The Federal Court has ruled that 38 contract terms entered into
by Fujifilm Business Innovation Australia and Fujifilm Leasing Australia with thousands
of small businesses are unfair.
The Australian Competition and Consumer Commission (ACCC) brought the action to Court in 2020 and has now declared the 38 contract terms are void and unenforceable.
Contract terms deemed unfair by the Court included those providing automatic renewal, excessive exit fees and unilateral price increases.
It also ordered Fujifilm Business Innovation to stop enforcing the terms in current small business contracts for printers and related software and to cease using the terms in 11 types of standard form contracts with small businesses for the next five years.
Additionally, Fujifilm Business Innovation is required to contact current customers with relevant contacts, verify if they are a small business – a business with less than 20 employees, according to the Court – and notify them of the orders. Information about the orders also needs to be published on its website.
Fujifilm was also ordered to implement a compliance program and pay part of the ACCC’s costs.
The service provider admitted that the terms were unfair and consented to the Court’s declarations and decisions.
“We took this court action because [Fujifilm Business Innovation's] unfair contract terms allowed this large company to leverage the significant power imbalance between it and small business customers to impose unnecessary and unjustifiable terms on these businesses,” said ACCC deputy chair Mick Keogh.
“Fuji’s unfair contract terms were imposed on many small businesses who had signed contracts containing these terms and Fuji took action, including litigation, to enforce these terms.
“We continue to strongly advocate for law reform to prohibit unfair contract terms and enable the Court to impose penalties in cases where such terms are imposed and enforced against small businesses, as here, or consumers.”
According to the ACCC, Fujifilm Business Innovation has entered into, or renewed, approximately 34,000 contracts since November 2016, with the “vast majority” using its standard form contracts that, for the most part, are still in force.
“It is not known how many of these contracts were with small businesses, although it is likely this is a substantial number of these contracts,” the ACCC said.
The allegations against Fujifilm Business Innovation's contract terms started in October 2020, with the ACCC taking the then-named Fuji Xerox to the Federal Court, which, at the time the case was introduced, claimed that there were nine types of standard small business forms contained 173 unfair contract terms.