After a turbulent 12 months which required the ACCC to adjust its 2020 priorities and divert substantial resources to COVID-19 related authorisations and consumer complaints, ACCC Chair Rod Sims has announced the regulator's 2021 enforcement priorities which span pandemic recovery, "unfinished business" with 2020 priorities, enduring focus areas and a number of areas of law reform advocacy.
In his annual speech to the Committee for Economic Development Australia (CEDA) on 23 February 2021, Mr Sims explained what has been occupying the ACCC's attention, and charted a course for the regulator in Australia's post-pandemic economy.
The ACCC will closely monitor competition and consumer law issues in the travel and hospitality sectors relating to COVID-19, as well as in the essential services, digital platform, construction and financial services industries.
It will also continue to push for changes to the merger law to increase the ACCC's ability to block acquisitions that it considers threaten competition and no doubt look to turn the tide of the ACCC's lack of success in court in recent merger cases like TPG Vodafone and Pacific National/Aurizon.
We can also expect to see the ACCC pursue unfair contract term cases once penalties are introduced this year, and the regulator is also keen to take on cases of 'unfair trading' affecting small businesses, continuing its advocacy for an unfair trading prohibition.
Snapshot of the ACCC's priorities
Industries in the spotlight
- Energy
- Telecommunications
- Digital platforms
- Funeral services
- Financial services
- Construction
- Motor vehicles and caravans
- Agriculture
Priority areas
- Consumer and competition law issues relating to COVID-19 – the promotion and sale of products in the pandemic, including travel and event cancellations, and competition in the domestic air travel market.
- Essential services – competition and consumer issues arising from the pricing and selling of essential services
- Commercial construction – large public and private projects and conduct impacting small business.
- Small businesses – ensuring small businesses receive the protections of the competition and fair trading laws, including franchising.
- Mandatory agricultural codes - compliance with the Dairy Code of Conduct and the Horticulture Code of Conduct.
- Enduring priorities – cartel conduct including a pipeline of criminal and civil cases
Market studies & advocacy
- Digital platform services inquiry – interim report due March 2021
- Adtech inquiry – final report due mid-2021
- Murray Darling Basin inquiry - final report due early 2021
- Energy & Gas – ongoing market sector studies
- Part IIIA – the ACCC will lobby for law reform in relation to standalone monopoly infrastructure
- Consumer Guarantees and Unfair Contract Terms – the ACCC will advocate for "deficiencies" in these laws to be addressed
- Merger reform and unfair trading prohibition– stalwarts of the ACCC's advocacy in recent years
Areas of focus
Following a busy year which saw the ACCC grant 28 authorisations for industry cooperation in response to the pandemic, establish its COVID-19 Taskforce, undertake investigations of a handful of airlines and commence proceedings against Lorna Jane in relation to its "Anti-Virus Activewear", in 2021 the ACCC will focus on:
- consumer issues relating to the promotion and sale of products in the context of the pandemic, in particular travel and event/entertainment businesses; and
- competition issues in the context of the pandemic, including in the domestic air travel market.
The ACCC will also focus on conduct in a number of industries, many of were the subject of 2020 enforcement priorities and which, according to Mr Sims, the regulator has "unfinished business" with:
- pricing and selling practices of essential services, with a focus on energy and telecommunications;
- the funeral services sector;
- anti-competitive conduct in the financial services sector;
- digital platforms; and
- conduct affecting competition in the commercial construction sector, with a focus on large public and private projects and conduct impacting small business.
The ACCC will also focus on ensuring compliance with consumer and small business legislation including franchising, consumer guarantees, the "big stick" legislation in the energy sector and mandatory codes of conduct in the agricultural sector.
Enforcement
Enforcement of cartel conduct remains an enduring priority. In 2020, the ACCC/CDPP secured their third criminal conviction. Mr Sims also said the ACCC has a "full slate" of cartel investigations and anticipates "two or three new civil cartel cases or criminal prosecutions to commence this year."
Mr Sims said the ACCC’s permanent Digital Platforms Branch, established in 2020, will also continue to advance its investigations into the practices of the digital platforms in 2021, and that "some more cases will follow."
2021 will also see the hearing of the ACCC's much-awaited case against TasPorts for misuse of market power, the first case run by the regulator under the amended s 46 and its effects test. That case is scheduled for a 3-week hearing commencing 19 April 2021.
Law reform on the horizon
In addition to a packed calendar of market studies and inquiries, Mr Sims flagged a number of areas in which the ACCC will be advocating for law reform including:
- the National Access Regime in Part IIIA of the CCA – Mr Sims said that, in relation to stand-alone monopoly infrastructure, the current regime is not meeting the objective of promoting the economically efficient operation, use and investment in infrastructure by which monopoly services are provided.
This follows an announcement by the Federal Treasurer in February 2020 that the Department of Treasury will be examining whether the length of time that processes under the National Access Regime can take is appropriate and consistent with its legislative objective, and reporting back in the first half of 2021.
- making breaches of the consumer guarantees illegal – which follows the announcement that the unfair contract regime would be amended in 2021 to prohibit contraventions and introduce penalties;
- the introduction of an unfair trading practices prohibition – this has been on the ACCC's radar since the Harper Review in 2015, and will likely become law in the not-too-distant future; and
- rebalancing the merger regime to ensure it is fit for purpose – Mr Sims said "the focus on the counterfactual in many cases risks overlooking the likely anticompetitive effects of the merger itself … [and] insufficient weight is placed on the risks to competition … [with] the net result that our merger control regime is skewed towards clearance". The ACCC is exploring reform options to present to the Government.
Preparing for the year ahead
Australian businesses, especially those which operate in the ACCC's priority areas, should familiarise themselves with the ACCC's agenda and prepare for scrutiny. As has been the trend in recent years, the ACCC will continue working closely with its foreign counterparts in the areas of enforcement (including theories of harm) and policy. Businesses should endeavour to take a proactive approach to engaging with the ACCC’s concerns, ensure that they have robust compliance programs and obtain legal advice where necessary.