Substantiating green claims, statements regarding price increases and minority interests in competing companies
In brief
The new ACCC Chair recently spoke at two competition law conferences, and described some of the key priorities for the ACCC for the year ahead.
Key priorities include:
- issuing more substantiation notices (requiring a company to give information and/or produce documents that substantiate a claim or representation), particularly regarding environmental / sustainability claims (e.g. biodegradability claims or claims about carbon emission impacts). The ACCC’s Deputy Chair has also recently noted that the ACCC is actively targeting ‘greenwashing’ (see here) so this is clearly a top priority for the ACCC at present;
- looking closely at the reasons companies give for price increases, and whether there has been false or misleading statements regarding price increases. The ACCC will also continue its interest in prices in key sectors including petrol, electricity and gas; and
- considering ownership of minority interests in competing companies (such as those held by institutional investors) and the risk of concerted practices, particularly in the context of undertaking merger reviews. With common ownership becoming increasingly common, this is an area that is attracting interest from competition regulators around the world.
The ACCC Chair also noted the continuing focus on digital platforms (with the fifth interim report due to be provided to the Government later this month) and the financial services sector, the maintenance of competition in supply chains and the enduring priority of enforcing the prohibitions against cartel conduct.
While the ACCC officially announces its enforcement priorities around February each year, the addresses by Ms Cass-Gottlieb at the Law Council Annual Competition and Consumer Law Workshopand the International Antitrust Law and Policy Conference in September 2022, provide additional insight into the specific areas we can expect the ACCC to focus on in the year ahead.
Key takeaways
Noting some of the key priorities the ACCC’s Chair has highlighted, companies should carefully consider the following, particularly over the next 12 months:
- Substantiation notices: If the ACCC issued a substantiation notice to your business regarding claims you make regarding a particular product or the business more broadly (for example, the company’s green credentials), could you show that the claims are accurate and verifiable? What process does your business undertake to ensure there are reasonable grounds for the claims it makes?
- Price increases: Is your business increasing prices at the moment? If so, what reasons is your business providing to customers regarding the price increase? Are the statements being made to customers accurate and can they be substantiated? Can your company demonstrate that the stated reasons have actually led to the price increase (e.g. via evidence of input cost increases, as well as internal company documents)?
- Minority interests in competing companies: Does your company have minority interests in competing companies, or has it appointed directors to boards of competing companies? If so, how do you mitigate the risk of concerted practices (e.g. collusion) between the competing firms? Are there appropriate protocols in place? For example, are there protocols to ensure that competitively sensitive information is quarantined between competitors?
