The principles of fixing an appropriate penalty for the conduct...

The principles of fixing an appropriate penalty for the conduct which KGN is deemed to have engaged are broad and outlined in the ACCC’s case against Apple in 2018 (https://www.judgments.fedcourt.gov.au/__data/assets/word_doc/0020/552134/2018FCA0953.docx?v=0.1.1). Those principles are, non-exhaustively:

1. the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission;
2. the circumstances in which the act or omission took place;
3. whether the person has previously been found by a court in proceedings under Chapter 4 or Part 5-2 to have engaged in any similar conduct;
4. the size of the contravening company;
5. the deliberateness of the contravention and the period over which it extended;
6. whether the contravention arose out of the conduct of senior management of the contravener or at some lower level;
7. whether the contravener has a corporate culture conducive to compliance;
8. whether the contravener has shown disposition to cooperate;
9. whether the contravener has engaged in similar conduct in the past;
10. the financial position of the contravener;
11. whether the contravening conduct was systematic, deliberate or covert;
12. whether the contravener made a profit from the contraventions;
13. the extent of the profit made by the contravener; and
14. whether the contravener engaged in the conduct with the intention to profit from it.

To answer your question - is a $10m penalty is possible? Yes, but unlikely for many reasons, and unlikely IMO because:

1. The ACCC have gone for the jugular ($10m) notably on two occasions - against Ford and Coles.
2. Both of those cases involved “unconscionable conduct” (originally an equitable remedy), and is far more egregious than the misleading or deceptive conduct (a remedy exclusive to Australian Consumer Law) deemed to have been engaged by KGN.
3. In the judgment for Coles: “Coles’ misconduct was serious, deliberate and repeated. Coles misused its bargaining power. Its conduct was ‘not done in good conscience’. It was contrary to conscience. Coles treated its suppliers in a manner not consistent with acceptable business and social standards which apply to commercial dealings. Coles demanded payments from suppliers to which it was not entitled by threatening harm to the suppliers that did not comply with the demand. Coles withheld money from suppliers it had no right to withhold. Coles’ practices, demands and threats were deliberate, orchestrated and relentless. Coles’ conduct was of a kind which merits severe penalty. But for Coles making the admissions it has now made and acknowledging the gravity of its contravening conduct, the conduct and circumstances in which it was committed would have warranted imposing penalties at or close to the maximum the law permits.”
4. The tone of the judgment against KGN (https://www.judgments.fedcourt.gov.au/__data/assets/word_doc/0004/589684/2020FCA1004.docx?v=0.1.1) is a stark contrast to the tone of the judgment against Coles.
5. Applying the principles from the judgment against Apple, by comparison to its current size, KGN was a far smaller company at the time, and surely could not have profited so substantially over the 3 day coupon promotion.
6. Loss and damage to the consumer? Nil IMO - they got a bargain because KGN sell goods below market value and before any further coupon discount is applied .

My punt is a penalty closer to $1m than 10. However, factoring the horrors I’ve seen in Court, I can say the penalty is as predictable as the stock market without knowing all the facts.

Next steps: By 1 August, parties to file draft proposed orders for timetabling a hearing as to penalties. By the time the penalty is announced, SP will be $25 + and any drop will be a storm in a teacup for current holders.