Under the Competition and Consumer Act 2010, what is the maximum penalty for a corporation engaging in misleading or deceptive conduct?

Q: What is the correct answer to: Under the Competition and Consumer Act 2010, what is the maximum penalty for a corporation engaging in misleading or deceptive conduct?

The correct answer is The greater of $10 million, three times the benefit obtained, or 10% of turnover. Option B correctly states the penalty structure under section 224 of the Competition and Consumer Act 2010. The maximum penalty for corporations engaging in misleading or deceptive conduct is the greater of: $10 million, three times the value of the benefit obtained from the contravention, or 10% of the corporation's annual turnover in the preceding 12 months. This three-tier penalty system ensures proportionate punishment that scales with company size and the severity of the misconduct.

Q: What background knowledge is needed for this Consumer Protection question?

The Competition and Consumer Act 2010 (Cth) replaced the Trade Practices Act and contains Australian Consumer Law provisions. Section 18 prohibits misleading or deceptive conduct, while section 224 sets penalty amounts. The three-tier penalty system ensures deterrence across different company sizes. For real estate professionals, this is particularly relevant as property marketing, price representations, and service descriptions must be accurate. The ACCC actively enforces these provisions, and penalties can be imposed on both companies and individuals involved in contraventions.

Q: What is a good way to remember the answer to this Consumer Protection question?

Remember '10-3-10': $10 million base penalty, 3 times the benefit obtained, or 10% of annual turnover. Think of it as a perfect '10' score in gymnastics - you need the highest of these three options to determine the maximum penalty. When you see penalty questions about misleading conduct, immediately think '10-3-10' and look for the option that matches: $10 million, three times benefit, or 10% turnover. Eliminate any options with different base amounts or percentages.

Q: What exam tip applies to this Consumer Protection question?

Look for the '10-3-10' pattern: $10 million, three times benefit, 10% turnover. Eliminate options with different base amounts ($50M, $25M, $100M) or different multipliers/percentages first.

Q: How does this Consumer Protection concept apply in Australian real estate practice?

A real estate agency advertises properties with misleading price guides, understating likely selling prices to attract more buyers to auctions. If the ACCC prosecutes and the agency made $2 million in additional commissions from this practice, the penalty would be calculated as the greater of: $10 million, $6 million (3 × $2M benefit), or 10% of annual turnover. If the agency's annual turnover was $50 million, the penalty would be $10 million (the highest amount), demonstrating how these penalties can severely impact business operations.

Question

Consumer ProtectionMisleading ConductMEDIUM

Under the Competition and Consumer Act 2010, what is the maximum penalty for a corporation engaging in misleading or deceptive conduct?

Answer Options

A

The greater of $50 million, three times the benefit obtained, or 30% of turnover

B

The greater of $10 million, three times the benefit obtained, or 10% of turnover

C

A fixed penalty of $25 million regardless of circumstances

D

The greater of $100 million, five times the benefit obtained, or 50% of turnover