31 March, 2020
Beliefs in markets and consumer protection guide the ACCC's investigations and enforcement actions
At an event hosted by the Committee for Economic Development of Australia in Sydney on Tuesday, Rod Sims, Chairman of the Australian Competition and Consumer Commission (ACCC), announced the ACCC's enforcement priorities for 2020. In opening, Mr Sims stressed that the ACCC's approach is informed by its belief in markets, but that it will intervene as necessary where it considers that markets are not effective or consumers may be harmed.
In particular, Mr Sims noted that the ACCC will continue to prioritise actions to prevent cartels, anti-competitive conduct and misleading and deceptive conduct, noting that such conduct causes the most detriment to consumers and that there are commercial incentives for businesses to engage in this conduct.
Mr Sims announced that the ACCC plans to bring at least two more cartel cases before the courts this year, and at least four competition cases.
The ACCC's enforcement priorities for 2020 are:
Digital platforms:
Unsurprisingly, addressing consumer and competition law concerns in relation to digital platforms is a continuing priority for the ACCC this year, following the release of the ACCC's report in mid-2019.
Mr Sims also spoke about the ACCC's continued advocacy in relation to a general prohibition on 'unfair practices', and noted that such a prohibition could be used to take action against platforms that merely host or publish content that breaches consumer law.
The new Digital Platforms branch of the ACCC was also flagged as a means by which the ACCC can acquire and utilise the necessary expertise to respond to and enforce contraventions in the unique and fast-changing digital space. Mr Sims stated that the ACCC hopes to be a proactive regulator in this space, and intends to work closely with international regulators in taking action against digital platforms. For multinational companies, this indicates a need to carefully consider responding to regulator inquiries and investigations on a globally consistent basis, as it can be expected that regulators will share information about investigation and enforcement actions.
Energy and telecommunications
The ACCC will continue to look into misleading and deceptive conduct in the energy and telecommunications industries. Mr Sims noted that, despite many actions in this space over the past few years, there remain problems in these industries that suggest there may be problems in how these markets are operating. Given that the services provided by these industries are essential, the ACCC will continue to bring enforcement action in these industries to improve selling practices.
Misleading conduct in food marketing
As one of its priorities, the ACCC will focus on "health and nutritional claims, credence claims and country of origin" in the context of misleading conduct in relation to the sale and promotion of food products. This is consistent with the recent Federal Court of Australia proceedings instituted by the ACCC against H.J .Heinz Company Australia Pty Ltd. (Heinz). In August 2018, the Federal Court of Australia ordered Heinz to pay penalties of AUD 2.25 million in relation to certain misleading health claims it had made regarding the nutritional benefit of its Little Kids Shredz products. Mr Sims' view was that under the new increased penalty regime for consumer law breaches, this amount would be significantly higher today.
Commercial construction industry
Mr Sims noted that the ACCC's dedicated commercial construction unit will continue to investigate matters in this space, with a focus on large public and private projects and conduct impacting small business.
Small business and franchising
The ACCC will continue to work with the Australian government's franchise taskforce to address issues relating to franchises, including in relation to restrictions on trade. Mr Sims noted that the ACCC will bring a number of cases relating to small businesses and franchises before the courts in 2020.
Dairy industry
Following the commencement of the Dairy Code of Conduct on 1 January 2020, the ACCC will take an active role in educating the industry about the implications of the Code, and will consider taking enforcement action where necessary.
Consumer guarantees
Compliance with consumer guarantee provisions under the ACL remains a key area of focus of the ACCC. Mr Sims noted that the ACCC had received approximately 25,000 reports in relation to consumer guarantees, primarily concerning motor vehicles and whitegoods. It is noted that the focus upon consumer guarantee compliance in the car retailing area has been a priority of the ACCC for a number of years, with the ACCC having released guidance in relation to the issues in its reports entitled "New car retailing industry market study final report" (December 2017) and "Motor vehicle sales and repairs: An industry guide to the Australian Consumer Law" (September 2018).
Product safety
The ACCC will continue to "prioritise product safety issues which have the potential to cause serious harm to consumers", including in relation to button batteries and the Takata airbag recall. In relation to the broader regulatory context, in October – November 2019, the Australian Commonwealth Treasury undertook an assessment and public consultation on behalf of the Commonwealth, States and Territories as to whether a "General Safety Provision" should be introduced to the ACL. The adoption of such a provision has been supported by the ACCC.
Funeral services sector
Mr Sims announced an intention to take more actions in relation to the 'concentrated' funeral sector, in particular in relation to lack of price transparency, misleading and deceptive conduct, hidden fees, unfair contracts and unconscionable conduct. He noted that contravening conduct in this industry is particularly harmful as it impacts customers at a vulnerable time in their lives. This priority mirrors calls for further regulation of the funeral insurance industry, particularly that which is targeted at Indigenous Australians, following the Hayne Royal Commission into Banking and Financial Services.
The ACCC's 2020 Compliance and Enforcement Policy and Priorities is available to download from the ACCC's website. A summary of the priorities published by the ACCC is available here.
Thank you to senior associate, Edwina Tidmarsh and general associate, Holly Ritson for their help in preparing the alert.
For further information, please contact:
Lynsey Edgar Partner, Baker & McKenzie
lynsey.edgar@bakermckenzie.com
