JBH
Jb Hi-fi Limited
ASX
Resolution of ACCC proceedings against The Good Guys
Sentiment:
Regulatory Settlement Announcement
22 June 2025 6:24 PM
JB Hi-Fi's subsidiary, The Good Guys, has reached an agreement with the Australian Competition and Consumer Commission (ACCC) to resolve court proceedings, agreeing to pay a $13.5 million penalty and conduct a customer remediation program.
Worse than expected
The company is required to pay a significant pecuniary penalty of $13.5 million and contribute $200,000 to the ACCC's costs, which represents an unexpected financial outlay.
Summary
- The Good Guys, a subsidiary of JB Hi-Fi Limited, has reached an agreement with the Australian Competition and Consumer Commission (ACCC) to resolve court proceedings.
- These proceedings, initiated by the ACCC in July 2024, concerned the advertising and fulfillment of store credit and StoreCash promotions conducted by The Good Guys between July 2019 and August 2023.
- Subject to Federal Court approval, the agreement includes a pecuniary penalty of $13.5 million and a contribution of $200,000 towards the ACCC's costs.
- Additionally, The Good Guys will conduct a remediation program for affected customers, which has already been accounted for and will not impact the FY2025 statutory result.
Sentiment
Score: 4
Explanation: While the resolution of legal proceedings is positive, the significant financial penalty of $13.5 million and the underlying compliance issues leading to the proceedings represent a negative impact on the company.
Positives
- The Good Guys has reached an agreement with the ACCC, providing a clear path to resolve the court proceedings.
- The cost of the customer remediation program has already been accounted for, meaning it will not negatively impact the FY2025 statutory financial results.
- The company states it takes compliance seriously and worked cooperatively with the ACCC.
Negatives
- The Good Guys is required to pay a significant pecuniary penalty of $13.5 million.
- An additional $200,000 must be paid towards the ACCC's costs.
- The proceedings relate to past conduct concerning advertising and fulfillment of promotions between July 2019 and August 2023, indicating a historical compliance issue.
Risks
- The agreement is subject to Federal Court approval, meaning there is a slight risk it could be rejected or modified.
- Future regulatory scrutiny could arise if similar issues with advertising or promotional practices occur.
- Reputational damage may occur due to the ACCC proceedings and the associated penalty.
Future Outlook
The document does not provide explicit forward-looking statements or guidance beyond the immediate resolution of the ACCC proceedings.
Management Comments
- The Good Guys takes its compliance with the law very seriously and has worked cooperatively with the ACCC to resolve these matters.
Industry Context
This announcement highlights the ongoing focus of regulatory bodies like the ACCC on consumer protection and fair trading practices within the retail sector, particularly concerning promotional activities and advertising claims. It underscores the importance for large retailers, including competitors in the consumer electronics and appliance market, to ensure strict compliance with consumer law to avoid significant penalties and reputational damage.
Comparison to Industry Standards
- The document does not provide specific comparable companies, projects, or results to assess the penalty in the context of global benchmarks.
- However, ACCC penalties for consumer law breaches can vary significantly based on the nature and scale of the contravention, with other large retailers like Volkswagen Australia facing a $125 million penalty for emissions issues and Telstra a $50 million penalty for unconscionable conduct, indicating that $13.5 million is a substantial but not unprecedented penalty for consumer-related breaches.
Stakeholder Impact
- Shareholders will see a financial impact from the $13.5 million penalty and $200,000 in costs, though the remediation program is already accounted for.
- Customers affected by the promotions will benefit from the remediation program.
- The company's reputation may be impacted by the public nature of the ACCC proceedings and penalty.
Next Steps
- The Good Guys and the ACCC will make joint submissions to the Federal Court for approval of the agreed resolution.
- The Good Guys will conduct a remediation program for certain customers.
Key Dates
- July 2019: Start of the period for which The Good Guys' store credit and StoreCash promotions were under ACCC scrutiny.
- August 2023: End of the period for which The Good Guys' store credit and StoreCash promotions were under ACCC scrutiny.
- July 2024: ACCC commenced court proceedings against The Good Guys.
- 23 June 2025: Date of the company announcement regarding the agreement with ACCC.
Keywords
JB Hi-Fi, The Good Guys, ACCC, competition law, consumer law, pecuniary penalty, store credit, promotions, remediation program, retail, consumer electronics
JBH
Jb Hi-fi Limited
ASX
Sector: Consumer Discretionary Distribution & Retail
Filings with Classifications
Worse than expected
22 June 2025 6:24 PM
Regulatory Settlement Announcement
- The company is required to pay a significant pecuniary penalty of $13.5 million and contribute $200,000 to the ACCC's costs, which represents an unexpected financial outlay.
Better than expected
9 February 2025 4:34 PM
Half Year Results
- The company's sales, EBIT, and NPAT all exceeded the prior year's results, indicating a strong financial performance.
Better than expected
9 February 2025 4:32 PM
Half Year Results
- The company reported better than expected sales and earnings growth for HY25, driven by strong customer demand and strategic acquisitions.
Better than expected
30 October 2024 5:50 PM
Annual Results
- The strong FY24 results, exceeding expectations with significant growth in sales and EBIT, indicate better than expected performance.
- The positive Q1 FY25 sales growth across all brands further supports the better than expected results.
Better than expected
30 October 2024 5:43 PM
Sales Update
- Sales growth across all divisions exceeded expectations, indicating strong consumer demand.
Worse than expected
12 September 2024 6:52 PM
Annual Report
- The overall decrease in sales, EBIT, NPAT, and EPS compared to the previous year indicates worse-than-expected results.
Better than expected
12 September 2024 6:41 PM
Annual General Meeting Notice
- JB Hi-Fi's FY2024 results significantly outperformed annual analyst consensus expectations at the start of the financial year, demonstrating better-than-expected performance.
Worse than expected
10 July 2024 8:00 PM
Missing type for ID: 3511
- ASX:JBH announces worse than expected results.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.