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Clarification on the meaning of “carrying on business within Australia”

Friday, July 13, 2018

In Valve v ACCC the court discussed and defined “carrying on business within Australia” under the Australian Consumer Law (ACL). Valve is a US-based video game retailer accused of misleading or deceptive conduct. To be liable under the ACL, it had to be established that either their conduct occurred in Australia, or that the company carried on business within Australia. While ultimately the court concluded Valve’s conduct occurred within Australia (and so discussion of the term “business within Australia” was immaterial to its findings), the court’s discussion provides some clarification and may well be applied in future decisions.

 

 

 

The court defined carrying on business within Australia as repetitive and continuous “acts within the relevant territory that amount to, or are ancillary to, transactions that make up or support the business.” This definition represents a broad interpretation of the term, and reflects the court’s willingness to maintain a widespread level of application of the ACL so as to uphold its purpose of protecting consumers. Factors such as holding stock-in-trade and other property, having a significant customer base and incurring expenses all within Australia were indicative of Valve carrying on business within Australia, despite its lack of physical presence in the country.

 

 

It is unclear, however, whether or not the stated test would apply to a similar provision under the Corporations Act. The case law has traditionally diverged with respect to the two different statutory instruments (the Corporations Act and the Competition and Consumer Act), so that the Corporations Act has usually required a physical presence in Australia. It remains to be seen whether a court would apply the Valve test to the Corporations Act definition, or instead maintain the stricter definition.

 

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