Australian Competition and Consumer Commission v Honda Australia Pty Ltd

Honda Australia historically operated through independent authorised dealers. After a strategic review, it decided to move to an agency model for new vehicle sales, reduce its model line-up and sales volume, and restructure its dealer network. Dealers were divided into those that would remain in the new model and those that would exit.

That commercial change created a practical communications issue. Some exiting dealers stopped operating altogether. Others did not. Three early exit dealers were central to the case: Astoria in Victoria, Tynan in New South Wales and Burswood in Western Australia. Each ceased being an authorised Honda dealer, but each continued operating an independent service centre afterwards.

The ACCC said Honda’s customer messaging went too far. According to the regulator, Honda told customers, in substance, that these businesses had closed and were no longer servicing Honda vehicles, when that was not true. Honda admitted that some of its service reminder messages and some call centre statements did convey those representations.

The judgment is useful because it does not treat the issue as a simple advertising dispute. It explains how Honda’s customer communications were actually built and delivered. Honda held customer data in a centralised platform and used Salesforce Marketing Cloud to send campaigns by email and SMS. A campaign could be directed to a defined audience, such as customers of a particular dealer, customers with a certain vehicle model, or customers approaching a service date.

Journeys were manually configured with rules about who would receive a message and when. For example, a service reminder journey might send communications 30 days before a service was due, 15 days before, and again after the due date if the service had not occurred. Once configured, the sending process was automated. But the content itself was manually uploaded.

Honda also used a call centre managed by an external provider. Call centre staff were given FAQs and scripts supplied by Honda, and Honda supported the provider in delivering those messages. That matters because the case shows that liability can arise from statements made on a business’s behalf through outsourced customer support, not only from formal marketing copy.

For business owners, this is one of the most important parts of the case. The legal problem did not depend on a single press release or headline advertisement. It arose through ordinary operational systems: customer databases, automated reminders, templated content, scripts and frontline responses.

The ACCC alleged that between January and June 2021 Honda contravened section 18 and section 29(1)(j) of the Australian Consumer Law. The alleged representations were that Astoria, Tynan and Burswood would close or had closed, and would no longer service, or were no longer servicing, Honda vehicles.

The regulator’s point was straightforward. Those businesses had ceased to be authorised Honda dealers, but they were not closing and they continued to operate service centres for vehicles, including Honda vehicles. So if Honda’s communications conveyed that they had shut down or could no longer service Honda vehicles at all, the communications were misleading.

Honda admitted that certain service reminder emails and text messages conveyed those representations. It also admitted that, on 17 occasions, call centre staff acting on its behalf made statements with the same effect. The judgment includes examples where callers were told that Astoria was 'closing down' and that Tynan was 'closed'.

The ACCC also challenged other communications. These included certain exit emails sent around the time dealers ceased to be authorised dealers, statements on Honda’s website, and one further call centre communication. Those parts of the case remained contested and the Court had to decide whether they also conveyed the alleged representations.

The legal issue was not limited to whether Honda had accurately described the dealers’ formal status inside the Honda network. The real question was what impression the communications conveyed to ordinary customers in context. A statement can be technically true in one narrow sense and still be misleading if customers would naturally understand it more broadly.

That is why the distinction between 'no longer an authorised Honda dealer' and 'closed' mattered so much. Likewise, there is a real difference between 'no longer an authorised Honda service centre' and 'no longer servicing Honda vehicles'. The first is about authorisation within a branded network. The second is about whether the business can still perform servicing in the real world. Customers may not hear those as the same thing.

The Court also had to decide a narrower but important issue: which communications actually conveyed the alleged representations. Honda admitted some did. The Court then had to determine whether the other disputed emails, website statements and one additional call centre communication also crossed the line.

Finally, the Court had to fix an appropriate pecuniary penalty for the admitted contraventions of section 29(1)(j). The ACCC argued for a range of $7 million to $9 million. Honda argued for a range of $1 million to $3 million. The Court had to determine the proper figure.

Justice Moshinsky recorded Honda’s admissions that the service reminder communications and 17 call centre communications conveyed the alleged representations and contravened sections 18 and 29(1)(j) of the Australian Consumer Law. Those admitted contraventions formed the basis for the penalty decision.

However, the ACCC did not succeed on every part of its case. In relation to the communications that remained in dispute, namely certain exit emails, website statements and one additional call centre communication, the Court concluded that Honda did not contravene sections 18 and 29(1)(j).

On penalty, the Court fixed $5.5 million for the contraventions involving the service reminder communications and $500,000 for the 17 call centre contraventions. That produced a total penalty of $6 million. Those figures were imposed by the Court in the judgment. They are not a compliance recommendation or a suggested benchmark for other cases. They are the actual penalties fixed on the facts before the Court.

The result is therefore mixed in one sense and clear in another. Honda successfully resisted some parts of the ACCC’s broader case, but it was still penalised heavily for the communications it admitted were misleading.

This case is not confined to the motor industry. The same issues can arise wherever a business uses a branded network of dealers, franchisees, agents, authorised repairers, distributors, resellers or service partners. When those relationships change, there is often commercial pressure to move customers quickly to a new network. That pressure can produce over-simplified messaging.

For example, a business may be tempted to say that a former franchisee has closed, that a former authorised repairer no longer services the product, or that customers must now go elsewhere. But if the former network participant still trades independently, still repairs the product, or still offers related services, those statements may overstate what has changed.

The case also shows how risk can spread across systems. A website notice may use one phrase, a service reminder another, and a call centre script a third. If they all point customers toward the same misleading impression, the problem becomes larger, not smaller. Businesses should therefore review the whole customer journey rather than treating each communication in isolation.

Another practical point is that copied templates can be dangerous. The judgment notes that Honda had earlier dealt with Travis Honda, which ceased operating entirely. Communications prepared for a genuine closure can be unsuitable if later reused for a business that is only leaving the authorised network but continuing to trade independently.

Businesses should also remember that outsourced providers do not remove responsibility. If a call centre or service provider is speaking on your behalf using your scripts or FAQs, those statements can still expose your business to ACL claims and penalties.

If your business is changing its network, the safest approach is to describe the change with precision. Say what has actually changed. If a business is no longer authorised by you, say that. If it no longer sells your products as part of your official network, say that. Avoid implying that it has ceased operating altogether unless that is true.

It is also important to review combinations of messages. A customer may receive an email, then an SMS, then call support, then check your website. Even if each message seems defensible in isolation, the combined effect may still be misleading. The Court’s treatment of multiple channels in this case makes that point especially clear.

In practice, businesses should review not only formal announcements but also the less obvious materials that shape customer understanding. These include service reminders, booking prompts, FAQs, dealer locator pages, chatbot responses, call centre scripts, training notes and escalation guides. If a former network participant still operates independently, that fact should be handled carefully and consistently.

This page is based on the Federal Court of Australia decision in Australian Competition and Consumer Commission v Honda Australia Pty Ltd [2023] FCA 1602, dated 15 December 2023. The judgment identifies the restructure from a dealer model to an agency model, the three early exit dealers, the admitted misleading service reminder and call centre communications, the disputed communications, and the penalty outcome.

The reasons for judgment also record that the parties were to provide proposed orders after judgment. A publication check should confirm the entered orders and any costs position if that detail is needed for a final legal file note.