The action was begun under the Trade Practices Act 1974 for alleged breaches of section 51 AC of the Act, which prohibits unconscionable conduct. It is based, in part, on existing ACCC Federal Court proceedings against three Allphone directors.

The ACCC alleges Allphones director and CO, Matthew Donnellan, director and COO, Tony Baker, and former national franchising manager, Ian Harkin, have been knowingly concerned -- in or party to -- the contravening conduct.

Under the class action, the ACCC alleges that Allphones received bonus payments from telecommunication networks which were not paid to franchisees in accordance with their franchise agreements; received rebates from mobile phone handset and other product suppliers which were not paid to franchisees in accordance with their franchise agreements; and made unilateral deductions from commission payments payable to franchisees which were not permitted by their franchise agreements.

Under the class action, the ACCC is seeking damages for losses sustained by the represented franchisees which the ACCC alleges flowed from this alleged unconscionable conduct.

In March 2008, the ACCC had began proceedings against Allphones Retail Pty Limited and others alleging contraventions of the Act. Allphones and the other respondents are defending those proceedings which are set down for hearing from March 23, 2010.