Introduction
The case of Australian Competition and Consumer Commission v Optus Mobile Pty Limited [2025] FCA 1177 highlights the significant role of the Australian Consumer Law (ACL) in protecting consumers, particularly those who are vulnerable. The Federal Court’s imposition of a $100 million penalty on Optus for unconscionable and misleading conduct underscores the regulator's focus on enforcing these protections. This analysis will address several key legal questions arising from this case. First, it will examine the relationship between the statutory prohibition on unconscionable conduct under section 21 of the ACL and the equivalent doctrine under the unwritten law. Second, it will explain the distinction between the general prohibition on misleading or deceptive conduct in section 18 and the specific prohibition on false or misleading representations about price in section 29(1)(i). Finally, it will consider the remedies applied in the Optus case, comparing them with those available at common law and in equity, and will discuss how consumer vulnerability influences pecuniary penalties and the role of enforceable undertakings.
Section 21 of the ACL and the Unwritten Law on Unconscionable Conduct
The prohibition on unconscionable conduct is a central feature of the ACL. To understand the statutory provision, it is first necessary to understand the "unwritten law" on the topic, which primarily refers to the equitable doctrine of unconscionable dealing. This doctrine, established in cases like Commercial Bank of Australia Ltd v Amadio (1983), allows a court to set aside a transaction where one party is at a "special disadvantage," the other party knows of this disadvantage, and the stronger party takes unconscientious advantage of it. A special disadvantage can arise from factors such as poverty, sickness, age, illiteracy, or lack of education, which seriously affects a party's ability to make a judgment as to their own best interests (Mason J in Amadio at 462).
Section 21(1) of the ACL provides that "a person must not, in trade or commerce, engage in conduct that is, in all the circumstances, unconscionable." Crucially, the section explicitly states that it is not limited by the unwritten law relating to unconscionable conduct. This means that while conduct that is unconscionable in equity will also be unconscionable under section 21, the statutory provision has a wider reach (Paterson, 2020). The statutory concept is not confined to the specific elements of the Amadio principle, such as identifying a special disadvantage.
Instead, section 21 requires a court to consider "all the circumstances" of the conduct. Section 22 provides a non-exhaustive list of factors that a court may consider when assessing unconscionability in relation to consumers. These factors include:
- the relative strengths of the bargaining positions of the supplier and the consumer;
- whether the consumer was able to understand any documents relating to the supply of the goods or services;
- whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer; and
- the extent to which the supplier’s conduct towards the consumer was consistent with the supplier’s conduct in similar transactions with other similar consumers.
In the case of ACCC v Optus, the conduct involved selling contracts to "hundreds of, often vulnerable, Australians." While some of these consumers may have had a "special disadvantage" sufficient to trigger the equitable doctrine, the ACCC's action under section 21 did not require this to be proven for every individual. Instead, Justice O’Sullivan’s findings would have likely focused on the system of conduct employed by Optus. By considering the factors in section 22, the court could determine that Optus’s overall business practices and sales tactics were unconscionable. For instance, the targeting of vulnerable people would be strong evidence of using unfair tactics and exploiting an imbalance in bargaining power. The finding of unconscionable conduct against Optus therefore demonstrates how section 21 operates as a broader, more flexible tool for assessing standards of commercial morality than the traditional equitable doctrine.
The Difference Between Sections 18 and 29(1)(i) of the ACL
The ACL contains a general prohibition on misleading conduct as well as numerous specific prohibitions on false or misleading representations. The Optus case involved contraventions of both section 18 and section 29(1)(i). While they appear similar, they are distinct in their scope and legal consequences.
Section 18(1) states that "a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive." This is a broad, "catch-all" provision that applies to a wide range of commercial activities (ACCC, 2021). It is a strict liability provision, meaning that a person’s intention is irrelevant; the focus is on the effect of the conduct on the audience to whom it is directed (see ACCC v TPG Internet Pty Ltd (2013)). A breach of section 18 does not, by itself, attract a pecuniary penalty, but it can lead to other remedies such as injunctions, damages, and compensatory orders.
In contrast, section 29 contains a list of specific false or misleading representations. Section 29(1)(i) specifically prohibits a person from making "a false or misleading representation with respect to the price of goods or services." This is much narrower than section 18, as it is confined to representations about price. Conduct that breaches section 29(1)(i) will almost certainly also breach the general prohibition in section 18. The crucial difference, however, lies in the consequences of a breach. Unlike section 18, a contravention of section 29 is a civil penalty provision. This means that a court can order the contravener to pay a significant pecuniary penalty to the Commonwealth, as seen in the $100 million penalty imposed on Optus. Breaches of section 29 can also be prosecuted as criminal offences.
In practice, the ACCC often pleads breaches of both sections, as was done in the Optus proceedings. This is a strategic choice. The section 18 allegation captures the overall misleading nature of the conduct, while the specific section 29 allegation provides the legal basis for the ACCC to seek pecuniary penalties, which serve as a powerful deterrent. In the Optus case, the company's conduct may have been misleading in a general sense (s 18), but it was the specific misrepresentations about the cost of its plans or products that triggered the penalty provision of section 29(1)(i).
Remedies, Vulnerability and Enforceable Undertakings
The remedies available under the ACL differ significantly from those available at common law or in equity for similar conduct. The orders made in the Optus case—a $100 million penalty, declarations, a public notice, and costs—illustrate the public and regulatory focus of the statutory regime. At common law, the primary remedy for a misrepresentation that induces a contract is rescission or damages in tort. In equity, the main remedy for unconscionable dealing is an order to set the transaction aside. These remedies are focused on providing corrective justice to the individual victim.
The ACL remedies, particularly pecuniary penalties, serve a different purpose. They are primarily aimed at deterrence, both specifically (to deter the contravener from reoffending) and generally (to deter others in the industry from engaging in similar conduct). A penalty of $100 million is not designed to compensate consumers but to punish the wrongdoing and signal to the market that such conduct will not be tolerated. Public notices also serve a public function by informing consumers about the company's misconduct.
The vulnerability of the Optus consumers was a key factor in determining the size of the pecuniary penalty. Section 224 of the ACL sets out the matters a court must have regard to when determining an appropriate penalty. These include the nature and extent of the conduct and any loss suffered. As the High Court has noted, the exploitation of vulnerability is an aggravating factor that can justify a higher penalty (see, for example, the principles discussed in ACCC v Turi Foods Pty Ltd [2013] FCA 665). Justice O’Sullivan would have considered Optus’s targeting of vulnerable customers as a serious breach of commercial norms, indicative of a high degree of culpability. The substantial penalty reflects the court’s objective of protecting the most vulnerable members of the community from exploitation.
Finally, the role of the enforceable undertaking (EU) pursuant to section 87B of the Competition and Consumer Act 2010 (Cth) is a critical part of the regulatory toolkit. An EU is a formal, written commitment from a business to the ACCC, which is enforceable in court. In the Optus case, the company provided an EU "to fix the underlying problems." This demonstrates the forward-looking and corrective nature of this tool. While court orders punish past behaviour, an EU can be used to secure proactive changes to business practices to prevent future contraventions. For Optus, this likely involves commitments to overhaul staff training, improve compliance systems, and perhaps establish a redress program for affected customers. EUs are a flexible and efficient alternative to litigation, allowing the regulator to achieve compliance outcomes that a court might not have the power or inclination to order (ACCC, 2022).
Conclusion
The ACCC v Optus case serves as a clear illustration of the key principles and enforcement mechanisms of the Australian Consumer Law. The statutory concept of unconscionability under section 21 provides a broader and more flexible basis for protecting consumers than the traditional equitable doctrine. Similarly, the relationship between the general prohibition in section 18 and the specific penalty provisions like section 29(1)(i) allows the ACCC to address a wide range of misconduct while seeking substantial penalties for more serious contraventions. The remedies imposed, particularly the significant pecuniary penalty, highlight the ACL's focus on public deterrence and the protection of vulnerable consumers. Paired with the corrective power of an enforceable undertaking, the ACL provides a comprehensive framework for regulating corporate conduct and promoting fair trading in Australia.
References
Australian Competition and Consumer Commission. (2021) Misleading or deceptive conduct. Available at: https://www.accc.gov.au/business/advertising-and-selling/false-or-misleading-claims/misleading-or-deceptive-conduct (Accessed: 15 May 2024).
Australian Competition and Consumer Commission. (2022) Section 87B undertakings: guidelines for the use of section 87B undertakings. Available at: https://www.accc.gov.au/publications/section-87b-undertakings-guidelines-for-the-use-of-s87b-undertakings (Accessed: 15 May 2024).
Paterson, J. (2020) 'The Meaning of Unconscionability in the Australian Consumer Law', Melbourne University Law Review, 44(1), pp. 263-299.
Australian Competition and Consumer Commission v Optus Mobile Pty Limited [2025] FCA 1177.
Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640.
Australian Competition and Consumer Commission v Turi Foods Pty Ltd [2013] FCA 665.
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447.
Competition and Consumer Act 2010 (Cth).
