28/05/2019

Earlier this year the Government announced plans to reform Australia’s privacy and consumer laws to provide greater protections for individuals and small businesses. Following the recent election result, we now have greater clarity on the future of these reforms.

Protecting our privacy – enforcement changes

On 25 March 2019, the Government announced plans to “ensure Australians were protected online and that major social media companies took action to protect the personal information they collect about Australians, particularly children”.  Draft legislation is promised for consultation in the second half of 2019 and is set to include:

  • an increase in the maximum penalty for serious and repeated interferences with the privacy of an individual under the Privacy Act 1988 (Cth) (Privacy Act).  These would bring Australia closer to a European Union General Data Protection Regulation (EU GDPR) style threshold, increasing the current penalty from $2.1m (for corporate entities) to the greater of $10m, 3 times the value of any benefit obtained through the misuse of the information, and 10% of the company’s annual domestic turnover.  For a comparison of the key requirements under the EU GDPR and the Australian Privacy Act, see our article “GDPR: Ready or not, here it comes”;

  • greater enforcement and remedial powers for the regulator, the Office of the Australian Information Commissioner (OAIC);
  • a requirement that technology and social media companies cease using and disclosing an individual’s personal information on request;
  • new rules to protect the personal information of children and other vulnerable groups; and
  • a new code for social media and online platforms that governs their collection, use and disclosure of personal information

In line with the Government’s announcement, the latest Budget (which was handed down on 2 April 2019) allocated $25.1m over three years, including capital funding of $2m, to the OAIC to “facilitate timely responses to privacy complaints and to support strengthened enforcement action in relation to social media and other online platforms that breach privacy regulations”.

For more information on these reforms, see our article “Heralding a more aggressive approach by the privacy commissioner? Government signals amendments to privacy law”.

Protecting small businesses – changes to the unfair terms regime

On 28 March 2019, the Government also announced plans to “further strengthen protections to all small businesses from unfair contract terms (UCTs)”.  This announcement followed an earlier review by the Government of existing legislative protections provided to small businesses.

In addition to a number of technical amendments, the Government will consult on the following options through a Regulation Impact Statement process:

  • making UCT's illegal and attaching civil penalties to breaches.  Currently, only Courts and Tribunals can declare an UCT unfair and therefore void, with a party to the contract, the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission all having standing to seek such a declaration;
  • redefining a ‘small business’ as one that employs fewer than 100 people or that has an annual turnover of less than $10m at the time that the contract is entered into.  Currently, a small business is defined as one that employs fewer than 20 people, including casual employees employed on a regular and systematic basis;
  • broadening the coverage of small business contracts by removing the value threshold.  Currently, a small business contract is defined as one for which the upfront price payable under the contract is no more than $300,000, or $1m where the contract term exceeds 12 months;
  • further clarifying the definition of a ‘standard form contract’.  Currently, a standard form contract is defined as one which has been prepared by a party in circumstances where the other party has had little or no opportunity to negotiate;
  • extending the UCT protections to government contracts; and
  • considering exempting ‘minimum standards’ prescribed by state and territory laws to avoid conflict with the UCT protections.

Looking forward

These changes, if implemented, significantly amplify the importance of these two key areas of consumer protection.

Written by Tim Gole, Linda Marshall and graduate Meaghan Powell

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