The Chair of the Australian Competition and Consumer Commission (ACCC), Ms Gina Cass-Gottlieb detailed the regulator’s annual compliance and enforcement priorities for 2023-24 in a speech at the Committee for Economic Development of Australia (CEDA).
While the regulator’s enduring priorities (including on cartel and anti-competitive conduct and product safety) remain, its attention is increasingly on areas that have been acutely impacted by current pressures to the Australian economy, consumers and business. In particular, these priorities are reflective of:
- increasing consumer vulnerability due to the rising cost of living
- changes to technology, the increasing reliance on digital services and platforms, and the associated risks and vulnerabilities to consumers.
Key areas to watch in the coming year include:
- the introduction and enforcement of new laws which prohibit unfair contracts
- the regulator’s growing focus on unsubstantiated claims made about the environmental credentials and sustainability of products
- the focus on anti-competitive conduct in sectors that play a key role in the cost of living, including energy and telecommunications.
Priorities
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- Essential services: Energy and telecommunications
- Digital platforms and scam protection
- Unfair contract terms
- "Greenwashing": Environmental claims and sustainability
- Financial services sector
- Manipulative or deceptive advertising in the digital economy
- Consumer guarantees and small business protections
- Exclusive arrangements
- Enduring priorities: Cartel conduct, product safety and conduct impacting First Nations Australians
Essential services: Energy and telecommunications
Rising cost-of-living pressures, including the prices of essential services such as energy and telecommunications, are a key area of the ACCC’s focus for the upcoming year.
The regulator’s focus in this area includes combatting:
- anti-competitive conduct that reduces competition and choice, or that contributes to rising prices; and
- misleading representations that undermine the ability of consumers to make properly informed choices.
In her speech, Ms Cass-Gottlieb drew attention to the actions the regulator brought last year in the telecommunications industry, and to the regulator’s role in enforcing the government's emergency price cap on the sale of wholesale gas by producers, as examples of its crucial role in this space.
Digital platforms and scam protection
Competition and consumer issues relating to digital platforms have long been on the regulator’s radar having released its fifth interim report for the Digital Platform Services inquiry in November last year.
The report contains a number of recommendations to counter harms from digital platforms to Australian consumers, business and competition, targeting in particular:
- tactics and strategies used by digital platforms which distort consumer choice and result in consumers agreeing to unfair or unfavourable contract terms
- increases in digital scams
- anti-competitive conduct by large digital platforms.
The ACCC has also identified protecting the community against scams as a separate priority. Currently the ACCC Scamwatch works to identify and spread information about scams to government and industry. Looking forward the ACCC will support the establishment of the government’s National Anti-Scams Centre, announced in October 2022.
Unfair contract terms
Later this year, new laws prohibiting unfair contract terms will come into effect. Having long petitioned for these changes, and with the ACCC's mandate to enforce compliance, it is unsurprising that this is a priority area for the upcoming year.
Key changes to the unfair contract terms legislation include that:
- where previously unfair contract terms could only be declared void, they are now prohibited and their use may attract penalties; and
- the protections have been expanded to cover a broader range of small business. Businesses with fewer than 100 people or with a turnover of less than $10 million per annum will be afforded the protections.
These changes considerably expand the application of these provisions. For those who have not acted already, businesses using standard form contracts should be reviewing their contracts for unfair contract terms to ensure compliance with the new laws, coming into force in November 2023.
"Greenwashing": Environmental claims and sustainability
Environmental claims and sustainability are increasingly considered by consumers and business when making purchases. As a result, the ACCC is increasingly concerned about and focused on the use of broad, unsubstantiated claims by businesses to promote products as being environmentally friendly.
A recent report from the ACCC revealed that 57% of businesses it reviewed had made "concerning" claims about their environmental credentials, with the highest proportion coming from the cosmetic, clothing and footwear, and food and drink sectors. The use of certifications in ways that may mislead consumers will also be on the ACCC's radar.
The report is only the beginning of the regulator's work in this space, with a new internal taskforce having been established that will focus on sustainability.
The rise of environmental and sustainability claims made by businesses has become a priority for a number of regulators (not just the ACCC), as demonstrated by ASIC recently commencing its first proceeding in respect of alleged greenwashing conduct against Mercer. ASIC has alleged Mercer made misleading statements and engaged in conduct that could mislead the public about the sustainability of some of the superannuation investment options offered on its website, in breach of its obligations under financial services law (discussed further in this article).
Financial services sector
The ACCC has confirmed it remains a priority to ensure the financial services sector stays competitive and that any anti-competitive conduct within the industry is addressed. The regulator has recently commenced an inquiry into retail deposit markets, which will examine matters including:
- how interest rates are set for credit products
- the role of deposits in a bank's funding
- which factors effect consumer decisions in these markets; and
- the impediments that prevent consumers from changing between products.
In her address, Ms Cass-Gottlieb referred to the ACCC’s proceedings against Mastercard alleging misuse of market power in respect of the supply of debit card acceptance services (following similar action against Visa) as an example of its role in this sector.
Manipulative or deceptive advertising in the digital economy
The ACCC’s focus will remain on manipulative and deceptive practices in connection with digital services. Recently, attention in this area has turned to posts made by influencers on a range of platforms including TikTok, Snapchat, YouTube, Facebook, and Twitch, where relationships or affiliations between the influencer and featured products have not been disclosed.
Consumer guarantees and small business protections
Continuing from previous years, the ACCC’s focus remains on assisting and empowering consumers to enforce their rights, particularly where a product or service is faulty and in relation to high-value goods, including motor vehicles and caravans.
Indicating the view that the current consumer guarantee regime should be enhanced, Ms Cass-Gottlieb stated that changes should be made to render a breach of a consumer guarantee illegal and prohibited under the Australian Consumer Law, going beyond the current regime of where consumers' rights may be limited to repairs, replacements or compensation.
Similarly, the ACCC’s focus will also remain on ensuring that small businesses receive the protections afforded under competition and consumer laws and small business industry codes of conduct.
Exclusive arrangements
The anti-competitive harm that can arise from exclusive arrangements remains a priority for the ACCC following its enforcement action in the Federal Court last year against Peters Ice Cream, where Peters was ordered to pay a $12 million penalty, and a three-year competition law compliance program undertaking, after it admitted to engaging in exclusive dealing in respect of the distribution of single-serve ice creams sold in petrol stations and convenience stores nationally.
Enduring priorities: Cartel conduct, product safety and conduct impacting First Nations Australians
Recognising that children are particularly vulnerable to harm from unsafe products, the ACCC has committed to continuing to address product safety issues for young children.
As examples of work the regulator has done in this space to date, Ms Cass-Gottlieb referred to the recall of 43 unsafe children’s products in the last year along with the introduction of the world’s first mandatory standard for button batteries.
Cartel investigations will continue to remain a priority for the regulator following a number of successful prosecutions in the last 12 months.
The ACCC will also expand its current work in relation to First Nations Australians, expanding this program to metropolitan areas with a focus on misleading and deceptive conduct and scams.
Ensuring compliance
It is clear the ACCC intends to continue to be active in its approach to compliance and enforcement in addition to seeking further reform to expand competition and consumer protection laws in key areas.
With the maximum penalties for corporations increasing to whichever is greater of $50 million and 30% of annual turnover, the consequences of failing to ensure compliance have never been greater in terms of penalties, in addition to the costs (internal and external), business interruption and reputational damage to a business.
For further information or advice about any of the above areas please contact Lander & Rogers' Regulatory & Investigations team, who can assist with proactive compliance advice, compliance training and responding to regulatory inquiries and enforcement.
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