Increases to the financial penalties under the Australian Consumer Law (ACL) will come into effect on 1 September 2018 following the royal assent of the Treasury Laws Amendment (2018 Measures No.3) Act 2018 (Act) on 31 August 2018.
Consumer Affairs Australia and New Zealand commenced a review of the ACL in June 2015 (Review). A final report was issued in March 2017. The Review found that the current maximum penalties were insufficient deterrents, with some companies viewing the penalties as a "cost of doing business."
The ACCC has been pushing for increased penalties under the ACL for a number of years, with the Chairman noting in 2016 that there was a "general concern about penalties under the Australian Consumer Law ... not being adequate to give the right amount of deterrence."
In the ACCC's case against a global pharmaceutical company in 2016, the Full Federal Court said that the AU$6 million penalty imposed for ACL breaches was "at the bottom of the appropriate range in all the circumstances of this case". Further, in the ACCC's case against an Australian supermarket chain in 2014, the Court said that "the current maximum penalties are arguably inadequate for a corporation the size of [the Australian supermarket chain]."
What are the changes?
The changes align the existing ACL penalties with the maximum penalties under the competition provisions in the Competition and Consumer Act 2010 (Cth).
The changes are as follows:
|Current law||New law|
|Body corporate||Maximum penalty of AU$1.1 million.||Maximum penalty is the greater of:
|Individuals||Maximum penalty of AU$220,000.||Maximum penalty of AU$500,000.|
What can you expect?
The ACCC is now armed with greater power and flexibility to advocate for higher penalties for breaches of the consumer law. These changes may potentially curb complacent attitude towards non-compliance with the ACL.
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