The ACCC's approach to enforcement remains the same, but it is targeting some new sectors and forms of conduct in 2015.
Cartel conduct, anti-competitive agreements and practices, and misuse of market power are the three enduring priorities of the ACCC's Compliance and Enforcement Policy for 2015, but it will also scrutinise several new sectors and forms of conduct, and is planning more targeted research into certain industries. Consistent with previous public statements and policy positions, the ACCC is again calling for greater penalties (particularly on larger companies).
The ACCC is proud of its recent enforcement record. In his first speech, Mr Sims said that the ACCC should litigate more frequently and take more cases where the outcome is unpredictable. He noted in his speech launching 2015's priorities that "what we achieve in the courts echoes in boardrooms and gives weight to our phone calls, letters, and all the other work we do."
In this context, the ACCC continues its push for greater penalties, referring to market commentary that the $11m penalties handed down on Flight Centre for attempts to fix prices were not sufficient and Justice Gordon's findings that the $10m penalties imposed on Coles for engaging in unconscionable conduct were arguably inadequate, given the companies' revenues and profits.
The ACCC is extending its market review function, having engaged in studies on door-to-door selling practices (2013) and comparator websites (2014). The ACCC recently began monitoring fuel markets more closely and this year will review the debt collection industry (focusing on vulnerable consumers) and private health insurance (focusing on the adequacy and transparency of information). There will be other sectors reviewed in the future, potentially related to the ACCC's ongoing focus on online selling.
A focus this year will be government procurement. The ACCC will be working with a number of agencies to raise awareness about cartels and will help government officers to identify signs of cartel conduct.
More generally, the ACCC has been considering for quite some time whether and how to use its criminal enforcement powers under the Act in an appropriate case. It's also established a dedicated group exclusively responsible for investigating serious cartel conduct which works closely with the Commonwealth DPP – so watch this space.
Misuse of market power
The ACCC's recent enforcement record in this area of law is mixed, but acting against misuses of market power remains a key enforcement priority. A judgment in the hotly contested Pfizer case is expected this month and a case against Visa will be heard later this year. The ACCC has around 10 in-depth investigations into misuse of market power underway.
Anti-competitive agreements and practices The ACCC's mind is focused on the ANZ and Flight Centre appeal decisions and the petrol information sharing case involving Informed Sources and several petrol retailers.
Medical and health sector
In this new priority area, the ACCC is considering the competitive issues raised by attempts to limit access to products, patients, procedures or facilities and allegations of unconscionable and/or misleading and deceptive conduct by medical professionals.
Highly concentrated sectors
Competition and consumer issues in highly concentrated sectors will remain a priority – notably fuel and retail.
Buoyed by the successful outcome in the recent Coles unconscionable conduct case, the ACCC will focus on the conduct of larger companies in their commercial dealings with smaller suppliers. Mr Sims suggested that the Coles case sets a benchmark which the ACCC will be eager to apply in subsequent matters.
Another major focus will be the adoption of the Food and Grocery Industry Code of Conduct, expected later this year.
The ACCC has focused on online issues since 2011 to ensure that online players conform to the same standards as 'bricks and mortar' sellers. This year's focus is on online sellers' delays in addressing consumer complaints about products and deliveries.
Consumer rights and truth in advertising
ACCC enforcement in these areas is likely to focus on misleading claims made by large businesses resulting in significant consumer detriment and the effects of breaches of the Australian Consumer Law on vulnerable communities (recent arrivals to Australia, the elderly and Indigenous purchasers).
Franchisors taking advantage of smaller businesses will be under the microscope, and the ACCC looks like it will use new powers under the Franchising Code to issue infringement notices and seek larger fines. Another target area may be breaches of the Franchising Code's new good faith obligation.
The ACCC will continue to monitor State and Territory Governments' sales processes, focusing on arrangements that limit competition or minimise or avoid appropriate regulation in attempts to boost sale proceeds. The ACCC's significant court defeat after it opposed AGL's purchase of certain assets of Macquarie Generation does not appear to have reduced its appetite for raising concerns of this type.
The ACCC has noted that it will attempt to maintain and foster dynamic competition against the four major banks and will monitor carefully the effects of the opening up of the ASX equities clearing house monopoly to competition.
The ACCC's annual compliance and enforcement priorities tend to marry up with their enforcement practices throughout the year. For example, in February 2014, the ACCC cited "drip pricing" as a major consumer protection concern and issued proceedings against Virgin Australia and Qantas in June that year. It's important to know what's on their list and to assess whether you might be in their sights.
With the Competition Policy Review panel planning to report to Government in the coming months, many of the issues identified by the ACCC and outlined above will come into sharp focus for the legislators. Businesses active in Australia will have to be alert to legislative change on the one hand, and the key areas of ACCC focus on the other. Identifying and responding to both of these challenges will be key elements of compliance efforts and risk mitigation strategies in the coming year.
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 bulletin. Persons listed may not be admitted in all states and territories.