28 February 2019
ACCC Chair Rod Sims this week outlined the Australian Competition and Consumer Commission’s (ACCC) Enforcement and Compliance Priorities for 2019.
The ACCC identified several key focus areas and sectors, being:
More broadly, like many international regulators, the ACCC is grappling with what constitutes a lessening of competition, when does ‘just enough’ consolidation become ‘too much’, and the issue of fairness in business conduct.
The ACCC’s public statement of its priorities occurs each February, and is normally a fairly predictable affair, but we detected a change in tone this year.
In addition to identifying the ACCC’s priority areas (discussed below), the content and tone of the Chairman’s speech suggests a confident regulator planning a step-up in its enforcement activities and prepared to assert its enforcement mandate in areas that have previously been the primary turf of other regulators.
The ACCC has received budgetary boosts in several areas and has established several dedicated and well-resourced units to focus on specific issues – particularly an ‘SLC unit’ to pursue cases under the revised misuse of market power and new concerted practices prohibitions, a Financial Services Competition Branch to complement the ACCC’s market studies work in the sector, and a Commercial Construction Unit.
Mr Sims also confirmed that, during 2019, the ACCC expects to bring:
The ACCC’s message remains that it is prepared to use robust enforcement action as its primary tool to spread the compliance message and it will focus on ever-larger fines to ensure that it is getting the attention of large corporates. In his speech, Mr Sims escalated that rhetoric by referring to his belief that Parliament intended, in recently increasing penalties, that there should be penalties exceeding $100 million for consumer law breaches.
At the same time, the ACCC is looking inward to reflect on its purpose and the nature of the competition and economic standards it enforces. In his speech, Mr Sims traversed issues including levels of trust in market economies and the ACCC’s role in reining-in corporate profit motives.
In relation to mergers, his view is that there is a “current bias to excessive consolidation” and strongly signalled that the ACCC will respond sceptically to arguments related to national champions, investment incentives and economies of scale which “contradict the benefit of competition”. Mr Sims also reflected on whether the bar for establishing a substantial lessening of competition is set too high and in particular too much weight is placed on market forces (e.g. new entry, buyer power) to solve economic problems created by concentration and too much stock is placed in “self-interested” evidence of business executives.
Mr Sims intends that the ACCC will continue its prominent role in advocating for reforms to broaden the reach of competition and consumer laws and other competition policy issues. He sets out eight advocacy priorities, including relating to regulatory regimes that apply to privatised assets, airport and road regulation and unsafe goods.
A particular focus is on the ACCC’s ability to prosecute ‘unfair’ corporate conduct that may fall short of societal norms. The ACCC continues to advocate for a penalty regime for unfair terms in standard form contracts and consideration of a general ‘unfair practices’ prohibition to close perceived gaps between existing provisions voiding unfair contract terms and prohibiting unconscionable conduct.
In addition to the perennial targets – cartel conduct, anti-competitive conduct, product safety, vulnerable and disadvantaged consumers and conduct affecting Indigenous Australians – the following sectors or business activities are in the ACCC’s crosshairs in 2019:
The ACCC has a number of market studies running and will continue monitoring areas such as wine grape production, foreign exchange fees, insurance in Northern Australia, and electricity markets. Consistent with trends in other jurisdictions, all signs are that market studies will remain a core part of the ACCC’s activities, and a key source of ‘leads’ for its enforcement actions.
The ACCC is making progress in its preparation for the introduction of the Federal Government’s proposed Consumer Data Right (CDR). The CDR system will initially apply to the banking sector. The ACCC is drafting rules in relation to its introduction and commenced consultation on the rollout of the CDR in the energy sector this week.
2019 promises to be a busy year for the ACCC, and the domestic and international corporates doing business in Australia under its watch.
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