Federal Court dismisses ACCC case against LG

Justice Middleton has dismissed the ACCC's case against LG Electronics Australia for allegedly misleading consumers about their rights in regards to faulty products.
Written by Tas Bindi, Contributor

Legal proceedings brought against LG Electronics Australia by the Australian Competition and Consumer Commission (ACCC) have been dismissed by the Federal Court after nearly two years.

The ACCC had alleged that the South Korean electronics company made false or misleading representations to consumers about their rights in relation to faulty LG products, including TVs.

Under Australian Consumer Law, customers have a guarantee of acceptable quality beyond a manufacturer's warranty, and may still be entitled to a repair, refund, or replacement upon expiration.

"Consumer guarantees are not limited to a set time period. Instead, they last as long as it is reasonable to expect, depending on factors such as the nature and price of the item or any representations made about the item," ACCC deputy chair Delia Rickard said in a statement.

However, the competition watchdog claimed that LG told customers that if a defect occurred on one of its TVs after warranty had expired, customers would only be entitled to a remedy if they paid for the cost of assessment.

Additionally, the ACCC said the consumer was only entitled to have the TV repaired -- not to a refund or replacement -- and that the consumer was liable for the labour costs of the repair.

Justice Middleton dismissed ACCC's allegations on Friday.

"The ACCC is carefully considering the judgment," Rickard said.

The competition watchdog had previously brought legal action against LG for misleading or deceptive conduct in 2005, 2006, and 2010.

In 2006, LG was found to have been in breach of the consumer protection provisions of the Trade Practices Act 1974 after the Federal Court ruled that the electronics giant made false or misleading representations in several of its online mobile telephone user manuals.

At the time, the ACCC warned LG against making misleading statements surrounding warranty and the rights of consumers in the future.

Additionally, the court ordered LG to refrain from making representations to similar effect in the future; implement an upgraded trade practices compliance program; arrange the publication of consumer notices on its website and in all major Australian newspapers; provide each of its mobile telephone retailers with a notice explaining the relevant provisions of the Act; and pay the ACCC's costs.

In 2012, LG, along with Panasonic, Sony, Samsung, and Sharp, were given a slap on the wrist by the ACCC for using the term "Wi-Fi ready" or "Wireless LAN ready" too loosely, and suggested that vendors amend their promotional and marketing material.

For the full year ended December 31, 2016, LG Electronics Australia reported a net profit of AU$11.8 million, a slight drop from the AU$11.9 million recorded in the previous year.

Revenue in 2016 rose 2.5 percent year over year from AU$695 million to AU$713 million.

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