Australian Communications Network Pty Ltd gives undertakings to the court

The Australian Communications Network Pty Ltd has given undertakings to the Federal Court, Adelaide following Australian Competition and Consumer Commission action.

The ACCC instituted proceedings on Monday, 15 November 2004 against Australian Communications Network Pty Ltd, a seller of telecommunications services, for alleged breaches of the pyramid selling scheme provisions of the Trade Practices Act 1974. 
 
The focus of the ACCC's proceedings is the CAN's marketing system. Independent Representatives pay ACN $548 (including GST) and sell those services to consumers. Independent Representatives also have the right to recruit other Independent Representatives. Those Independent Representatives can receive commissions from their personal customers as well as commissions from customers of Independent Representatives they have recruited. In addition, Customer Acquisition Bonuses are paid on the number of qualified Independent Representatives. ACN has co-operated with the ACCC's investigation and provided substantial information about the operation of the scheme. However, ACN disputes the ACCC's allegation that the ACN scheme is in breach of section 65AAC of the Act.

The ACCC is seeking declarations, injunctions, corrective notices, compliance programs for the companies and the individuals, findings of fact and costs. The ACCC also sought an interim injunction that would prevent ACN from accepting payments from participants, which the ACCC alleges are "participation payments" within the meaning of the pyramid selling provisions of the Act, until the hearing and determination of the matter.

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