Australia's consumer watchdog, the Australian Competition & Consumer Commission (ACCC), is responsible for ensuring compliance with competition, fair trading and consumer protection laws. Each year, the ACCC announces the Compliance and Enforcement Priorities. With the continuing effect and recovery from Covid-19, the ACCC confirmed that it will continue to work on some of the priorities set for last year, while also focusing its attention on various competition and consumer protection matters and unfair practice reforms. This article outlines some of the ACCC's key compliance and enforcement priorities for 2021.
The pricing and selling of essential services will continue to be a strong ACCC focus in 2021 as it continues to pursue enforcement action, particularly in the energy and telecommunications sector.
For example, there is a lot of pressure for electricity retailers to pass on reductions in wholesale electricity costs. This will allow electricity prices to fall considerably, to counter how steeply they have risen over the past few years.
The ACCC will further examine the significant market power of certain leaders in the funeral services industry. It will focus on:
- the effects of bundling services;
- blocking new entrants to the market; and
- engaging in unconscionable conduct in relation to consumers.
In December 2020, the ACCC finalised its Home Loan Price Inquiry and produced a final report. The ACCC will begin to implement some of the recommendations from the report this year.
For example, this includes:
- alerting borrowers to available prevailing rates; and
- lowering the administrative burden on consumers who wish to switch home loan providers.
Travel and Aviation
There is little doubt that Covid-19 had a huge impact on the travel sector. This will likely continue for the rest of the year. Accordingly, an enforcement task force will actively monitor sales practices going forward. In particular, it will look at the risk of businesses making misleading misrepresentations in advertising and marketing material in light of the uncertainty around travel restrictions.
Aviation will also be a key focus. The ACCC will:
- continue to monitor prices, costs and profits within the domestic aviation sector; and
- look more closely for anti-competitive behaviour.
The ACCC will continue to investigate franchise industry practices that are impacting franchisees.
For example, it will enforce protections where there has been a significant breach of the small business protection provisions provided by the Competition and Consumer Act.
Motor Vehicles and Caravans
The ACCC will continue to take enforcement action against certain motor vehicle dealers and caravan manufacturers regarding their failure to comply with consumer guarantees. It aims to achieve broader industry behavioural changes.
The ACCC will continue to focus on supply chain relationships. It will also enforce compliance with the:
- Dairy Code of Conduct;
- Horticulture Code of Conduct; and
- Perishable Goods Inquiry.
In 2021, the ACCC will continue to prioritise compliance with product safety regulations and try to ensure products do not pose serious harm to consumers. In particular, it will look at:
- button battery safety: button batteries cause significant injury and even death if children swallow them. These batteries are used in personal and household products, such as children's toys, hearing aids, lights, watches, remote controls, digital thermometers and bathroom scales. The ACCC addressed the hazards associated with button batteries in 2020 and this became a legal regulation in December. This requires all consumer products to have battery compartments designed in such a way that they are inaccessible to children; and
- quad bikes: 23 people died last year in quad bike accidents due to defective designs. As a result, mandatory safety standards are being rolled out which require quad bikes to be fitted with operation protection devices.
Continuing its investigatory work from last year, the ACCC will look at the practices of digital platforms. This includes ongoing studies into the 'Adtech' and 'apps' markets. The ACCC pursued several high profile court actions last year against some of the most known digital platforms, including Google and Facebook.
Australian Consumer Law
As a business providing goods or services, it is essential that you understand your obligations under the Australian Consumer Law (ACL), including the Competition and Consumer Act 2010 which applies across Australia to protect consumers. These include:
- providing consumer rights and guarantees;
- ensuring that you do not have any unfair contract terms; and
- not engaging in any misleading or deceptive conduct.
The ACL will apply when you and your customer form a consumer contract and your business engages in 'trade or commerce' with 'consumers', as defined under the ACL. The ACL will apply to your customers if they buy goods or services that are either priced:
- at less than $40,000; or
- above $40,000, when the good or service is used for personal, domestic or household consumption.
This threshold will increase to $100,000 from 1 July 2021.
ACCC Enforcement and Penalties
If your business contravenes its ACL obligations, the ACCC has broad enforcement powers and a court may impose a significant penalty. For example, the following penalties have been imposed on companies in recent years by both the court and the ACCC:
- Meriton Property Services Pty Ltd was ordered by the Federal Court to pay penalties of $3 million for manipulating Trip Advisor reviews, in breach of the ACL;
- training college Empower Institute was ordered by the Court to pay $26.5 million in penalties for engaging in unconscionable conduct; and
- Reckitt Benckiser (Australia) Pty Ltd was ordered by the Court to pay $6 million in penalties by the Court for making misleading representations about its Nurofen Specific Pain products.
As well as financial penalties, however, your business may also suffer substantial reputational harm.
Inevitably, the pandemic forced the ACCC to refocus its main compliance and enforcement priorities last year and create new areas for improvement going forward in 2021. This year, the ACCC will focus on a number of key areas, including the funeral and energy sectors, consumer safety and consumer protections. If you are not adhering to the Australian Consumer Law, you put your business at risk of significant reputational damage and financial penalties.