In his eleventh and final speech to the Committee for Economic Development Australia (CEDA) on 3 March 2022, outgoing ACCC Chairman Rod Sims outlined the ACCC's areas of particular focus for the year ahead and also fired a warning shot to repeat offenders in the telecommunications and energy sectors.
Those that are in the cross-hairs of the regulator for the coming year include:
- essential service providers;
- digital platforms; and
- payment services.
Sims also used his speech to continue to advocate for merger law reform in Australia. Over the past few years, Sims has argued that Australia's informal merger review model is out of step internationally, and the current legal test restricts the ACCC's ability to prevent anti-competitive mergers. Last year Sims proposed radical changes to re-engineer the merger clearance process. If Sims is successful in agitating for merger law reform, it would fundamentally alter merger clearance in Australia with a mandatory filing regime and a ban on the parties closing the deal until the ACCC has granted clearance on the ACCC legislative reform wish list.
Ultimately, Sims' passion alone will not be enough to force legislative change with the final say coming down to the Commonwealth Government.
Key takeaways at a glance:
The ACCC's agenda for 2022-2023 includes a focus on:
- "Dark Patterns" – manipulative and deceptive advertising and marketing in relation to the digital economy and environmental claims;
- enforcement issues in relation to digital platforms and payment services, from both a competition and consumer perspective;
- continuing the push with industry and government for mandatory notification and waiting periods in relation to merger law reform;
- monitoring key infrastructure including the NBN, airlines and airports, energy and regional telecommunications;
- advocating for large penalties for failure to comply with the consumer guarantees, and prohibiting unfair trading practices (a general law which would aim to capture more conduct); and
- addressing issues arising from the COVID-19 pandemic including supply chain issues and the difficulties faced by consumers in obtaining refunds.
The ACCC has identified the conduct affecting consumers in key industries that it will focus on in 2022 (many of which were the subject of its 2021 enforcement priorities), and which, according to Mr Sims, "will grow in importance". These include:
- consumer and fair-trading issues relating to environmental claims and sustainability;
- manipulative or deceptive advertising and marketing practices in the digital economy;
- pricing and selling practices of essential services, with a focus on energy and telecommunications;
- consumer and fair-trading issues arising from the COVID-19 pandemic;
- improving industry compliance with the consumer guarantees with a focus on high value goods including motor vehicles and caravans; and
- protecting small businesses under the competition and consumer laws, including in agriculture and franchising.
In relation to the pricing and selling of essential services, Mr Sims stressed that the conduct is "disproportionately" impacting "consumers experiencing disadvantage and vulnerability". He acknowledged that there needs to be a better response from telecommunications and energy sector firms and that "more work is required".
Sims also continued his advocacy for an general "across the board" prohibition on "unfair trading" as well as pushing for penalties for not honouring ACL guarantees.
Anti-competitive conduct by digital platforms and financial services remain on the ACCC's radar for another year, with Mr Sims noting that:
- from a digital platforms perspective, the ACCC is concerned that enforcement against digital platforms is merely a game of "whack a mole", and that it is considering whether additional regulatory tools are required; and
- there will be a particular focus on competition in relation to payment services given the accelerated shift from cash to card.
As with previous years, cartel conduct continues to be a priority for the ACCC, particularly off the back of the ACCC's recent successes in relation to the illegal boycott conduct in the construction sector, and guilty pleas received in two cartel proceedings.
The ACCC is also adding to its agenda, a focus on:
- competition in global and domestic supply chains – an issue which has been emphasised by the pandemic; and
- negative impacts on competition as a result of exclusive arrangements by firms with market power in any sector. Mr Sims says the ACCC is particularly concerned about conduct which restricts competition in bottleneck goods or services, and "most favoured nation clauses".
The ACCC will continue to monitor a range of infrastructure work including:
- a consultation process aimed at developing a future NBN regulatory framework;
- mobile coverage and internet speeds in regional areas; and
- prices, costs and profits of domestic airports and domestic airline activity. The ACCC will focus on Rex, and new entrant Bonza's, ability to access permanent slots at Sydney Airport as an area of interest.
Continuing the discussion on merger reform remains a priority for the ACCC in 2022. Mr Sims restated the ACCC's view that the current informal merger clearance system is inadequate, as illustrated by the Virtus/Adora merger, which required the ACCC to seek an urgent injunction in the Federal Court last year.
Preparing for the year ahead
Although there will be a change in leadership, incoming ACCC Chair, Gina Cass-Gottlieb, has confirmed that she intends to take the ACCC's priorities in the same direction.
To prepare for this year's priorities, businesses that operate in Australia should:
- keep an eye out for developments in relation to merger and unfair practices reforms, as well as the Digital Platform Services Inquiry Report which is due to be published in September;
- have a strong factual basis to support any "carbon neutral" or other environmental claims; and
- ensure they have strong compliance programs, and obtain legal advice where necessary.
Firms with market power in any sector should look carefully at any exclusive arrangements – particularly conduct which restricts competition in bottleneck goods or services and "most favoured nation clauses".