Australia: Covid-19 – ACCC Compliance and Enforcement Priorities in 2021
Yesterday the chairman of the Australian Competition and Consumer Commission (ACCC), Rod Sims, announced the ACCC compliance and enforcement priorities for 2021 and the market research and advocacy work the ACCC would pursue 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 ACCC’s compliance and enforcement activities for 2021.
Key points to remember
- Key sectors that ACCC will focus on in 2021 include essential services (particularly energy and telecommunications), financial services, commercial construction and funeral services. ACCC will also continue to focus on digital platforms.
- The ACCC will work to improve compliance with consumer guarantees, including advocating that non-compliance with the consumer guarantee regime be made illegal. Product safety will be a priority, Mr. Sims noting the new safety standards for button cell batteries.
- Competition and consumer issues in the context of the COVID-19 pandemic will be a priority, including those related to the promotion and sale of products (especially cancellation of trips and events) and competition on the domestic air transport market.
- The ACCC will continue to focus on its continuing priorities, in particular the conduct of cartels. Mr. Sims noted that the ACCC plans to take at least two to three more cartel cases to court this year.
ACCC application prorities for 2021
The ACCC will continue to focus on competition and consumer issues related to digital platforms. Mr. Sims noted that ACCC will continue to advance its investigations of digital platform practices in 2021 and will pay particular attention to issues related to the use of data, digital advertising technology services and applications. by the digital platform to ensure that these are used for the benefit of the community.
As part of this work, ACCC released its interim report in its survey of digital advertising services in January and will release the second interim report in its survey of digital platform services, focused on the markets of mobile applications, in March of this year.
Essential services: electricity and telecommunications
The ACCC will continue to focus on transparency in pricing and sales practices for essential services, with a focus on energy and telecommunications. Following new electricity market bans that require retailers to pass significant reductions in wholesale electricity costs on to consumers, the ACCC will closely monitor costs and, where appropriate, ask retailers to justify their prices.
The ACCC will focus on promoting competition in the financial sector, including investigating allegations of anti-competitive conduct. Mr Sims said the ACCC has major investigations underway and is expected to announce the results of the enforcement in the coming months.
The ACCC will also work to implement the recommendations of the Home Loan Price Survey final report that was released by the Treasurer in December 2020, including prompts to alert borrowers of available going rates and reduce the administrative burden on consumers switching home loan providers.
Competition and consumption 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. 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 ACCC has seen a significant increase in the number of consumer complaints it has received regarding the travel industry.
Regarding competition concerns arising in the context of the COVID-19 pandemic, Sims said the domestic air transport 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 behaviors that undermine the competitive process, noting that it will monitor Rex’s plan to enter major routes. and its ability to access slots at Sydney Airport. .
Small business: focus on franchising
The ACCC will continue to work to ensure that small businesses, especially those in the franchising sector, enjoy the protections guaranteed by competition and consumer laws. Mr. Sims said the ACCC continues to receive reports of misleading statements made by franchisors about franchises, particularly earning power and the use of marketing funds.
Improve respect for consumer guarantees
The ACCC will prioritize improving industry compliance with consumer warranties, with a focus on high-value goods, including motor vehicles and trailers.
Mr Sims noted that the ACCC had received a large number of warranty issues from consumer motor vehicles in 2020. He said enforcement action against certain dealerships that could then be exploited to achieve broader behavioral changes. in the industry was a key ongoing project.
Mr Sims discussed the recent surge in growth in the trailer industry and the recent ACCC lawsuit against Jayco Corporation Pty Ltd1, noting that the ACCC will continue to closely monitor complaints and concerns about caravan manufacturers and dealers to ensure compliance with their consumer warranty obligations.
Mr. Sims also mentioned that the ACCC intends to push for legislative reform to make it illegal to violate the consumer guarantee regime.
Product safety: button and quad batteries
The ACCC will work to implement the new button cell battery safety standards that came into effect in December 2020. These standards require that all consumer products have battery compartments designed in such a way that they are inaccessible to children and to prevent injury and death of children by ingestion. Mr. Sims noted that for the next 18 months, the focus would be on education to promote adherence to these new safety standards.
The ACCC continues to work closely with states and territories to monitor compliance with new mandatory safety standards with respect to ATV design. The ACCC will also be involved in supplier education and awareness activities regarding new obligations related to the installation of protective devices and other improvements to the safety of quads.
Last year, ACCC announced that one of its enforcement priorities was to take more action on the “concentrated” funeral industry and Mr. Sims noted that competition and consumer issues in the funeral sector would also be a priority this year. Mr Sims said he would take targeted action where appropriate, including with respect to companies using significant market power to bundle services and block new entrants or engage in abusive behavior.
ACCC will continue to focus on conduct affecting competition in the commercial construction industry, with an emphasis on large public and private projects and conduct affecting small businesses. Mr. Sims noted that there were a number of enforcement actions in this area last year and there will be even more this year.
ACCC priorities for market research and reform advocacy
The ACCC has confirmed its intention to advocate this year for changes to Australia’s merger laws, which Sims called “bias in favor of authorization.” Mr. Sims noted the uncertainties inherent in the forward-looking nature of the merger test and the difficulties for the ACCC to prove what is likely to happen in the future without the merger. Mr. Sims also noted that there appeared to be insufficient emphasis on the risks of losing potential competition, raising barriers to entry or excluding competitors. At this point, it is unclear exactly what form the proposed changes will take, with Sims saying ACCC will explore merger reform options. Sims also said the ACCC will continue to review proposals from overseas regulators to change merger regimes.
Consumer law reforms
Mr. Sims noted proposed legislative reforms to make unfair contract terms illegal, and said the ACCC will also advocate that breaches of the consumer guarantee regime be illegal. The ACCC will also continue to advocate for a new ban on unfair trading practices which was one of the ACCC’s key recommendations in its digital platforms investigation and perishable goods investigation.
The ACCC will also advocate the introduction of a national security provision.
Reform of 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 Law to ensure that it meets its objectives of promoting economically efficient functioning,
use and investment in infrastructure. Mr. Sims noted that the current regime should be changed to deal with stand-alone monopoly infrastructure.
Inquiries and Market Research
Mr. Sims referred to the ACCC’s recent surveys of perishable agricultural products, the cost of insurance in northern Australia and mortgage interest rates. In 2021, ACCC will continue its market research in the electricity and gas sectors.
This alert was prepared with the help of Samantha Copeland.