ACCC releases product safety guide for online businesses

Posted by AFN Staff Writers on 26th March 2014
The ACCC has released a guide for online retailers

The Australian Competition and Consumer Commission (ACCC) has released a new publication, ‘A guide for business: Consumer product safety online’, that outlines best practice tips for online sellers and marketplaces.

Specialist FoodLegal lawyer Joe Lederman said the document is a “must read” for marketers. He said FoodLegal has also developed new training materials aimed at companies that are marketing online their food and beverage products.

“Australian consumers are increasingly looking to online stores to purchase consumer products but the online environment creates some unique product safety challenges and requirements that online suppliers need to be aware of,” said Dr Michael Schaper, ACCC Deputy Chair.

For example, while a consumer could quickly and easily check the mandatory ingredients list of a cosmetic or food product while in-store, they are unable to do this online unless the list is clearly displayed with the product information.

“The ACCC is concerned that some online sellers, particularly those based overseas, may not be aware that all businesses supplying to Australian consumers have the same obligations under the Australian Consumer Law (ACL),” Dr Schaper said.

Businesses breach the ACL if they sell banned products, do not meet all the requirements of mandatory product safety standards or fail in their obligations related to product liability, consumer guarantees and misleading and deceptive conduct.

“Mandatory standards and bans are critical in preventing product-related deaths, injuries and illnesses,” Dr Schaper said. “The ACCC regularly checks for non-compliant products being sold to Australian consumers, including via online stores,” he said.

For example, in 2013 ACCC surveillance identified two online businesses supplying banned small, high-powered magnets to Australian consumers. Following negotiations with the ACCC, these suppliers stopped selling the magnets to Australians and conducted national product recalls.

“Product recalls can be expensive for a business but the cost of a recall is not the only potential financial consequence to online businesses who supply unsafe products,” Dr Schaper said. “Penalties can include infringement notices and the ACCC can seek court-imposed penalties of up to $1.1 million for serious breaches,” he said.

Compliance tips for online businesses include:

  • clearly displaying warnings and product labelling

  • using good quality product images

  • providing clear product descriptions, including recommended usage and age-grading for children’s products

  • checking the requirements of Australian safety standards and bans prior to listing a product available for sale.

“Businesses must remember that the Australian Consumer Law applies regardless of whether products are sold in a ‘bricks and mortar’ shop, in an online store or via an online marketplace, and regardless of where the seller is based, I encourage all online suppliers to download a copy of the free report,” Dr Schaper said