14 Mar 2013

Seven main priorities on ACCC's agenda for 2013 - does your business operate in a target area?

by Sara Dennis

Last year, well over half of the ACCC's work was within its priority areas so every business would be well advised to take a moment to consider its current set of priorities.

At the end of last month, the ACCC launched its revised "ACCC Compliance and Enforcement Policy" which provides business with some insight into its areas of focus for the coming year. Last year, well over half of the ACCC's work was within its priority areas so every business would be well advised to take a moment to consider its current set of priorities.

While anti-competitive and cartel conduct remain a key target for the ACCC, businesses which operate online, have standard form contracts, make premium claims (eg. "free range") or operate in the telecommunications, energy and supermarket sectors should prepare to be the subject of increased regulatory focus during 2013.

Summary of ACCC's 2013 priorities

Some of the ACCC's stated priorities for 2013 are new and others represent a renewed focus, but none are likely to come as a surprise to business. On one view, in the competition space, business may not regard the ACCC as having prioritised any particular areas. Notably, in launching the revised Compliance and Enforcement policy, ACCC Chairman Rod Sims stated that "strong enforcement" of competition and consumer laws remains at the top of the ACCC's list of priorities.

Competition focus for the ACCC in 2013

The ACCC will always prioritise regulatory challenges to the existence of cartels, anti-competitive agreements and the misuse of market. However, this year the ACCC has also signalled that it intends to pay particular attention to conduct which may impede emerging competition between online traders or limit the ability of small business to effectively compete in the online environment.

The ACCC is currently engaged in 20-30 investigations into anti-competitive behaviour. While openly acknowledging that these allegations are difficult to prove, the ACCC has renewed its commitment to enforcement. For example, in early February 2013, the ACCC launched proceedings in the Federal Court of Australia against Visa Inc. for breaches of the misuse of market power and exclusive dealing provisions in the Competition and Consumer Act.

Eradicating cartel conduct continues to be a focus for the ACCC and, recently, Rod Sims was keen to note that the Federal Court has awarded $126 million in six cartel matters since 2008. The ACCC appears to remain committed to sending a clear message to business that price fixing, market sharing and bid rigging will not be tolerated.

Business should also take heed of Rod Sims' fleeting reference in a recent speech to the criminal sanctions available to the ACCC for the past (almost) four years for cartel conduct. While noting that criminal charges in this area have not yet been laid, he indicated that the right matter will be pursued "with vigour".

The ACCC's consumer protection priorities

This year, the ACCC has a mix of old and new priorities in the area of consumer protection:

  • Telecommunications and energy sectors. Using the momentum gained from recent cases in which it has successfully challenged marketplace representations regarding technology (including the internet), the ACCC has signalled a continued focus on these sectors.
  • Consumer guarantees. Recent court proceedings instituted against Hewlett-Packard Australia Pty Ltd and a number of Harvey Norman franchisees signal an increase in enforcement activity. Apart from a continued focus on consumer education and prosecuting contraventions, the ACCC has, somewhat curiously, foreshadowed some changes in its activities in relation to consumer guarantees but has not yet provided any details.
  • Unfair contract terms will be examined more closely by the ACCC this year. It has revealed that contracts in a range of sectors including telecommunications, online trading, hire cars and airlines have recently been reviewed and it has given non-compliant businesses an opportunity to amend their standard form contracts.
  • Issues facing consumers online. Recognising the explosion of online markets, the ACCC will continue to monitor this environment with a particular focus on group buying websites and the reliance upon false testimonials and false reviews.
  • Credence (or premium) claims (being claims that suggest a product is superior in terms of its safety, quality or social/moral benefit, such as "free range eggs" or "fat free"). This is a new priority for the ACCC and there will be a particular focus on the food industry. Such claims can be made as long as they are not misleading and can be substantiated.
  • Carbon price claims continue to be monitored since the introduction of the carbon price in July 2012.
  • Consumer protection issues impacting on Indigenous communities.

What action should business take?

In view of the ACCC's clearly stated priorities, it is a timely reminder to business to review their product/service documentation and business practices.

  • If you operate online, in the telecommunications or energy sectors, or engage in door to door, and telephone, marketing practices (unsolicited consumer agreements), review your documentation to ensure compliance with the Competition and Consumer Act.
  • Standard form contracts are under scrutiny, especially if you have an online presence or are involved with hire cars, airlines or telecommunications.
  • Ensure documentation regarding your products and services complies with the consumer guarantee requirements regarding rights to refunds, repairs and replacements (and ensure your staff understand consumers' rights).
  • Ensure that you can substantiate claims made about your products/services, especially if you make a "credence/premium" claim or publish online testimonials/reviews.
  • Be careful if you intend to attribute price increases to the carbon price.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.