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ACCC launches legal action against Fuji Xerox Australia over alleged unfair contracts

Corporate watchdog the ACCC has instituted proceedings in the Federal Court against Fuji Xerox Australia and a related company (together, Fuji) alleging that nine types of Fuji’s standard form small business contracts contain 173 unfair contract terms.

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The ACCC alleges there are 31 different terms which are unfair, including automatic renewal terms, excessive exit fees and unilateral prices increases. The terms have been used in contracts between Fuji and its small business customers for the supply of printing goods and services and technical assistance since at least October 2018.

“We have received a number of complaints from small businesses alleging that some of the terms in Fuji’s contracts have caused them significant financial harm,” said ACCC Deputy Chair Mick Keogh.

“Some of the unilateral variation terms allow Fuji to modify contracts by creating new rights and obligations, including increasing prices, without notifying its customers and without giving them any corresponding right to negotiate or reject.

“The ACCC will argue that the unfair terms in these contracts cause a significant imbalance in the rights and obligations of Fuji and the small businesses they contract with,” Keogh said.

“This court action by the ACCC should prompt all other traders in the printing support industry to review their standard form contracts and make any necessary changes to remove unfair contract terms."

The ACCC is seeking declarations that the terms in the existing contracts between Fuji and its small business customers are unfair and therefore void, and an injunction to prevent Fuji from relying on these terms in its current contracts or entering into future contracts that contain those terms.

The ACCC is also seeking an order for a corrective notice, a compliance program and costs.

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Announcing the legal action, the ACCC added:

“Both the ACCC and ASIC are responsible for enforcing the unfair contract terms law in relation to small businesses. ASIC’s role is in relation to financial services. The two agencies work closely, and in this case ASIC delegated its powers to the ACCC to pursue this action.

“Under the Australian Consumer Law, businesses are not prohibited from including or relying on an unfair contract term against consumers or small businesses. Although courts can declare unfair terms to be void and consequently unenforceable, they cannot impose penalties on companies using these unfair terms.

“The ACCC continues to advocate for a change to the Australian Consumer Law to make it illegal for businesses to include or rely on an unfair contract term against consumers, and for the Courts to have the power to impose penalties where businesses use and benefit from unfair contract terms.

Background

“Fuji supplies a range of business products on a lease basis, including photocopiers, scanners and multifunction printers. Fuji also services these products, and supplies software and print management services. Its parent company is Fujifilm Holdings Corporation, based in Japan.

“In some cases, Fuji enters into contracts with small businesses as “principal and/or agent” on behalf of Fuji Xerox Finance Limited, a related body corporate.

“Fuji’s contract terms came to the ACCC’s attention via complaints from small businesses, including a complaint from the Australian Small Business and Family Enterprise Ombudsman, concerning standard form contracts used across the printing industry more generally.”

The attached document below contains the ACCC’s initiating court documents in relation to this matter.

https://www.accc.gov.au/system/files/ACCC%20v%20Fuji%20Xerox_Concise%20Statement.pdf

Fuji Xerox Australia is yet to respond to the allegations.