ACCC issues first proceedings for non-compliance with mandatory button battery standards

Recently, the Australian Competition and Consumer Commission (ACCC) commenced proceedings against City Beach (Fewstone Pty Ltd) for allegedly selling products which did not comply with the ACCC’s mandatory safety and information standards for products containing button batteries. The ACCC is seeking penalties, declarations, injunction relief and costs.

This enforcement action is significant because it is the first time the ACCC has brought proceedings in the Federal Court for non-compliance with the button battery standards. Previously, the ACCC had only issued a series of infringement notices and accepted a court enforceable undertaking and compliance commitments for alleged breaches. City Beach’s conduct is particularly egregious, having received warnings about non-compliance with the information standards by the NSW Office of Fair Trading and the Queensland Office of Fair Trading and then continuing to sell non-compliant products after receipt of those warnings.

The proceedings are a timely reminder that product safety remains a top priority for the ACCC and that the ACCC will take strong enforcement action in appropriate cases. The ACCC’s enforcement priority for FY26 targets consumer product safety issues for young children, especially compliance with button battery standards, and raising awareness about new infant sleep and toppling furniture standards.

Key takeaways for businesses

Businesses should:

• ensure all products they sell that contain button batteries comply with the mandatory safety and information standards – sometimes, it is not obvious that products contain a button battery. In particular: pay close attention to children’s products, which often contain light up components.
• use a reputable provider to conduct testing of samples to ensure products have secure battery compartments and review test reports for accuracy:
• the ACCC considers it ‘may be preferable’ to use an accredited test laboratory: see here
• check the test report to confirm the product(s) ‘passed’ and confirm the conclusions are reasonable/consistent with test results.
• implement training programs, policies and procedures about the importance of complying with the ACCC’s product safety standards, including the risk that businesses may be liable for death or serious injury of customers if products do not comply.
• review processes and contracting processes with third parties – businesses will not be able to rely on assurances from third parties (such as brand owners or manufacturers) that their products comply with product safety standards:
• businesses who sell products to consumers may be considered the ‘supplier’ of goods – and accordingly, must comply with the safety standards (notwithstanding the business may not be the brand owner or manufacturer of the product);
• the Australian Consumer Law (ACL) also prohibits the possession or control of products that do not comply with safety standards.

Businesses should seek urgent legal advice on product safety/recall obligations if supplies of non-compliant products are identified, or if non-compliant products are currently on the retail floor/available online. Businesses should have front of mind that beyond legal compliance, button batteries can cause serious injury or death to babies and young children if ingested. Businesses should move quickly when a potential safety issue is identified.

The ACCC is an active regulator and will investigate businesses for breaches of product safety standards – there are significant costs, time and reputational damage associated with ACCC investigations, including the risk that an investigation about one product escalates to multiple other products.

Last year, new changes were proposed that would:

• allow the ACCC to request certain information and documents to determine whether a supplier or manufacturer is complying with safety and information standards.
• make it easier for the ACCC to recommend overseas safety and information standards that provide an equivalent level of consumer protection.

These changes are not yet law.

ACCC v City Beach

Button battery standards were introduced in 2020 (and became mandatory in 2022) to address the severe risk of death and injury to babies and young children if ingested:

• The safety standards provide that products must be tested to ensure the button battery compartment cannot be opened by young children – it is an offence to supply a product unless a business holds a test report confirming the product complies with the standards.
• The information standards provide that warning labels in the prescribed form must appear on products/instructions to ensure customers keep products containing button batteries out of reach of children.

The ACCC is alleging that City Beach:

• supplied over 57,300 units across 70 different product lines (which included toys, keyrings, lights and light up Jibbitz accessories for Crocs shoes) containing button batteries which did not comply with the mandatory standards;
• did not obtain safety testing for a number of product lines prior to selling them to confirm the button battery compartments were secure, with testing later confirming some of the products were not compliant with the safety standards
• sold a number of products lines that did not have compliant warning labelling;
• continued to sell non-compliant products after:
  • suppliers informed City Beach some products were non-compliant with mandatory button battery standards;
  • subsequent warnings issued by the NSW Office of Fair Trading, the Queensland Office of Fair Trading and the ACCC;
  • issuing voluntary recall notices in relation to some products; and
• did not have any training programs, policies or procedures to comply with button battery obligations prior to August 2023.

City Beach asserted it was unaware of its obligations to comply with the mandatory button battery standards and had relied on its brand owners to ensure each product was compliant. The ACCC’s proceedings indicate businesses cannot rely on assurances from third parties (such as brand owners or manufacturers), to meet product safety standards. This is because:

• businesses who sell products to consumers may be considered the ‘supplier’ of goods – and accordingly, must comply with the safety standards (notwithstanding the business may not be the brand owner or manufacturer of the product);
• the ACL prohibits the possession or control of products that do not comply with safety standards.

City Beach is currently conducting a voluntary recall of the products.

The conduct was first detected by the NSW Office of Fair Trading and the Queensland Office of Fair Trading and were then escalated to the ACCC as part of a national button battery surveillance program, which is run in partnership with State and Territory consumer protection agencies. The ACCC receives information and complaints from a range of sources, which can trigger product safety enforcement – we have seen examples of complaints raised by the ACCC from Facebook groups, TikTok videos and tabloid news outlets.

ACCC enforcement

These proceedings follow a recent uptick in the ACCC’s enforcement in relation to product safety issues. In the 2023/24 financial year, the ACCC undertook 11 product safety enforcement interventions, commenting that this was driven by significant instances of non-compliance with the button battery standards (see page 107 of the ACCC’s 2023/24 Annual Report).

Recent examples of ACCC enforcement action in the product safety space include:

Image credit: Coin cells by Gerhard H Wrodnigg / Wikimedia / CC BY-SA 2.5 / Remixed to B&W and resized