NETGEAR Australia Pty Limited - s.87B undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a court-enforceable undertaking from NETGEAR Australia Pty Ltd (NETGEAR) in relation to representations made to Australian consumers about their rights under the statutory consumer guarantees contained in the Australian Consumer Law (ACL) as well as its failure to comply with requirements relating to warranties against defects contained in section 102 of the ACL. NETGEAR has acknowledged that it has contravened sections 102(2)(a) and 102(2)(b) of the ACL and is likely to have contravened sections 18, 29(1)(m) and 29(1)(n) of the ACL. 

NETGEAR

NETGEAR is the Australian subsidiary of NETGEAR, Inc., a public company incorporated in the United States of America. NETGEAR carries on business in Australia as an importer and distributor of computer and networking products.

NETGEAR Inc. provides customer and technical support via phone and through its website (Customer Support Service). The Customer Support Service provides the following support:

• basic technical support, which consists of preliminary support and is free, regardless of when the consumer purchased the NETGEAR product;
• advanced telephone support, which is complimentary within 90 days of purchase or such longer period as circumstances may necessitate from time to time; and
• technical support contracts, which a consumer must purchase in order to receive advanced telephone support following the 90-day complimentary support period.

The relevant conduct

From 1 July 2016 to the date of the undertaking, NETGEAR represented to certain consumers who contacted its Customer Support Service seeking a remedy for a potentially defective NETGEAR product that they were not entitled to a remedy except under the terms of NETGEAR’s manufacturer warranty and/or that consumers outside the 90-day complementary support period were not entitled to a remedy unless they purchased a technical support contract.

During the same period, NETGEAR supplied products with a warranty against defects, the packaging of which did not include all the information required by section 102 of the ACL.

The relevant undertaking

To address the ACCC’s concerns, NETGEAR provided the ACCC with an undertaking pursuant to section 87B of the Competition and Consumer Act 2010 (Cth) that, among other things, it will:

• update its packaging to comply with the requirements contained in section 102 of the ACL;
• update its policies and procedures to ensure clear consideration of Australian consumer rights under statutory consumer guarantees;
• establish and implement an ACL compliance program and mystery shopper program;
• conduct a review of the cases of consumers who purchased a technical support contract in circumstances where their product had or may have had an ACL failure in the period 1 July 2016 to the date of the undertaking; and
• establish a Consumer Hotline for Australian consumers who contacted NETGEAR in relation to a NETGEAR product with a potential ACL failure in the period 1 July 2016 to the date of the undertaking, which was not sufficiently addressed by NETGEAR.