ACCC's top enforcement priorities

ACCC chair Rod Sims outlines the commission's priorities in regulating competition and consumer issues.

As 2019 gathers steam, Australia’s business community continues to reflect on recent scandals and the findings of the banking Royal Commission. There remains a low level of public trust in our market economy. Much work is still to be done to restore faith that markets can operate fairly, effectively and to consumers’ benefit.

The ACCC has a crucial role to play in this process. As I argued in a speech to the Committee for Economic Development of Australia (CEDA) in February, in which I outlined our compliance and enforcement priorities for the year ahead, it is in the long-term interest of not only consumers, but all Australian businesses that the ACCC is effective in “making markets work”. Our 2019 priorities are set with this purpose in mind.

Cartel action

On competition law matters, we expect at least three significant cartel investigations to be referred to the Commonwealth Director of Public Prosecutions (CDPP) this year for a decision on whether to prosecute.

As these criminal cartel prosecutions progress, we are confident they will work as a strong deterrent to egregious and damaging collusive conduct.

Increased budget support means we are also able to experiment with different approaches to our competition investigations. These include our SLC (substantial lessening of competition) project. This will focus on the ACCC gaining a deeper understanding of the concerning conduct before conducting an in-depth market analysis. We will target conduct that may contravene the new misuse of market power and concerted practices provisions.

I am confident that we will bring proceedings under these provisions this year.

Financial services

Our new Financial Services Competition Branch is expected to complete a number of in-depth investigations potentially resulting in court proceedings, as well as provide support for the CDPP prosecution of ANZ, Citigroup, Deutsche Bank, plus six of their senior officers. The commercial construction sector will also continue to be a focus area.

Customer loyalty

On consumer enforcement, we are examining issues arising from customer loyalty schemes, consumer guarantee rights in the context of the large retailers and manufacturers that supply high-value consumer goods, advertising practices on social media platforms, and the complexity and opacity of pricing in the energy and telecommunications sectors.

Franchise issues

We have a number of investigations underway to address serious allegations of misconduct in the franchising sector, following our recent court success in the Ultra Tune and Geowash cases.

Unfair contracts

We will also be continuing our focus on the business-to-business unfair contract term laws, particularly in the agricultural sector. Unfair contract terms can cause great harm to small businesses and farmers.

Within our responsibilities for product safety, we will also continue to advocate for a general safety provision obliging companies to take reasonable steps to avoid supplying unsafe goods. This will give consumers greater confidence that the goods they buy are safe and create a level playing field for businesses.

The Takata airbag recall will remain a primary concern, as will the ACCC’s work on button battery safety, unsafe children’s sleeping products, and the safety of products sold online.

Competition policy involves the enforcement of effective laws as well as lowering barriers to competition and promoting well-functioning markets. For the ACCC to do the first, but not the second, through advocacy of the benefits of particular competition policies is to see its work half-done; and to not properly leverage the findings and insights we gain from our enforcement and broader work.

Power pressure

One example of this is in electricity retailing. We have successfully taken cases against many electricity retailers, yet consumers were still being confused and many were paying silly prices. Therefore, we made recommendations to government in our Retail Electricity Pricing Inquiry. Several of those recommendations will be implemented from July.

As a community, we need to debate how much we want to reduce anti-competitive behaviour and the current trend towards company consolidation in many sectors.

This is an important and exciting year for the ACCC as we focus on ensuring markets work for the long-term interests of consumers.