On 19 February 2015, ACCC Chairman, Rod Sims, launched the ACCC's 2015 Compliance and Enforcement Policy (Policy). The Policy sets out the ACCC's priority areas for 2015 and factors that will be taken into account by the ACCC when deciding how best to direct its enforcement resources.
Priority areas are selected based on a wide range of factors including whether the conduct is of significant public interest or concern or results in significant consumer or business detriment, whether the conduct affects disadvantaged or vulnerable consumer groups and whether the conduct involves concentrated markets which impact small businesses, as well as new or emerging consumer and competition issues.
In announcing its enforcement priorities, Mr Sims warned that the ACCC will seek larger penalties in the year to come to ensure that "businesses know the consequences for crossing the line" stating that:
"Some companies think they have a lot to gain from breaching our competition and consumer law; they should have much to lose as well."1
As an indication of the penalty amounts the ACCC may be seeking, Mr Sims stated that the $11 million penalty against Flight Centre was 'immaterial' and the $10 million penalty against Coles was 'inadequate'.
Consistent with previous years, the ACCC again emphasised in this year's Policy that some forms of conduct are so detrimental to competition and consumer welfare that they will always be a priority. These are:
- cartel conduct – the ACCC currently has approximately twelve in-depth cartel investigations and has established a team dedicated to investigating serious cartel conduct, including working with the Commonwealth Director of Public Prosecutions for criminal cartels.
- anti-competitive agreements and practices – the ACCC currently has approximately twenty in-depth active investigations on top of existing proceedings before the Federal Court including the ANZ and Flight Centre appeal decisions, proceedings against Informed Sources and large petrol retailers, the penalty decision for the Cement Australia case and the hearing of the secondary boycott case against the Construction, Forestry, Mining and Energy Union.
- misuse of market power – in addition to proceedings against Visa and Pfizer, the ACCC indicated that it has approximately ten misuse of market power investigations underway and are keen to add to this list; and
- product safety issues – concerns include product recalls, misleading representations of product safety and sourcing finished goods from countries with lower production costs at the potential expense of product quality and safety.
For 2015, the ACCC has identified new enforcement priorities as well as a number of priorities continuing from 2014.
NEW PRIORITY AREAS
- Truth in advertising
The ACCC has received a number of complaints relating to misleading advertising or claims. The ACCC will continue to investigate such claims in 2015 and, in particular, it will prioritise complaints against large businesses where total public detriment may be significant.
- Health and medical sectors
The ACCC has observed an increase in competition and consumer concerns in the medical and health industries. The ACCC has received complaints alleging attempts to restrict access to facilities, procedures or patients, for example, as alleged in the Little Company of Mary proceedings in the Federal Court. The ACCC has also received complaints concerning unconscionable and misleading and deceptive conduct by medical professionals.
In line with this enforcement priority, the ACCC has also commenced a review of the private health insurance industry in relation to the level of transparency and adequacy of information provided to consumers.
- Cartel conduct in government procurement
As part of the ACCC's continued interest in cartel conduct, the ACCC will focus on cartel conduct in the context of government procurement. The ACCC's efforts will also include raising awareness about cartels for procurement agencies and government officers, anti-corruption bodies, and the police.
- Industry Codes
The ACCC indicates that it will take a stronger stance against breaches of the newly amended Franchising Code of Conduct (Code), particularly given its new powers under the Code to issue infringement notices (of $8,500 for companies and $1,700 for individuals) and seek penalties (of up to $51,000) for serious breaches.
Additionally, the ACCC has stated that it will also be prepared to enforce the Code of Conduct for the grocery sector which will be introduced shortly.
- Product safety
The ACCC referred to product safety as being a long term priority, highlighting the 2014 recall of Infinity electrical cables which potentially affected 40,000 homes. In response to concerns, the ACCC's area of focus in 2015 will be the sourcing of finished goods from countries with lower production costs that may potentially be at the expense of product quality and safety. The ACCC will be seeking to ensure that manufacturers, importers, distributors and retailers manage the quality assurance of consumer products that they procure and supply.
- Vulnerable and disadvantaged consumers
The ACCC will also be focusing on particular conduct aimed at taking advantage of vulnerable groups, such as older consumers, indigenous consumers and those newly arrived in Australia from different cultural and linguistic backgrounds.
PRIORITY AREAS CONTINUING FROM 2014
- Highly concentrated sectors
The ACCC has indicated that it will continue its focus on the supermarket and fuel sectors. In particular, the ACCC will monitor the fuel sector more closely under its new petrol direction from Minister Billson that was introduced in December 2014.
- Online market place
In 2014, the ACCC identified 'drip pricing' as a priority area. 'Drip pricing' occurs when charges, additional to the advertised headline price, are incrementally disclosed to consumers as they progress through the online purchase process. In 2014, the ACCC commenced proceedings against Jetstar and Virgin for engaging in drip pricing. Continuing with its focus on online purchases, the ACCC has indicated that in 2015, its focus is to improve the responsiveness of online businesses to customer complaints.
- Carbon tax repeal
The ACCC will continue to ensure that carbon tax cost savings are being passed through to consumers.
- Scam disruption
This year, the ACCC will seek to identify dating and romance scams through online dating sites.
CONCLUSION
The ACCC's new Policy is a valuable benchmark for businesses to review their existing policies and practices. In particular, where the business operates in one of the ACCC's new areas of focus, a review can shed light on potential areas of improvement and may assist the business in avoiding ACCC enforcement action.
Footnote
1Speech by Sims R, ACCC Chairman, ACCC's Complaint and Enforcement Policy, Committee for Economic Development of Australia, Sydney (19 February 2015).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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