Yesterday, the Chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, announced the ACCC’s compliance and enforcement priorities for 2021 and the market studies and advocacy work that the ACCC would continue this year.
Mr Sims identified a range of industry sectors, as well as specific competition and consumer law issues that will be the focus of the ACCC’s compliance and enforcement activities for 2021.
- Key sectors the ACCC will be focusing on in 2021 include essential services (particularly energy and telecommunications), financial services, commercial construction and funeral services. The ACCC will also continue its ongoing focus on digital platforms.
- The ACCC will work to improve compliance with consumer guarantees, including advocating for non-compliance with the consumer guarantee regime to be made unlawful. Product safety will be a priority, with Mr Sims noting the new safety standards for button batteries.
- Competition and consumer issues in the context of the COVID-19 pandemic will be prioritised, including those relating to the promotion and sale of products (particularly the cancellation of travel and events) and competition in the domestic air travel market.
- The ACCC will continue to focus on its enduring priorities, particularly cartel conduct. Mr Sims noted that the ACCC expects to bring at least two to three more cartel cases before the courts this year.
The ACCC’s enforcement prorities for 2021
The ACCC will continue to focus on competition and consumer issues in relation to digital platforms. Mr Sims noted that the ACCC will continue to advance its investigations into the practices of the digital platforms in 2021 and will pay particular attention to issues related to digital platform’s use of data, digital advertising technology services and apps to ensure that these are being used in the community’s interest.
As part of this work, the ACCC published its interim report in its Digital Advertising Services Inquiry in January and will publish the second interim report in its Digital Platform Services Inquiry, focusing on mobile app marketplaces, in March this year.
Essential services: electricity and telecommunications
The ACCC will continue to look into the transparency in the pricing and selling practices of essential services, with a focus on energy and telecommunications. Following new prohibitions in the electricity market that require retailers to pass on significant reductions in wholesale electricity costs to consumers, the ACCC will be closely monitoring costs and where necessary asking retailers to justify their prices.
The ACCC will focus on promoting competition in the finance sector, including investigating allegations of anti-competitive conduct. Mr Sims said that the ACCC had important investigations underway and expected to be announcing enforcement outcomes in the coming months.
The ACCC will also work to implement recommendations from the Home Loan Price Inquiry final report which was released by the Treasurer in December 2020, including prompts to alert borrowers to available prevailing rates and reducing the administrative burden on consumers switching home loan providers.
Competition and consumer issues in the context of COVID-19
Competition and consumer law issues in the context of the COVID-19 pandemic will be a priority in 2021. The ACCC will focus on consumer issues related to the promotion and sale of products in the context of the COVID-19 pandemic, including travel and event cancellations. Mr Sims noted that the ACCC had seen a significant increase in the number of consumer complaints it had received in relation to the travel sector.
In terms of competition issues arising in the context of the COVID-19 pandemic, Mr Sims indicated that the domestic air travel market will be an area of focus. Mr Sims noted that competition in the aviation industry remains fragile and that the ACCC will focus on behaviours that adversely affect the competitive process, specifically commenting that it will be monitoring Rex’s plan to enter the major domestic routes and its ability to access slots at Sydney Airport.
Small business: focus on franchising
The ACCC will continue its work to ensure that small businesses, in particular those in the franchise sector, receive protections guaranteed by the competition and consumer laws. Mr Sims said that the ACCC continues to receive reports about misleading representations made by franchisors about franchises, in particular earnings capacity and the use of marketing funds.
Improving compliance with consumer guarantees
The ACCC will prioritise improving industry compliance with consumer guarantees, with a focus on high value goods including motor vehicles and caravans.
Mr Sims noted that the ACCC had received a high volume of motor vehicle consumer guarantee issues in 2020. He said that enforcement action against some dealers which could then be leveraged to achieve broader industry behavioural changes was an ongoing key project.
Mr Sims referred to the recent increased growth in the caravan sector, and the ACCC’s recent proceedings against Jayco Corporation Pty Ltd1, noting that the ACCC will continue to closely monitor complaints and concerns in relation to caravan manufacturers and dealers to ensure compliance with their consumer guarantee obligations.
Mr Sims also mentioned that the ACCC intended to seek legislative reform to make non-compliance with the consumer guarantee regime unlawful.
Product safety: button batteries and quad bikes
The ACCC will work to implement the new button battery safety standards which came into effect in December 2020. These standards require all consumer products to have battery compartments designed so that they are inaccessible to children and avoid injuries and deaths to children through ingestion. Mr Sims noted that for the next 18 months the focus would be on education to promote compliance with these new safety standards.
The ACCC continues to work closely with the States and Territories to monitor for compliance with the new mandatory safety standards in relation to the design of quad bikes. The ACCC will also be involved in education and outreach activities for suppliers in relation to new obligations in relation to the fitting of protection devices and other improvements to the safety of quad bikes.
Last year the ACCC announced that one of its enforcement priorities was taking more action in relation to the ‘concentrated’ funeral sector and Mr Sims noted that competition and consumer issues in the funeral sector would also be a priority this year. Mr Sims announced that it would take targeted action where appropriate, including in relation to businesses using significant market power to bundle services and block new entrants or to engage in unconscionable conduct.
The ACCC will continue to focus on conduct affecting competition in the commercial construction sector, with a focus on large public and private projects and conduct impacting small business. Mr Sims noted that there were a number of enforcement actions in this space last year and there will continue to be more this year.
ACCC priorities for market studies and advocacy for reform
The ACCC confirmed its plans to advocate for changes to Australia’s merger laws this year, which Mr Sims described as being “skewed towards clearance”. Mr Sims noted the inherent uncertainties with the forward looking nature of the merger test and difficulties for the ACCC in proving what is likely to happen in future without the merger. Mr Sims also observed that it appeared that insufficient weight was placed on the risks of potential competition being lost, barriers to entry being raised or competitors being foreclosed. It is not clear at this stage what precise form the proposed changes will take, with Mr Sims stating that the ACCC would be exploring merger reform options. Mr Sims also said that the ACCC would continue to look at proposals being put forward by regulators overseas to amend merger regimes.
Reforms to consumer law
Mr Sims noted the proposed legislative reforms to make unfair contract terms illegal, and said that the ACCC will also advocate for breaches of the consumer guarantees regime to be illegal. The ACCC will also continue to advocate for a new unfair trading practice prohibition which was one of the ACCC’s key recommendations in both its Digital Platforms Inquiry and Perishable Goods Inquiry.
The ACCC will also be advocating for the introduction of a national safety provision.
Reform to the National Access Regime
The ACCC will continue to advocate for reforms to the National Access Regime in Part III of the Competition and Consumer Act to ensure that it meets its objectives of promoting the economically efficient operation,
use and investment in infrastructure. Mr Sims observed that the current regime should be amended to deal with stand-alone monopoly infrastructure.
Inquiries and market studies
Mr Sims referred to the ACCC’s recently concluded inquiries into perishable agricultural goods, the cost of insurance in northern Australia and home loan interest rates. In 2021, the ACCC will continue with its market studies in the electricity and gas sectors.
Mr Sim’s speech to introduce the ACCC’s 2021 Compliance and Enforcement Policy and Priorities is available from the ACCC’s website. A summary of the priorities published by the ACCC is available here.
This alert was prepared with the assistance of Samantha Copeland.
1 ACCC v Jayco Corporation Pty Ltd  FCA 1672.