ACCC Chairman Outlines Key Enforcement and Compliance Priorities for 2017
Tuesday 4 April 2017 @ 9.47 a.m. | Legal Research | Trade & Commerce
Speaking at a recent Committee for Economic Development of Australia (CEDA) event in Sydney, the Chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims said that 2017 will see its enforcement teams hone in on misleading and deceptive practices, anti-competitive conduct and unfair contract terms affecting small businesses.
The ACCC Chairman was launching the ACCC’s 2017 Compliance and Enforcement Policy, which details the industries and issues the competition and consumer regulator will focus on in the year ahead.
Background
The ACCC has around 65 investigators in each of its competition and consumer enforcement teams, around 40 consumer product safety experts, and around 15 people working on compliance education for consumer and small business.
The ACCC Compliance and Enforcement Policy will prioritise and consider around 500 of the approximately 200,000 reports of potential breaches of the Competition and Consumer Act 2010 (Cth) (the Act) received each year from consumers and businesses. This in turn leads to court action around 30 times per year.
The ACCC will also refer matters to State and Territory Fair Trading Agencies and Ombudsman services. In some cases, police agencies are best placed to handle issues or complaints.
Priorities for the Year Ahead
According to the ACCC Chairman, priorities for the ACCC will be:
- unfair contract terms;
- cartels; and
- misconduct in the health, construction and agriculture sectors.
Reaction and Comment from the ACCC
Mr Sims went on to say:
“The ACCC does a lot of educating and working with businesses, large and small, on compliance with laws that are set up to ensure the market economy runs as it should, to the benefit of living standards and household budgets. Education plays an important role in compliance, but sometimes we need to send a stronger message to businesses. Court action not only helps to sharpen businesses’ focus on what is and isn’t acceptable under the law, but acts as a deterrent to others that may be tempted in a race to the bottom. I can foreshadow that we will have a big focus on unfair contracts in 2017, following the introduction of new laws to protect small business in 2016. What that means is that large companies can no longer have unilateral terms in their standard contracts that put small businesses at a significant disadvantage.”
Previous and Current ACCC Investigations
Mr Sims says cartel conduct is another area in which significant penalties, including jail sentences, can be used as a deterrent:
“Last year [2016], ACCC investigations led to two criminal cartel charges and we have advanced investigations into other alleged cartels. Unfortunately, I fear that only jail sentences for individuals in prominent companies will help to send the appropriate deterrence messages that cartels seriously damage competition and the economy as a whole.”
In his 2017 speech, the ACCC Chairman spoke of businesses engaging in anti-competitive or anti-consumer behaviour and punitive action which the ACCC has brought against them:
“We see companies breaching the Act, or coming very close to it, and too often not, in our view, understanding the seriousness of the issues involved. We believe the current low civil penalties contribute to this. We are seeking to change this, and we are seeing encouraging signs from the courts to assist us. Following an appeal lodged by the ACCC last year [2016], Reckitt Benckiser was forced to pay a revised penalty of $6 million for making misleading representations to consumers. The original penalty was $1.7 million. We believed, and the Full Court agreed, that $1.7 million was manifestly inadequate given the need for deterrence and the impact of Reckitt Benckiser’s conduct on consumers.”
Enforcement in the most popular consumer sectors
The Chairman also said particular areas of enforcement for the Commission in 2017 will be the health and energy sectors:
“We’ve also been working with the private health insurance industry for a number of years to improve compliance with the Australian Consumer Law [ACL]. We have one private health insurer before the courts and I can confirm there will be further enforcement action in 2017.”
Fresh concerns about anti-competitive conduct have led to the establishment of a new Commercial Construction Investigation Unit within the ACCC. Mr Sims said that a newly established team will focus on competition issues in the commercial construction sector across Australia.
The ACCC has also signalled it would broaden the scope of its work in relation to consumer guarantees. In particular, looking at the application of consumer guarantees to both complex products and services. This will include consideration and investigations into practices in the airline, telecommunication and motor vehicle industries.
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Sources:
2017 ACCC Compliance and Enforcement Policy
ACCC names key enforcement and compliance priorities for 2017 - ACCC Media Release 17/17
