Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd

Solicitor for the Applicant: Australian Government Solicitor

Solicitor for the Respondent: Mid-West Law Practice

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant

AND: OSCAR WYLEE PTY LTD ACN 154 936 526 Respondent

order made by: KATZMANN J DATE OF ORDER: 18 SEPTEMBER 2020

(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

1. Between at least 13 January 2014 and 31 December 2018, by making statements to the effect that for each pair of glasses a consumer purchased from the respondent (Oscar Wylee) it donated another pair of glasses to someone in need and that it made such donations at or around the time of the consumer's purchase in circumstances where between 1 January 2014 and 31 December 2018 Oscar Wylee sold some 328,010 pairs of glasses and donated only 3,181 pairs of glasses, Oscar Wylee has, in trade or commerce: 1.1 engaged in misleading or deceptive conduct, in contravention of s 18 of the Australian Consumer Law (ACL); and 1.2 engaged in conduct that was liable to mislead the public as to the quantity of goods, namely one pair for the customer and one pair to be donated, in contravention of s 33 of the ACL.
2. Between at least 1 January 2014 and 31 December 2018, by representing that it was closely affiliated with Rose Charities, in circumstances where its charitable association with Rose Charities throughout the period was confined to one donation totalling $2000, which it made on 4 February 2014, and the donation of 100 glasses frames, which it made during 2014, Oscar Wylee, in trade or commerce: 2.1 engaged in misleading or deceptive conduct, in contravention of s 18 of the ACL; and 2.2 made false or misleading representations that it had an affiliation with Rose Charities, in contravention of s 29(1)(h) of the ACL. THE COURT ORDERS THAT:
3. Oscar Wylee pay to the Commonwealth of Australia pecuniary penalties under s 224(1) of the ACL, totalling $3.5 million, made up of: 3.1 $2,100,000 in respect of the contraventions of s 33 of the ACL referred to in declaration 1 above; and 3.2 $1,400,000 in respect of the contraventions of s 29(1)(h) of the ACL referred to in declaration 2 above; with such penalties to be paid in four equal instalments of $875,000 as follows: 3.3 the first instalment to be paid within 30 days of the date of this order; 3.4 the second instalment to be paid on or before 15 September 2021; 3.5 the third instalment to be paid on or before 15 September 2022; and 3.6 the fourth instalment to be paid on or before 15 September 2023; save that, if any instalment is not paid on or before the due date, the entire balance remaining unpaid becomes immediately due and payable. BY CONSENT, THE COURT ORDERS THAT:
4. For a period of 6 years from the date of this order, Oscar Wylee be restrained from engaging, in trade or commerce, in conduct that is liable to mislead the public by making statements to the effect that Oscar Wylee is making charitable or philanthropic donations of goods or money in a particular amount or within a particular timeframe, unless: 4.1 it is in fact making those donations in that amount or within that timeframe; and 4.2 throughout that period it retains a written record of the amount and timeframe of the donations.

Annexure A Federal Court finds that Oscar Wylee has breached the Australian Consumer Law The Federal Court has ordered that Oscar Wylee pay $3.5 million in penalties for engaging in misleading or deceptive conduct and making false or misleading representations about its charitable donations and affiliations in breach of the Australian Consumer Law. Oscar Wylee has admitted that, between at least 13 January 2014 and 31 December 2018: it engaged in conduct that was liable to mislead the public that, for each pair of glasses a consumer purchased from Oscar Wylee, it donated another additional pair of glasses to someone in need, in circumstances where Oscar Wylee sold 328,010 pairs of glasses during this period and only donated 3,181 pairs of glasses; and it represented to consumers that it was closely affiliated with the charitable organisation, Rose Charities, in circumstances where Oscar Wylee had only made very limited donations to Rose Charities which ceased entirely in 2014. The Federal Court found that, by engaging in this conduct and making these representations, Oscar Wylee engaged in misleading or deceptive conduct, made false or misleading representations and engaged in conduct liable to mislead the public, in contravention of sections 18, 29(1)(h) and 33 of the Australian Consumer Law.

For further information visit https://www.accc.gov.au/media or call the ACCC Infocentre on 1300 302 502.

Introduction 1 This is a case of misleading conduct by a retailer of optometry services and eyewear. The conduct in question involved the use, as a marketing strategy, of statements to the effect that philanthropic donations are made each time a consumer purchases a pair of spectacles when the facts were otherwise and false representations about its charitable affiliations. The conduct occurred over a lengthy period, from 13 January 2014 until 31 December 2018 (the relevant period). 2 The proceeding was instituted by the Australian Competition and Consumer Commission (ACCC). It began in mid-December 2019 with the filing of an originating application and a concise statement. The ACCC alleged that, by its conduct, the retailer, Oscar Wylee Pty Ltd, contravened ss 18, 29(1)(h) and 33 of the Australian Consumer Law (ACL), which is Schedule 2 to the Competition and Consumer Act 2010 (Cth). 3 Section 18 of the ACL relevantly provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. Section 29(1)(h) provides that a person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation. Affiliation in this context includes a relationship or association. Section 33 provides that a person must not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity of any goods. 4 In its concise statement in response, Oscar Wylee denied the allegations. Programming orders were made in February 2020 and the matter was fixed for a four day hearing to commence on 14 September 2020. Three weeks before the scheduled hearing, however, I was informed that the parties had reached an agreement and that the application would no longer be contested. 5 The parties agreed upon the facts and made joint submissions, both as to Oscar Wylee's conduct and as to orders, including the amount of the pecuniary penalties, a course sanctioned by the Full Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 and approved by the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482.

The facts 6 On the basis of the agreed facts I make the following findings.

Oscar Wylee 7 Oscar Wylee is a proprietary company, registered in Australia. It is an optometry and eyewear retailer that markets and supplies optometry goods and services to consumers in Australia. It commenced operations in September 2012. 8 Until October 2015 Oscar Wylee operated as an online retailer only, and marketed to consumers via its website and social media platforms, including Facebook, Instagram and email newsletters. 9 From October 2015 Oscar Wylee has operated both as an online retailer and through physical stores across Australia. 10 Michael Lim was appointed as an executive director on 28 December 2011 and resigned as an executive director on 4 February 2015. Jack Teoh was appointed as an executive director on 5 February 2015 and ceased being a director on 27 April 2020. Bob Teoh was appointed as an executive director on 1 July 2017 and remains an executive director. John Teoh was appointed as a director on 28 December 2011 and ceased being a director on 12 February 2018. Shane Teoh was appointed as a non-executive director on 3 August 2017 and ceased being a non-executive director on 12 February 2018. 11 Jack, Bob, John and Shane Teoh are brothers. 12 Oscar Wylee profited from the sale of its goods and services throughout the relevant period, as is apparent from the following tables, although its financial position and profitability varied from year to year. The first table shows the revenue and before and after tax profit and loss figures for the first six full-financial years subject to redactions giving effect to a court order: Financial year Total Revenue Profit/(loss) before tax Profit/(loss) after tax 2013/2014 $1,025,420 ($334,912) ($334,912) 2014/2015 $1,100,008 $419,649 $419,649 2015/2016 $2,298,959 ($34,557) ($34,557) 2016/2017 $5,630,975 $74,877 $74,877 2017/2018 XXXXX XXXXX XXXXX 2018/2019 XXXXX XXXXX XXXXX

13 After the 2016/2017 financial year total revenue soared and so did profits. In the 2018/2019 financial year, total revenue more than doubled again but this time there was no corresponding increase in profits. 14 The second table displays total current assets and liabilities over the same period: Financial year Total current assets Total current liabilities 2013/2014 $536,251 $64,919 2014/2015 $593,472 $23,482 2015/2016 $749,041 $174,485 2016/2017 $1,404,079 $207,842 2017/2018 XXXXX XXXXX 2018/2019 XXXXX XXXXX

15 Like most businesses, Oscar Wylee's Australian operations have been affected by the COVID-19 pandemic. In April 2020 none of its stores traded and overall sales were reduced by 95%. One hundred and seventy-three permanent employees and 231 casuals were stood down and seven permanent employees were partially stood down with reduced hours. Twelve stores reopened from May 2020, an additional 36 from 7 May 2020, and yet a further 14 from 12 May 2020. This is all reflected in the monthly national sales figures, the heaviest falls occurring in April with a revival by June. All Oscar Wylee stores outside Victoria are now open. The 18 Oscar Wylee stores in Victoria are open to provide urgent and essential eye care only, in accordance with Victorian Government directives.

Oscar Wylee advertising media 16 From 13 January 2014 up to and including 10 September 2020: (1) Oscar Wylee was the registered owner of the website domain www.oscarwylee.com.au (Oscar Wylee website); (2) Oscar Wylee operated Facebook and Instagram accounts; and (3) Oscar Wylee had control over the content of: (a) the Oscar Wylee website; (b) the Oscar Wylee Facebook and Instagram pages; (c) the Oscar Wylee email newsletters; (d) physical promotional materials, including business cards and in-store booklets, produced by or for Oscar Wylee; and (e) signs used in Oscar Wylee stores. 17 Throughout the relevant period Oscar Wylee's senior management, with the involvement of its directors, were responsible for the marketing activities of Oscar Wylee at all times.

Pair for a Pair Conduct 18 In the relevant period, Oscar Wylee made statements to customers and potential customers as set out in Schedule 1 to these reasons (Pair for a Pair Statements), which could be viewed by consumers during the periods and through the media set out in Schedule 1 in each case. Images depicting examples of the Pair for a Pair Statements as they appeared on various media are included at Schedule 3. 19 These Pair for a Pair Statements included: "Buy a pair, give a pair" "For every pair purchased, a pair is donated to someone in need" "Buying a pair today? As soon as you do, we'll donate a pair to someone in need" 20 The Pair for a Pair Statements were made by Oscar Wylee in trade or commerce and in connection with the supply, possible supply, or the promotion of the supply of Oscar Wylee's optometry and eyewear goods and services. 21 By making the Pair for a Pair Statements Oscar Wylee engaged in conduct that was liable to mislead the public that for each pair of glasses a consumer purchased from Oscar Wylee, Oscar Wylee donated an additional pair of glasses to someone in need, and that it made those donations at or around the time of the consumer's purchase (the Pair for a Pair Conduct). 22 Contrary to those statements, between 13 January 2014 and 31 December 2018 Oscar Wylee did not make donations of glasses equal to the number of glasses that were purchased and it did not have systems or processes in place to facilitate the donation of glasses to people in need in a timely fashion. 23 During the relevant period Oscar Wylee sold a total of 328,010 pairs of glasses. By year the figures are as follows: 16,144 in 2014; 11,772 in 2015; 16,002 in 2016; 67,050 in 2017; and 217,042 in 2018. 24 In 2014 it donated 100 frames (compared with 16,144 pairs of glasses sold). 25 In 2015 it donated no frames (as compared with 11,772 pairs of glasses sold). 26 In 2016 it donated no frames (as compared with 16,002 pairs of glasses sold). 27 In 2017 it donated no frames (as compared with 67,050 pairs of glasses sold). 28 In 2018 it donated 3081 frames (as compared with 217,042 pairs of glasses sold). 29 During the relevant period Oscar Wylee donated a total of 3,181 glasses frames to charities (compared to the total of 328,010 pairs of glasses it sold). 30 After the relevant period, however, between 1 January and 31 December 2019, Oscar Wylee donated a total of 333,404 glasses frames to charities, foundations, hospitals or prisons and a total of $80,000 to charitable causes. 31 On each occasion that Oscar Wylee donated glasses frames, it did so by donating frames without prescription lenses. 32 At the time of making the above donations, Oscar Wylee did not know the prescription requirements for each recipient of the glasses. 33 By engaging in the Pair for a Pair Conduct, Oscar Wylee engaged in conduct that was misleading and deceptive and liable to mislead the public as to the quantity of goods because it made statements that each pair of glasses the consumer purchased would secure two pairs of glasses, one for the consumer and one for a person in need, whereas the true position was that in most instances, the latter pair was not donated within the relevant period. 34 The Pair for a Pair Conduct was a deliberate marketing choice of Oscar Wylee. 35 It was a substantive feature of the Oscar Wylee website and its marketing to consumers. 36 Between 18 January 2016 and 30 May 2018 Oscar Wylee's marketing newsletters containing the statement "For every pair of frames purchased, we distribute a pair to someone in need" (item 10 of Schedule 1) were distributed by Oscar Wylee through email newsletters at least monthly and published on at least 83 occasions. Oscar Wylee's email newsletters had the following numbers of subscribers: as at 21 January 2014, 11,137 subscribers; as at 2 December 2014, 22,457 subscribers; as at 8 January 2016, 25,080 subscribers; as at 6 January 2017, 29,418 subscribers; as at 6 January 2018, 97,498 subscribers; and as at 2 January 2019, 100,331 subscribers.

Rose Charities Representations 37 In February and March 2013 John Teoh corresponded with representatives of Rose Charities International, Australia and New Zealand, regarding the possibility of Oscar Wylee making regular donations to the Rose Charities Eye Clinic in Cambodia. Ultimately, this correspondence led to discussions between John Teoh and representatives of Rose Charities New Zealand, regarding the possibility of Oscar Wylee making donations to Rose Charities New Zealand. 38 In or around March 2013, John Teoh, Michael Lim and various other Oscar Wylee employees travelled to the Rose Charities Eye Clinic in Cambodia and made a video (the I Care Video). The I Care Video promoted Oscar Wylee and its "partnership" with Rose Charities. Oscar Wylee displayed the I Care Video on its website, YouTube, and the Vimeo video streaming platform during the relevant period. 39 As directors of Oscar Wylee, John Teoh and Michael Lim were responsible for the content, production and publication of the I Care Video. 40 In the relevant period, Oscar Wylee made statements to existing and potential customers as set out in Schedule 2 to these reasons (Rose Charities Statements) which could be viewed by consumers during the periods and through the media set out in that schedule in each case. Images depicting examples of the Rose Charities Statements as they appeared on various media are included in Schedule 4. 41 The Rose Charities Statements included: "We have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia", which appeared on the home page of the Oscar Wylee website between at least 15 January 2014 and 29 April 2015; "Oscar Wylee Eyewear works with established partners in developing nations around the world who are committed to making the biggest impact possible with the support we provide. Currently we have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia. See more at http://www.oscarwylee.com.au", which appeared on the I Care Video and was available for viewing on YouTube between June 2013 and January 2019; and "… he just needs some glasses so we, with a bit of help from Rose Cambodia, have made sure he has them", posted on Facebook between 20 March 2015 and at least 25 March 2019. 42 Oscar Wylee made the Rose Charities Statements in trade or commerce and in connection with the supply or possible supply or the promotion of the supply of Oscar Wylee's optometry and eyewear goods and services. 43 By making the Rose Charities Statements, Oscar Wylee represented to consumers that it was closely affiliated with Rose Charities (Rose Charities Representations). 44 The Rose Charities Representations were false or misleading because Oscar Wylee did not have any affiliation with Rose Charities in the relevant period or at any other time. 45 Between April 2013 and February 2014, Oscar Wylee made three monetary donations to Rose Charities New Zealand, totalling AUD4,000, as follows: $1,000 on 22 April 2013; $1,000 on 4 June 2013; and $2,000 on 4 February 2014. These were the only monetary donations made to any Rose Charities entity in the relevant period. 46 By at least 24 June 2013, a director of Oscar Wylee was aware that some of Oscar Wylee's advertising content, concerning its charitable donations and affiliations, contained information and images that were not accurate. 47 In January 2014, John Teoh corresponded with Rose Charities New Zealand about making a further donation to Rose Charities Eye Clinic in Cambodia. 48 Apart from the donation of 100 glasses frames to Rose Charities New Zealand in 2014 (being the donation mentioned in [23] above), no glasses or frames were donated to any Rose Charities entity in the relevant period.

Media enquiries and articles 49 Oscar Wylee was contacted by journalists from Insight Magazine raising queries as to their charitable donations and affiliations on at least 16 January, 31 January and 8 February 2019. 50 In early 2019, Insight Magazine published the following three articles relating to Oscar Wylee's charitable donations and affiliations: an article dated 4 February 2019 entitled "Oscar Wylee's philanthropic claims are called into question; wrongdoing denied"; an article dated 12 February 2019 entitled "Sight For All silent on Oscar Wylee charity claims"; and an article dated 4 March 2019 entitled "Oscar Wylee could fall foul of ACCC; changes its charity claims".

Admissions 51 Oscar Wylee admits that during the relevant period it engaged in the Pair for a Pair Conduct, that such conduct was in trade or commerce, and that on each occasion it engaged in the Pair for a Pair Conduct it thereby: (a) engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL; and (b) engaged in conduct that was liable to mislead the public as to the quantity of goods, in contravention of s 33 of the ACL. 52 Oscar Wylee also admits that during the relevant period it made the Rose Charities Representations, that the representations were made in trade or commerce, and that on each occasion that it made them it thereby: (a) engaged in conduct which was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the ACL; and (b) made false or misleading representations in connection with the supply of its optometry goods or services that Oscar Wylee had a particular affiliation, in contravention of s 29(1)(h) of the ACL. 53 The parties referred to the relevant legal principles which informed the allegations and the admissions. It is unnecessary for me to refer to them. It is sufficient to make the following observations. 54 On the basis of the agreed facts, the admissions were well-founded. Oscar Wylee engaged in conduct which was misleading or deceptive or likely to mislead or deceive throughout the relevant period both with respect to the Pair for a Pair Conduct and the Rose Charities Representations because the statements it made were capable of leading ordinary or reasonable consumers of spectacles to the belief that on each occasion a pair of glasses was sold, a pair would be donated to charity - just as Oscar Wylee had said - when the facts were very different. The effect of the Rose Charities Representations was to describe or imply that Rose Charities was a partner of Oscar Wylee, which implied a continuing, cooperative charitable relationship between the two entities when there was no such relationship. Indeed, there was no relationship at all.

Penalties 55 Civil penalties may be imposed for some, but not all, contraventions of the ACL. Section 224(1) relevantly provides that the court may order a person to pay to the Commonwealth "such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the court determines to be appropriate". The section applies to contraventions of a provision of Pt 3-1, which includes ss 29 and 33. But not to contraventions of s 18. 56 Section 224(2) provides that in determining the appropriate pecuniary penalty, the court must have regard to all relevant circumstances including: (a) the nature and extent of the act or omission and of any consequential loss or damage; (b) the circumstances in which the act or omission took place; and (c) whether the person has previously been found by a court in proceedings under Chapter 4 or Pt 5-2 to have engaged in any similar conduct. 57 Careful attention is "almost always" required to be paid to the maximum penalty for a contravention, not least because the Parliament has legislated a maximum and this invites comparison between the worst possible case and the case at hand so that, balanced with other factors, it is "a yardstick": Markarian v The Queen (2005) 228 CLR 357 at [31]; Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [154]-[155]. 58 In the case of a body corporate, before 1 September 2018 the maximum penalty for each act or omission to which s 224 applied was $1.1 million: s 224(3). Thereafter, the maximum jumped to the greater of the following amounts: (a) $10 million; (b) if the court can determine the value of the benefit obtained from the contravention, three times the value of the benefit; or (c) if the court cannot determine the value of the benefit, 10% of the body corporate's annual turnover during the 12-month period ending at the end of the month in which the act or omission occurred or started to occur. See s 224(3A). 59 So what are the contraventions? 60 Schedules 1 and 2 to these reasons set out the relevant conduct in tabular form. Each time they were read and for the duration of the period the statements and representations were visible, there was a contravention of ss 29(1)(h) and/or 33: Reckitt at [145]. In this case, that means that there were millions of contraventions. It also means that it is difficult to determine the theoretical maximums. In Reckitt, where a similar difficulty arose, the Full Court considered that there was "no meaningful overall maximum penalty" (at [157]) so that the best way to assess penalty was by reference to other factors. 61 Where conduct constitutes a contravention of two or more provisions of the ACL, the contravener is not liable to pay more than one penalty "in respect of the same conduct": ACL, s 224(4). The parties agree that the contraventions of ss 29(1)(h) and 33 arise from wholly distinct conduct, namely the Rose Charities Representations on the one hand and the Pair for a Pair Conduct on the other. Nevertheless, separate acts giving rise to separate contraventions may be so inextricably interrelated that they may properly be regarded as part of the one course of conduct: Australian Competition and Consumer Commission v Yazaki Corporation (2018) 262 FCR 243 at [234]. The Full Court explained in Australian Competition and Consumer Commission v Cement Australia Pty Ltd (2017) 258 FCR 312 at [424] that "the course of conduct principle can be conceived of as a recognition by the courts that the deterrent effect in respect of a civil penalty (at both a specific and general level) is measured by reference to the nature of the conduct for which it is imposed". The principle of sentencing which has been applied to civil penalties is that "[w]here there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality": Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 269 ALR 1; 194 IR 461 at [39] (Middleton and Gordon JJ). As Beach J explained in Australian Energy Regulator v Snowy Hydro Limited (No 2) [2015] FCA 58 at [119], this approach does not convert the maximum penalty for a single contravention into the maximum penalty for a course of conduct; rather, it means that the statutory maximum for a single contravention operates as a guide to Parliament's assessment of the gravity of this kind of wrongdoing. 62 I accept the parties' submission that it is appropriate to group the many contraventions arising from the Pair for a Pair Conduct into four courses of conduct, one for each type of media through which Oscar Wylee separately gave effect to the conduct: the Oscar Wylee website; Oscar Wylee's social media network (Facebook and Instagram); Oscar Wylee's direct emails to consumers (newsletters and order confirmations); and Oscar Wylee's promotional merchandise (business cards and in-store booklets). Likewise, I accept that it is appropriate to group the many contraventions arising from the Rose Charities Representations into three courses of conduct on the same bases. In this instance, Oscar Wylee's website; Oscar Wylee's social media network (Facebook, YouTube, and Vimeo); and Oscar Wylee's in-store signage. 63 The approach to be taken to fixing a civil penalty was described by Allsop CJ in Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015] FCA 330; 327 ALR 540; ATPR ¶42-494 at [6]-[10]. 64 The High Court confirmed in Commonwealth v Director that the principal object of civil penalties is deterrence, both general and specific. That is to say, the penalty should be fixed with the object of deterring the contravener from reoffending and others from following suit. As the Full Court put it in Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; 287 ALR 249; ATPR ¶42-387 at [68], in fixing a penalty the Court must make it clear to both the contravener and the market "that the cost of courting a risk of contravention … cannot be regarded as [an] acceptable cost of doing business" and earlier, at [63], "those engaged in trade and commerce must be deterred from the cynical calculation involved in weighing up the risk of penalty against the profits to be made from contravention". These remarks were approved by the High Court in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [64], [66] (French CJ, Crennan, Bell and Keane JJ). 65 On the question of general deterrence, I accept and endorse the parties' submissions: 76. First, a strong deterrent penalty is required to ensure that consumers are not misled. Advertising campaigns centred around charitable giving are not uncommon throughout the retail sector and have the potential to provide a point of difference and increase sales in an often crowded market. It is axiomatic that the maintenance of a fair, reliable and efficient market depends upon consumers having confidence that they are being given reliable, truthful and accurate information. It is therefore important that businesses recognise this in how they choose to present their goods or services. If misrepresentations in the industry are not seen to attract appropriate penalties, the necessary consumer confidence will be undermined: see ACCC v Coles Supermarkets Australia Pty Ltd (2015) 327 ALR 540, [95]. 77. Second, a strong deterrent penalty is required to ensure that consumer choices are not distorted. The conduct exploited consumers' desire to support charitable causes and sought to enhance the perceived value of Oscar Wylee's goods and services via association with altruistic purposes. This type of conduct is particularly harmful as the representations could not be easily checked or monitored by consumers. There should be no room for the impression that it is worth courting the risk of such contravention (because it may not be detected or because the penalties could be treated as a mere cost of doing business). A strong penalty will prevent any such cynical profit/risk calculus: see Commonwealth v Director, [110]; TPG Internet, [66]; Singtel Optus, [61]- [64]; Reckitt, [149]-[153]. 78. Third, retailers should be left in no doubt as to the costs of non-compliance with the ACL. The imposition of strong penalties in the present case will encourage compliance. It will also send a warning to other businesses that they cannot, by non-compliance, gain a competitive advantage over those [who] do comply: Reckitt, [149]-[152]. 66 It is common ground that there is also a need for specific deterrence as the commercial drivers for the contravening conduct are still present, the conduct was part of a deliberate marketing campaign over a five year period and senior management were directly involved throughout. The fact that the conduct only came to an end after the intervention of the ACCC underscores its importance. 67 The parties jointly submitted that the following penalties would have the appropriate deterrent effect: Course of conduct Contraventions Penalty Pair for a Pair Conduct Oscar Wylee website s 33 $1.4 million Social media network s 33 $300,000.00 Direct emails to consumers s 33 $350,000.00 Promotional merchandise s 33 $ 50,000.00 TOTAL $2.1 million Rose Charities Representations Oscar Wylee website s 29(1)(h) $700,000.00 Social media network s 29(1)(h) $450,000.00 In-Store signage s 29(1)(h) $250,000.00 TOTAL $1.4 million

68 The differences in the total figures for the two kinds of conduct are explained by the fact that the Pair for a Pair Conduct was a more prominent feature of Oscar Wylee's marketing to consumers than the Rose Charities Representations. The differences in the individual figures reflect the estimated differences in exposure to the contravening conduct. 69 The proposed orders envisage that there would be two penalties, one for $2.1 million for the contraventions of s 33 and the other for $1.4 million for the contraventions of s 29(1)(h). This is consistent with the approach taken in Coles in which Allsop CJ imposed a single penalty of $2.5 million for four courses of conduct on the basis that they formed part of a single marketing strategy. I am cognisant of the totality principle, but I agree with the parties that no further adjustment is required. I am certainly not of the view that the total penalty for the related offences exceeds that which is proper for the entire contravening conduct. 70 It is, of course, open to the Court to impose different penalties. In Commonwealth v Director at [46], however, the plurality emphasised the "important public policy involved in promoting predictability of outcome in civil penalty proceedings", and at [58] observed that: Subject to the court being sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and … highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty. 71 I am satisfied of the accuracy of the parties' agreement on the facts and consequences. For the following reasons I am also satisfied that the penalties upon which the parties have agreed are just and appropriate in all the circumstances. In reaching that conclusion I was mindful of the fact that most of the contravening conduct occurred before the significant increase in penalties in September 2018.

Nature, extent and duration of conduct and the circumstances in which it took place 72 By misrepresenting the facts, Oscar Wylee improperly exploited the good nature of consumers to its advantage by contriving to enhance the value of its brand by falsely associating it with altruistic pursuits. As the parties themselves put it: It conveyed to consumers that Oscar Wylee was a socially-conscious company and that, by acquiring goods from Oscar Wylee, a consumer would be indirectly supporting charitable causes. Although there is no evidence before the court in this regard, it is likely that at least some consumers elected to purchase from Oscar Wylee over competing suppliers for that reason. In addition to enriching Oscar Wylee, the conduct was likely to distort consumer choice by causing some socially-conscious consumers to acquire goods from Oscar Wylee when they would have otherwise purchased goods from its competitors. A fair, reliable and efficient market depends upon consumers having confidence that they are being given reliable, truthful and accurate information. By engaging in the Pair for a Pair Conduct and making the Rose Charities Representations, Oscar Wylee has engaged in conduct that tends to undermine this confidence. 73 It was conduct which could not easily be checked or monitored, either by consumers or the regulator. For this reason, the parties described the conduct as "particularly pernicious". 74 The contraventions took place over an extensive period. They were a substantive and prominent part of Oscar Wylee's marketing to consumers. This is apparent from the contents of Schedules 1 and 2. In their submissions the parties selected the following as examples. The Pair for a Pair Statements and Rose Charities Representations were made in multiple forms of online media: the Oscar Wylee website, Facebook, Instagram, and YouTube. The Pair for a Pair Statements were also made in email newsletters sent on at least 83 occasions between 18 January 2016 and 30 May 2018 to between about 25,080 and 97,498 consumers. The I Care Video could be viewed on the Oscar Wylee website, YouTube and Vimeo throughout the relevant period. And the words "in partnership with" accompanied by the Rose Charities logo were displayed on in-store signage between October 2017 and February 2019. 75 I accept the parties' contention that Oscar Wylee's conduct was serious, widespread, and likely to have misled consumers. Counsel for the ACCC described it as virtue signalling, which Wikipedia defines as "a pejorative neologism for the conspicuous and disingenuous expression of moral values with the intent to enhance one's own image".

Other relevant circumstances 76 The Pair for a Pair Conduct and the Rose Charities Representations were part of a strategy designed to attract consumers in a competitive market. Oscar Wylee stood to profit from inducing consumers to purchase its products and still does. It built its reputation by engaging in the contravening conduct, appealing to socially-conscious consumers who wanted to support charitable causes through their purchasing behaviour. Its conduct was a betrayal of that promise. 77 Senior management was directly involved in the conduct throughout the relevant period. Directors of Oscar Wylee were directly involved in the production of the I Care Video. While they did not directly approve the content of most of the Facebook posts containing a Pair for a Pair Statement, directors of Oscar Wylee were responsible for the content of the Oscar Wylee website, Facebook and Instagram pages during the period in which the offending statements and representations appeared there. They were also involved in approving advertising content containing those statements and representations. By at least June 2013 a director of Oscar Wylee was aware that some of the content of the company's advertising concerning its charitable donations and affiliations contained information and images that were not accurate. 78 While the contravening conduct did not cause any direct financial loss to consumers, Oscar Wylee accepts that in all likelihood it did cause harm, in the first place by denying consumers the opportunity to make informed purchasing decisions ensuring that their purchases would support a socially-conscious vendor and indirectly support charitable causes and, in the second, by depriving its competitors of the opportunity of making sales to consumers who were enticed or duped by Oscar Wylee's misrepresentations or misleading conduct into purchasing Oscar Wylee's products and/or services. Furthermore, it deprived purchasers of the satisfaction of knowing that their purchases would make a difference to the lives of others. 79 Before the ACCC's investigation began, Oscar Wylee apparently had no system in place to guard against the occurrence of conduct of this kind. 80 On the other hand, Oscar Wylee has not previously contravened the ACL. Moreover, in the 2019 calendar year, after the ACCC investigation began, it donated a total of $80,000 to charitable causes and over 330,000 frames to charities, foundations, hospitals, and prisons. I accept the submission that these donations are significant for a company of the size of Oscar Wylee and go some way towards mitigating the effect of its contravening conduct. 81 While Oscar Wylee initially defended the action and the agreement was only conveyed to the Court shortly before the trial was due to commence, it is common ground that it cooperated with the ACCC investigation, including by voluntarily providing information in response to ACCC requests, and that its cooperation has been significant. It has also made full admissions, agreed to the making of all appropriate orders, including penalties, and joined in the making of submissions which acknowledge the gravity of its wrongdoing. These matters must be taken into account. The parties submitted that a discount for cooperation in the order of 30% was appropriate and that the discount is reflected in the agreed sums. I accept that a discount for cooperation is justified and that a figure of around 30% is suitable. 82 I was, and remain, troubled, however, by the fact that Oscar Wylee chose not to put on any evidence to explain its behaviour, let alone apologise or identify any measures it may have implemented to guard against a repetition of the contravening conduct. Nevertheless, it was agreed that Oscar Wylee has now established a compliance program and that the offending representations have been removed from all its media. Moreover, the steps it has taken in mitigation perhaps amount to a more eloquent expression of remorse than a statement to the Court. 83 Above all, I am satisfied that the agreed penalties would serve as a real deterrent to Oscar Wylee as well as to others who might otherwise be tempted to behave in a similar way. Specific deterrence "inheres in the sting or burden which the penalty imposes on the contravener": Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at [116] (Keane, Nettle and Gordon JJ). In Coles at [100] Allsop CJ observed that "[s]pecific deterrence demands that a penalty be imposed that bears a real relationship with the profit earned". It is not possible in the present case to quantify the precise benefit derived by Oscar Wylee from the impugned conduct. But as Mr Yezerski for the ACCC pointed out in argument, the amount of the agreed penalties exceeds the company's profits over the relevant period by such a wide margin that any profit will well and truly be disgorged by their payment. There can be no doubt that the penalties are large enough not to be treated either by Oscar Wylee or any other person in a similar position as an acceptable cost of doing business. 84 Having regard to Oscar Wylee's current financial state and the anticipated impact of COVID-19 on its operations in the short to medium term, provision will be made, as requested, for payment by instalments over a three year period.

Declaratory relief 85 The Court's jurisdiction to grant declaratory relief is very wide. It is beyond doubt that the Court has power under s 21 of the Federal Court of Australia Act 1976 (Cth) to make a declaration as of right in a proceeding in which injunctive relief is also claimed and regardless of whether or not an injunction is granted: see, for example, Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 98 (Sheppard J), 106 (Foster J), 109-110 (Hill J); Australian Securities and Investments Commission v Axis International Management Pty Ltd (2009) 178 FCR 485 at [32]-[41] (Gilmour J). The preconditions for the making of declarations are made out: Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-8 (Gibbs J). The question of whether Oscar Wylee contravened the ACL was not a hypothetical one. As the regulator, the ACCC had a genuine interest in raising it. Oscar Wylee, as the contravener and the subject of the proposed declarations, is a proper contradictor. I accept the parties' submission that this is an appropriate case for the grant of declaratory relief, notwithstanding the panoply of other agreed orders. They will record the Court's disapproval of Oscar Wylee's conduct, act as a deterrent to others, and serve to vindicate the concerns of consumers. I am also satisfied that the form of the proposed declarations is appropriate.

Injunctions 86 Section 232(1)(a) of the ACL relevantly gives the Court the power to grant an injunction for a contravention of ss 18, 29 and 33 in such terms as it considers appropriate. The power is wide, not constrained by equitable principles and, while the prospect of repetition is a relevant discretionary consideration, it may be exercised even where there is no reason to apprehend continuing or future contraventions: Valve Corporation v Australian Competition and Consumer Commission (2017) 258 FCR 190 at [224] (Dowsett, McKerracher and Moshinsky JJ). Indeed, that is clear from the terms of s 232(4). An injunction may be granted to mark the Court's disapproval of certain conduct and it may be granted to deter future contraventions: see, for example, SC Johnson & Son Pty Limited v Reckitt Benckiser (Australia) Pty Limited (No 2) [2012] FCA 1362 (Yates J). The purpose of a suitably crafted injunction may simply be "to reinforce to the market place that the restrained behaviour is unacceptable" and, although a declaration may achieve the same result, "so long as it is otherwise appropriate", the making of a declaration is no barrier to the grant of an injunction where it is in the public interest: Australian Competition and Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850; 200 ALR 491 at [217] (Selway J), cited with approval by Black CJ and Finkelstein J in Humane Society International Inc v Kyodo Senpaku Kaisha Ltd (2006) 154 FCR 425 at [24]. 87 In the present case I am satisfied that the terms of the proposed injunction are appropriate. As the parties submitted, the injunction is directly tied to the admitted contraventions and therefore has a close connection to the contravening conduct (Foster v Australian Competition and Consumer Commission (2006) 149 FCR 135 at [35]-[38]); it is designed to deter any repetition of the same kind of conduct (ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248 at 256-7 per Lockhart J; 268 per Gummow J); and it is formulated with precision so that it can readily be obeyed (Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc. [1999] FCA 18; 161 ALR 79 at [26] per French J).

Corrective notice 88 The parties also sought an order that Oscar Wylee publish a corrective notice in an agreed form on the home page of its website and on its Facebook and Instagram pages, to remain on each medium for no less than 30 days. 89 Section 246(2)(d) of the ACL gives the Court the power to make such an order and I consider it appropriate to do so in this case. As the parties submitted, the proposed notices will serve to alert consumers to the contravening conduct and correct any misapprehension on the part of consumers about Oscar Wylee's charitable donations and affiliations. They will also assist in raising public awareness of conduct in breach of the ACL.

Compliance program 90 Section 246(2) of the ACL gives the Court the power to make other non-punitive orders in relation to a person who has contravened provisions in Chapter 2 or 3 of the Act. Section 246(2)(b) enables the Court to make an order for the purpose of ensuring that the person does not engage in the conduct or similar or related conduct during the period of the order and for up to three years afterwards. That includes an order directing the person to establish a compliance program for persons involved in the business designed to ensure that they are aware of their responsibilities and obligations in relation to such conduct. 91 In its originating application the ACCC sought an order that Oscar Wylee establish an ACL compliance program. That step has already been taken, albeit after the ACCC's application was filed. The parties now propose an order requiring Oscar Wylee to undertake an annual review of its program for three years and to ensure that each review is carried out by a suitably qualified, independent compliance professional. This order is plainly within the scope of s 246(2). In Australian Competition and Consumer Commission v Sontax Australia (1988) Pty Ltd [2011] FCA 1202; ATPR ¶42-379 Gordon J made a similar order. Her Honour said at [36] that there must be a nexus between the terms of the compliance program and contravening conduct; the program should set out the steps to be taken with sufficient clarity so that it is able to be performed; and it should be in the public interest that the respondent undertake the program. Each of those requirements is satisfied in the present case.

Costs 92 Oscar Wylee has agreed to make a modest contribution of $30,000 towards the ACCC's costs of the proceeding to be paid within 30 days of the date of the Court's order. In accordance with the parties' wishes I will also make an order to this effect. I certify that the preceding ninety-two (92) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Katzmann.

SCHEDULE 1: LIST OF 'PAIR FOR A PAIR' STATEMENTS MADE BY OSCAR WYLEE Medium Time period over which statement could be viewed by consumers Statement made Concise Statement reference Concise Response reference

1. Website (Homepage -www.oscarwylee.com.au) Between at least 15 January 2014 and 29 April 2015 Buy a pair, give a pair Schedule 1(a) [6(a)]
2. Website (Homepage - www.oscarwylee.com.au) Between at least 19 February 2016 and 5 May 2016 I Care for Eyecare Schedule 1(b) [6(a)] For every pair of frames purchased, we distribute a pair to someone in need.
3. Website (Homepage - www.oscarwylee.com.au) Between at least 2 November 2016 and 24 September 2018 I Care for Eyecare Schedule 1(c) [6(a)] For every pair purchased, a pair is donated to someone in need
4. Website (I Care page - www.oscarwylee.com.au/abo ut/icare) Between at least 28 January 2014 and 8 August 2015 I Care for Eyecare Schedule 1(d) [6(a)] … buy a pair, give a pair. …

SCHEDULE 2: LIST OF ROSE CHARITIES STATEMENTS MADE BY OSCAR WYLEE Medium Time period over which statement could be viewed by consumers Statement made Concise Statement reference Concise Response reference

1. Website (Homepage - www.oscarwylee.com.au) Between at least 15 January 2014 and 29 April 2015 We have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia. Schedule 2(a) [10]
2. Website (I Care page - www.oscarewylee.com.au/ about/icare and www.oscarwylee.com.au/icare.html) Between at least 28 January 2014 and 24 September 2018 …we're funding Lim studying to be an eye surgeon so he can keep taking solutions into his own hands. It doesn't stop there though, he needs better equipment in the clinics, more training for volunteers and more glasses. We're doing what we can to support him, and so are you because with the I Care initiative, a pair of glasses is donated to someone in need - maybe even to one of Lim's patients. Schedule 2(b) [10]
3. Written description appearing with I Care Video on YouTube Between June 2013 and January 2019 Oscar Wylee Eyewear works with established partners in developing nations around the world who are committed to making the biggest impact possible with the support we provide. Currently we have partnered with Rose Charities which helps build sustainable eye care programs in Cambodia. See more at Schedule 2(c) [10]

SCHEDULE 3 This is an image of the Pair for a Pair Statement included at Schedule 1, item 6. This is an image of the Pair for a Pair Statement included at Schedule 1, item 12. This is an image of the Pair for a Pair Statement included at Schedule 1, item 14. This is an image of the Pair for a Pair Statement included at Schedule 1, item 19.

SCHEDULE 4 This is an image of the Rose Charities Representation included at Schedule 2, item 3. 1049354.004.001.0317 This is an image of the Rose Charities Representation included at Schedule 2, item 4.