Heading into the Christmas period is always a festive time at the ACCC. Admittedly service-provider drinks are limited due to the ACCC’s gifts & gratuities policy, Christmas lunch is pay-your-own-way as the Government require it, but the one event ACCC staff always look forward to is the release of its annual report. Combined with its friends at the Australian Energy Markets Regulator, on 18 October 2018, the ACCC released the document detailing its activities over the past year.
You may well ask yourself - what did all 874 employees get up to? Well ask no longer. We are about to tell you just how much they achieved. And if you’re a business, take heed because these successes don’t just stop here.
1. Big name defeats
Apple ($9 million), Telstra ($10 million), Ford ($10 million), Flight Centre ($12.5 million) Cement Australia ($20.6 million) and Yazaki ($46 million) are a few of the big names openly brought to heel in court actions commenced by the ACCC. The ACCC has a big focus on litigation where it deems that the conduct of business fails to meet the standards set by the legislation. And certainly our judiciary agreed. The penalties being ordered by the courts are consistently increasing and the upward trend is only set to continue.
We barely want to repeat this one as we sound like a cliché. So yes, bigger penalties came in for breach of key provisions of the Australian Consumer Law. But the ACCC is not resting on its laurels. It is still out there, waving its (figurative) placards. We anticipate the ACCC will have some success with convincing Government to change the law so that penalties apply in relation to Unfair Contract Terms (see our focus paper here) but the ACCC is also continuing to push for higher penalties for anti-competitive conduct and anything with “significant consumer harm” so that there is a higher deterrent factor for businesses. Notably, other countries in the OECD have penalties which are up to 12 times higher than those applying in Australia and these are often used as a benchmark by commentators on the issue.
3. Not for resale
Beware of preliminary findings and consider whether to go ahead with merger clearances. The ACCC has prevented the sale by Woolworths to BP of its petrol stations within the last year. Many other companies have also withdrawn their requests for merger review after preliminary findings. The key takeaway is to get good advice on your prospects early to save money and disappointment.
4. It’s guaranteed
The ACCC has been focusing on consumer guarantees for a while now and successfully implemented a number of enforcement actions throughout 2018. The annual report is clear that the ACCC will continue to focus on the systemic misrepresentations about the extent of consumer rights under the Australian Consumer Law when it comes to warranty claims. In other words, consumers can always return that imported dodgy foot spa if it doesn’t comply with the consumer guarantees.
The ACCC is in the process of upskilling. Criminal cartel conduct is now well within the ACCC’s capability and a successful prosecution may result in jail time for the perpetrators. Further, with the Harper Review concluded, the ACCC has established a new Substantial Lessening of Competition unit to specialise in the analysis in relation to misuse of market power and concerted practices.
With Rod Sims still holding the reins, the bigger penalties, the upskilling of staff and the increased attention the ACCC is progressively receiving will sooner or later bring an errant business undone. And remember, when you have to pay for your own Christmas lunch, you don’t feel too kindly towards companies that are making their spirits bright at the expense of the ordinary consumer.