Cost of living takes centre-stage: ACCC releases its 2024-25 priorities

As we enter the third year of Gina Cass-Gottlieb's appointment as Chair of the Australian Competition and Consumer Commission (ACCC), the regulator's Compliance and Enforcement Priorities for 2024-25 signal a continuing emphasis on certain key areas from previous years: cost of living vulnerabilities, sustainability and the digital economy. Those factors are said to be the “key challenges” facing Australian communities, and they have shaped the ACCC’s priorities accordingly.

In brief, over the coming year the ACCC intends to:

• address business conduct that contributes to, or takes advantage of, cost of living pressures faced by consumers, including misleading conduct in relation to essential goods and services, and pricing behaviours in the supermarket industry;
  
  
• persist in its focus on misleading sustainability claims, as well as product safety issues associated with sustainability-oriented goods;
  
  
• grapple with the ever-evolving digital economy, including misleading targeted advertising, online comparison tools and influencer marketing;
  
  
• step up enforcement activities in relation to unfair contract terms and consumer guarantees – two areas the ACCC considers contraventions to be particularly prevalent; and
  
  
• actively pursue its enduring priorities, including cartels, anti-competitive conduct, scam detection and prevention, product safety, conduct impacting First Nations Australians, and the protection of small businesses and disadvantaged Australians.

As was the case last year, the Chair’s speech did not touch on recent discussions and activity on reforms to Australia’s merger control regime.[1]

Cost of living

Identified as a key economic challenge facing Australians for the foreseeable future, cost of living concerns are a common thread throughout this year’s priorities. The Chair noted that rising prices leave Australian consumers particularly vulnerable to the effects of anti-competitive conduct.

Providers of essential goods and services are in focus. The ACCC will have an increased focus on misleading representations in relation to the price, features or benefits of essential products. Related to this is the recently announced 12-month price inquiry into the supermarket sector, initiated by the Government, which will examine ‘supermarket pricing practices and the relationship between wholesale prices, including farmgate prices received by farmers, and retail prices paid by consumers to supermarkets’. This is a re-run of a similar inquiry conducted in 2008. The ACCC issued its issues paper in early March 2024.

Maintaining momentum off the back of recent market inquiries into the gas and financial sectors, the ACCC is prioritising enforcement of new price-cap regulations in the gas market, while pushing for transparency reforms to address what it sees as a surge of overly complex deposit interest rate products in the retail banking market. A theme that emerges from the Chair’s speech is a concern with products that are marketed and packaged in a way that is confusing to consumers and that inhibits their ability to properly differentiate between alternatives.[2]

Sustainability

The ACCC is continuing its campaign against greenwashing, as it pursues multiple investigations into conduct detected last year in its ‘internet sweep’ of misleading environmental and sustainability claims. In December 2023, it released principles-based guidance relating to such claims.[3] Recent subjects of successful enforcement action range from a misleading claim that yoghurt packaging is made from “100% ocean plastic”, to false statements that superannuation investment options excluded investments in companies with carbon-intensive activities. Similar cases can be expected in 2024.

The ACCC’s watchwords are that claims should be: ‘accurate’, ‘substantiated’, and ‘aligned with the understanding of the ordinary and reasonable consumer’. Businesses should take those specific considerations into account in designing their collateral, preparing explanatory materials, and verifying data. Additionally, this year the ACCC will take particular interest in the use of third-party marks and certifications which (expressly or implicitly) seek to communicate a product’s sustainability bona fides.[4]

Critically, and in a very welcome development for all companies seeking to assist the energy transition in particular, the ACCC intends to issue guidance in relation to how the ACCC will assess public benefits in authorisation applications that focus on the transition to net zero and other sustainability initiatives. We recommended this step be taken in order to advance these initiatives last year. According to the ACCC’s analysis, in recent years, one in four conduct authorisations considered by the ACCC have involved the assessment of sustainability-based public benefits.

Aviation

In response to the high number of recent complaints it has received, the ACCC will seek to address airlines’ service and pricing practices in the coming year. The ACCC will use its airline industry monitoring role to address in more detail anticompetitive behaviour and unfair business practices in the aviation sector.

Digital economy

Acknowledging the ever-growing importance of e-commerce in Australian society, the Chair’s speech identified a number of issues specific to the digital economy. The ACCC will focus on misleading or deceptive advertising in influencer marketing, online reviews, in-app purchases, and price comparison websites.

Influencer marketing is high on the regulator’s priority list. In an ‘internet sweep’ conducted last year, 80% of influencer posts were deemed to raise potential concerns. Consumer law issues can arise both from opaque sponsorship arrangements, as well as from inaccuracies in sponsored content.

Linked to cost of living concerns, this year the ACCC is looking closely at online price comparison tools. In her speech, the Chair expressed concern that these tools can be used to mislead consumers, “and not convey the extent of sponsorship and commercial incentives” received from sponsored suppliers.

Unfair contract terms

Following last year’s reforms to unfair contract terms, which came into force in November 2023, it will come as no surprise that the unfair contract terms regime remains a compliance priority for the ACCC. Clauses that are of particular concern for the ACCC are unilateral variation clauses, clauses that impose unreasonable fees and penalties, and other clauses that make it difficult for consumers to cancel or end agreements. The ACCC has undertaken a review of a range of standard form agreements and there are matters currently under investigation.

Consumer guarantees

The Chair’s speech identifies consumer guarantees as “the most complained about issue” that is raised with the ACCC. Consumer electronics in particular have traditionally been the subject of complaints – a circumstance which in the regulator’s view often results from blame shifting between retailers and manufacturers. On this point, the Chair hinted at a call for reforms to ensure “a culture of compliance” which, among other things, could involve the imposition of penalties for failures to honour consumer guarantees.

A separate priority noted in respect of consumer guarantees relates to delays in the delivery, and indeed the non-delivery, of consumer products ordered online. The ACCC considers that misleading statements as to delivery timeframes can influence consumer behaviour, and so need to be addressed.

Small business

The ACCC views the protection of small businesses as critical to the functioning of the Australian economy, and this year is no different. Monitoring compliance with industry codes in the agricultural and franchising sectors will be a particular focus, as well as enforcement of the unfair contract terms regime as it applies to small business contracts.

National Anti-Scam Centre

The National Anti-Scam Centre (NASC) was recently launched. It is an intragovernmental body tasked with facilitating government and private sector efforts to detect scams and prevent losses. NASC has experienced early success, with losses down over 40% in December year-on-year. However, in her speech the Chair has called for a legislative response, which coincides with recent government consultation on an overarching regulatory framework to address scams.

Enduring priorities

Enforcement action in respect of cartel conduct will continue, following recent instances of significant fines, and the imposition of serious personal sanctions on officers. The ACCC is also on the lookout for anti-competitive conduct, such as resale price maintenance, boycott conduct and the misuse of market power (including ongoing proceedings against Mastercard).

Further enduring priorities relate to the protection and education of particular groups of consumers. The pursuit of penalties against businesses that take advantage of vulnerable and disadvantaged Australians remains a key priority for the ACCC. Additionally, the Chair announced an initiative directed towards First Nations Australians, through the establishment of a dedicated First Nations coordination, outreach and advocacy team. 

^{[1] The ACCC has recently detailed its position on merger law reforms, having made two submissions in response to the Treasury’s merger reform consultation paper. See the ACCC's submission for the Competition Taskforce’s Merger Reform Consultation Paper and the ACCC’s preliminary views on options for merger control process.}

^{[2] For example, in the telecommunications sector.}

^{[3] See the ACCC’s full greenwashing guidelines.}

^{[4] See an article by the World Intellectual Property Organisation on Green trademarks and the risk of greenwashing.}