Court finds thousands of Fuji printer contracts with small businesses are ‘unfair'

Court finds thousands of Fuji printer contracts with small businesses are ‘unfair'

The Australian arm of international imaging corporation Fujifilm - FUJIFILM BI Australia - has been found by the Federal Court to have engaged in unfair practices with small business who had signed lease agreements for the company’s photocopiers and scanners.

The court declared 38 contract terms used in the agreements were void and unenforceable in a decision that is understood to affect thousands of small businesses currently locked into the contracts.

FUJIFILM BI Australia is understood to have entered into about 34,000 of these contracts since November 2016, with many of these still in force.

The Federal Court decision follows proceedings brought by the Australian Consumer and Competition Commission (ACCC) in 2020 against Fuji Xerox Australia, now known as Fujifilm Business Innovation Australia (FUJIFILM BI Australia), and Fuji Xerox Finance - now Fujifilm Leasing Australia.

The court action followed complaints from small businesses, including one from the Australian Small Business and Family Enterprise Ombudsman, concerning standard form contracts used across the printing industry more generally.

The ACCC alleged that a number of FUJIFILM BI Australia's standard form contracts contained unfair terms. These included expensive termination fees, automatic renewals, limitations on the company's liabilities, unfair payment terms and the right to make unilateral price increases.

The Federal Court has ordered FUJIFILM BI Australia to stop enforcing these terms in current small business contracts and to cease using these terms in 11 types of standard form contracts with small businesses for the next five years. 

The orders apply to 11 types of standard form contracts FUJIFILM BI Australia entered with small businesses for printers and related software.

“We took this court action because Fuji’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,” says 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.”

The Federal Court orders apply only to contracts entered into with small businesses, or those businesses that employ fewer than 20 staff. The ACCC says it is unclear how many of the 34,000 contracts still in force currently affect small businesses.

FUJIFILM BI Australia has been ordered to contact current customers with relevant contracts and ascertain if they are small businesses and make them aware of the orders. The company was also ordered to implement a compliance program and pay part of the ACCC’s costs.

The company supplies a range of business products on leases, including photocopiers, scanners and multifunction printers. FUJIFILM BI Australia also services these products, and supplies software and print management services.

In some cases, FUJIFILM BI Australia enters into contracts with small businesses as ‘principal and/or agent’ on behalf of Fujifilm Leasing Australia, a related body corporate.

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