencement of the Cancellation Representation conduct (ie, prior to December 2017), Uber Group revenue in respect of the Australian business was $595 million. Consequently, in respect of the UberTaxi Representation, the maximum penalty was $76.5 million for each contravening representation. In respect of the Cancellation Representation, the maximum penalty was $59.5 million for each contravening representation. The parties submitted that it is not possible to determine the precise number of times each of the UberTaxi and Cancellation Representations were made, but it is nevertheless clear that the number of contraventions was substantial. The UberTaxi Representation was made over a period of approximately two years and two months (from 20 June 2018 to 31 August 2020), most of which fell within the new penalty regime. During that period, consumers in Sydney took a total of approximately 128,853 UberTaxi trips and the fare estimate information for those trips overestimated the actual fare charged by the driver approximately 89% of the time (approximately 114,600 times). Assuming 114,600 contraventions of the Australian Consumer Law, this would give rise to a maximum penalty for the UberTaxi Representations of several trillion dollars. The Cancellation Representation was made over a period of approximately three years and nine months (from at least 8 December 2017 until at least 2 September 2021), approximately 80% of which fell within the new penalty regime. During the period from 1 December 2018 to 17 August 2021, consumers using UberX, Uber Premier or Uber Comfort were shown a cancellation warning within a free cancellation period in approximately 7.39 million bookings, and 74,559 consumers were shown a cancellation warning within an UberPool free cancellation period. This gives rise to at least 7.46 million contraventions of the Australian Consumer Law and, consequently, a maximum penalty in excess of one hundred trillion dollars.