Print firm in court over 'unfair' contracts

26 October 2020

Australia’s competition watchdog has started court proceedings against printing company Fuji Xerox Australia Pty Ltd over contract terms with small firms.

The Australian Competition and Consumer Commission (ACCC) alleges that nine types of Fuji’s standard form small business contracts contain 173 unfair contract terms, and that they had received complaints from small businesses.

The ACCC is alleging in the Federal Court that there are 31 different terms which are unfair, including automatic renewal terms, excessive exit fees and unilateral price 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, according to the ACCC.

ACCC deputy chair Mick Keogh said the commission had received a number of complaints from small businesses alleging some of the terms in Fuji’s contracts have caused them significant financial harm.

“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,” said Keogh.

The ACCC will argue the contract terms cause a significant imbalance in the rights and obligations of Fuji and the small businesses they contract with. It 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 programme and costs.

In response Fuji Xerox Australia Pty Ltd (FXA) said: “FXA had been cooperating with the ACCC’s investigation and had proposed a number of contract changes to seek to address the ACCC’s concerns. In that context, FXA is disappointed that the ACCC has decided to commence proceedings, which FXA intends to defend.”

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