CMOpinion: consumer reform turns 10 – a story about “long johns”

In her regular Mumbrella column, 8-Star Energy CMO Diana Di Cecco reminisces about interesting cases, marketing learnings, and how it traces back to itchy undergarments.

Earlier this year, the Competition and Consumer Act 2010 (CCA) turned ten. Traditionally, a ten-year anniversary is marked with tin to represent durability and flexibility; features the CCA’s reform provided via significant transformation.

Back in 2011, the CCA was renamed from the Trade Practices Act 1974 and introduced the Australian Consumer Law (ACL). At a recent webinar held by the Monash University National Commercial Law Seminar, Australian Competition and Consumer (ACCC) Chair, Rod Sims, described the ACL’s establishment as a “game changer” that enabled regulators to unite on consumer issues in ways not previously embraced. In particular, Sims highlighted the introduction of “civil pecuniary penalties for consumer law contraventions” as the mechanism enabling compliance to be effective nationally.

While every marketing department has had to find ways to comply with change and regulation, the significance of its origins and the consumer movement, is worthy of pause. So, I’m taking a moment to reflect on leading cases, how they changed marketing behaviour and what might lie ahead in regulatory land. But first, underpants.

What do underpants have to do with it? Everything! 

One fine day in 1931, Richard Grant purchases two pairs of long johns from a store. Despite perverse itching, he wears them for a week (common for the time) and then wears the second pair for a week. His irritation is serious; a dermatologist renders Grant incapacitated. It takes him a year to recover, suffering financial and psychological hardship. A mental breakdown ensues. Grant sues the store for breach of contract suggesting the long johns were ‘not fit for purpose.’ Hello, tort of negligence, a long legal battle and the burden of proof. 

Sidebar: In 1932, the case Donoghue v Stevenson (the one where the woman found a snail in her ginger beer) altered the business of trade. The court finds a duty of care does exist when you manufacture goods – a significant point for Grant and his under-garment situation. 

The long john’s manufacturer wins an appeal in the High Court based on insufficient evidence the garment caused Grant’s skin irritation. Nevertheless, London’s Privy Council (the appeals court at the time) overturns the verdict, suggesting; 

  1. The manufacturer was careless regarding chemical residue in garments, 
  2. The consumer could not have been aware chemicals were still contained in the garment, and 
  3. The manufacturer provided no guidance on garments needing to be washed before wearing. 

Grant is awarded a settlement, garments now have those little tickets on them directing shoppers to ‘wash before wear’ and consumers are protected by torts of negligence and duty of care. So, while regulation has evolved since then, you can see how consumer safety protections were already being moulded 80 years ago, and we have long johns to thank for it.

Cases and learnings

Over the past ten years, the Federal Court has imposed circa $400 million in penalties from ACCC proceedings. Here are three significant ACCC case wins and what (I hope) marketing departments learned from them.

#BreadGate: Coles’ false ‘freshly baked bread’ claims (2015)

Who can forget this one? Jeff Kennett, former Victorian Premier, learns his Cuisine Royale bread from Coles was ‘freshly baked’… in Ireland. At the time, some of Coles’ bread was partially baked earlier in other countries. Kennett puts a call in to Sims who launches an inquiry. The ACCC takes Coles to court for misleading consumers that bread was baked on the day of purchase. Coles is declared guilty, was banned from advertising its bread as baked on the day it is sold (when it is not), and was fined $2.5 million.


  1. Don’t even entertain the thought of inaccurately labelling products or potentially misleading consumers. If you’re running a fine line, ponder on Coles’ $2.5M fine – I’m certain you will come to the right conclusion. 
  2. Who you know matters. 

If anyone has Sims on speed dial, please do pass on his number – there are a few claims I’d love for him to investigate.

Volkswagen AG’s untruthful representations about emissions (2019)

In a case of green washing, Volkswagen (VW) manufactured vehicle software in two modes. One for testing, resulting in lower emissions, and a second for regular driving, producing higher emissions. The ‘feature’, an underground secret, was not disclosed to regulators as the second mode did not meet emissions standards. VW vehicles are included in the Green Vehicle Guide, a publication that helps consumers make informed decisions about vehicle environmental and fuel performance. The ACCC initiates proceedings, VW produces a software update removing the two-mode functionality, and the Federal Court rules they have made false representations about emissions compliance. The highest ever penalty, $125 million, was imposed and upheld, despite an appeal


  1. Sustainability has morphed into ‘cool’ and environmentalism is being embraced. 
  2. Environmental fluffiness is a thing of the past and the onus is on business to substantiate claims. 
  3. Green washing is deceitful, misleading and guaranteed to erode brand equity and trust, especially for actions that are blatant and deliberate. 

First case of ‘gun jumping’ – Cryosite Limited prosecuted for cartel conduct (2019)

In the first of its kind, the ACCC prosecuted for ‘gun jumping’; when merger parties collaborate prior to a transaction being complete by prematurely ceasing to compete, amounting to cartel conduct. Biotech companies, Cryosite and Cell Care Australia, provide cord blood and tissue services (CBT banking). Cryosite agrees to sell its CBT services to Cell Care but prior to the deal’s completion, Cryosite changed its market behaviour by not serving new customers and referring them to Cell Care – a reversable process should the ACCC become suspicious. Cryosite received a $500,000 payment for the ‘referral program’. Neither party sought ACCC clearance. The ACCC expressed competition concerns. The Federal Court imposes a $1.05 million penalty for engaging in ‘gun jumping’ cartel conduct – the ‘light’ fine reflects investigation co-operation. Parties do not proceed with the sale.


  1. Cartel conduct, even if only in effect for a short duration (as in this case), is unacceptable and can raise competition concerns. 

While this example is more of a business problem than marketing specific, it highlights how cartel conduct can change market conditions and that circumventing merger control rules, is never a good idea. 

The next chapter

In late February, the ACCC released its 2021 compliance and enforcement priorities which included consumer protection, privacy and personal data reform, product safety, franchising and specific industries. While it’s forever monitoring for issues regarding competition and consumer law, some key takeaways include; 

  1. Industry taking investigations seriously, 
  2. An adjustment to the definition of a consumer, 
  3. Contract provisions to further eradicate unfair terms, and 
  4. Reform for merger controls. 

It is obvious the ACCC means business with regard to compliance and continued protections. I anticipate a continued path of higher penalties, honing in on targeted industries, in addition to increased co-operation between jurisdictions to meet future challenges as market conditions evolve. 

The most significant area in which we can expect to see progress is with digital platforms – I won’t drop the F-word (or the G-word) – but the growth and substantial market power of these players is on the radar. If you actually read it, hints can be found in the Digital Platforms Inquiry final report and subsequent government response. In a nutshell, we can expect to see; 

  1. New approaches to regulation, 
  2. Improvements to consumer protections, 
  3. The promotion of healthy competition, 
  4. A focus on privacy law, and 
  5. The continued investigation and monitoring of platforms and the media industry as a whole. 

Marketers need to stay vigilant and intimate with changes given their magnitude to influence strategy, go-to-market plans and the overall media mix.

As marketers, we have a responsibility to our profession, to our peers and to our customers, to be clear, honest and law-abiding. Consumers keep brands alive. In fact, our brands only exist in their minds and without their hard-earned dollars buying our products, brands are nothing. So, if you’re not already, familiarise yourself with the ACL and invite compliance to be at the forefront of your marketing considerations – don’t think of it as ‘legal stuff’ – think of it as ‘consumer stuff’ and it is everyone’s responsibility.

The ACCC and its assertiveness are set to escalate so learn from other people’s mistakes; the aforementioned cases are just a handful of situations that should have been avoided. Sometimes, the calamitous finds us and yes, shit happens but don’t let silly (avoidable) mistakes happen on your watch. We’re better than that.

Diana Di Cecco is the CMO of 8-Star Energy. CMOpinion is a regular Mumbrella column.


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