Today, Rod Sims, Chairman of the Australian Competition and Consumer Commission (ACCC) launched the ACCC's 2015 Compliance and Enforcement Policy at CEDA in Sydney. This policy provides valuable insight into the ACCC’s enforcement priorities for the year ahead. Past experience indicates that much of the ACCC’s enforcement activity in the immediate future will be in line with the areas identified in the policy.
Many of the priorities are an extension or modification of the priorities identified in the 2014 but there are also some new areas of enforcement focus. Cartel conduct in government procurement, truth in advertising, competition and consumer issues in the medical and health sector and compliance with industry codes are some of the ACCC’s new compliance and enforcement priorities for 2015.
Chairman Rod Sims also noted that the ACCC will continue to advocate and seek to emphasise that the size of the penalties in particular cases must be sufficient to provide appropriate deterrence:
“Some companies think they have a lot to gain from breaching our competition and consumer law; they should have much to lose as well.”
Compliance and enforcement priorities for 2015
The ACCC noted that it is now directing half of its enforcement resources to competition matters and half to consumer matters.
Enduring priorities – Cartels, anti-competitive conduct, misuse of market power and product safety
Cartel conduct, anti-competitive conduct and misuse of market power remain “enduring priorities” for the ACCC alongside product safety.
In terms of cartels, the ACCC noted that in addition to the general focus on detecting and deterring cartels it would focus this year on cartel activity in government procurement. The ACCC has around a dozen in depth cartel investigations under way and has established a new dedicated group exclusively responsible for investigating serious cartel conduct. This group is focused on criminal cartel investigations and is working very closely with the CDPP.
In relation to anti-competitive agreements and practices, the ACCC noted that it had around 20 in depth active investigations underway and that of particular interest in the year ahead was the expected Full Court appeal decisions in relation to ANZ and Flight Centre.
In terms of misuse of market power, the ACCC has about 10 in depth investigations underway and expects judgment to be handed down next week in the Pfizer case.
Highly concentrated sectors
Competition issues in highly concentrated sectors, but specifically supermarkets and fuel, remain a priority for the ACCC. Mr Sims also noted that the Coles unconscionable conduct outcome sets a benchmark for conduct which can be applied to other businesses and other sectors.
Truth in advertising
In relation to truth in advertising, the ACCC noted that it would prioritise those matters where misleading claims are made by large businesses with the potential to result in significant consumer detriment, or where the conduct is likely to become widespread if the ACCC does not intervene.
Medical and health Sectors
The ACCC will give increased attention to competition and consumer issues in the medical and health sector this year noting that it had received allegations in relation to attempts to limit access to products, patients, procedures or facilities as well as allegations relating to unconscionable conduct and misleading and deceptive conduct by medical professionals.
Compliance with industry codes of conduct
The ACCC noted that it will be taking a stronger line to protect small firms by ensuring compliance with industry codes of conduct this year. In particular, the ACCC expects to see enforcement work in the franchising sector and noted that the introduction of a Code of Conduct to address unfair practices in the grocery sector will be a major focus area.
In relation to the franchising sector, the enforcement activity will be aided by changes to the mandatory Franchising Code of Conduct on 1 January 2015, which provided the ACCC with new powers to:
- issue infringement notices of $8,500 for body corporates ($1,700 for individuals and other entities) where the ACCC has reason to believe there has been a contravention of the code, and
- seek penalties of up to $51,000 from the Court for serious breaches of certain Code provisions.
Mr Sims also noted that:
“the new Code provisions also introduce a good faith obligation which will, I am sure, see us involved in some enforcement work in 2015.”
Online marketpalce, carbon tax repeal, scam distribution and vulnerable consumers
The ACCC will continue its focus on scam disruption and issues in the online marketplace concentrating this year on emerging systemic consumer issues such as significant delays by online businesses in addressing consumer complaints about either the product itself or delivery. It will also continue its focus on ensuring that carbon tax cost savings are being passed through to consumers. Reports on this issue are expected in April and July.
The ACCC also noted that it would focus this year’s consumer protection activities on issues affecting indigenous consumers, older consumers, and consumers who are newly arrived in Australia. Mr Sims noted that the ACCC would not hesitate to take appropriate enforcement action against businesses that attempt to exploit these communities for commercial gain.
New program of reviews of selected industry sectors
The ACCC will begin a new program of reviews of selected industry sectors to identify risks to consumers and the competitive process that may require intervention, and possibly to identify and encourage good industry practice. The sectors currently being reviewed include the debt collection industry (particularly in relation to vulnerable consumers) and private health insurance (particularly in relation to the adequacy and transparency of information).
The ACCC has recently been directed by Minister Billson to monitor and analyse fuel markets in a more regular and in-depth way to shine a light on specific fuel markets where prices are relatively high. As well as quarterly reports looking at petrol price movements, the ACCC will conduct in-depth market studies looking at ‘micro’ issues, including analysing the price drivers of petrol in some regional markets.
Other sectors for review are likely to align with the ACCC’s identified enforcement priorities and may include emerging consumer issues in the online marketplace, including for example those associated with systemic market failures; the health sector; or reviews in relation to matters impacting vulnerable consumers such as older people and people who are newly arrived in Australia.
Other key activities
In his CEDA speech, Mr Sims also outlined some of the other key activities and developments for the 2015 including the Harper Competition Review, the ACCC’s role in ensuring privatisation delivers for consumers, improving the functioning of the financial system given the competition focus of the Murray report, ensuring a smooth transition for consumers to NBN services and reviewing water rules to improve outcomes in the Murray-Darling Basin.
In relation to the Harper Competition Review, the competition review panel is expected to shortly hand a final report to Government.
Today's speech given by Chairman Rod Sims at CEDA is available at:http://www.accc.gov.au/speech/priorities-2015 and the Compliance and enforcement Policy is available at: http://www.accc.gov.au/about-us/australian-competition-consumer-commission/compliance-enforcement-policy