Investigation power under section 51ADD of the Competition and Consumer Act
On 1 January 2011, the ACCC was given the power to conduct audits to monitor compliance by traders with mandatory industry codes prescribed under the Competition and Consumer Act (the Act), formerly named the Trade Practices Act. There are currently four prescribed codes:
Franchising Code
Horticulture Code
Oilcode
Unit Pricing Code
The power enables the ACCC to obtain from a corporation any information or documents it is required to keep, to generate or to publish under an industry code it is covered by. The corporation has 21 days to provide these documents.
These audits are not financial audits. They empower the ACCC to issue a notice requiring certain categories of information or documents to be given to the ACCC.
If you receive an audit notice, the notice will include instructions on how to respond. If you have any questions about the notice, please contact the ACCC officer specified in the accompanying letter.
FAQ’s
What are the audits for?
The audits will enable the ACCC to quickly determine whether traders are complying with particular aspects of the industry codes that apply to them. The power should also deter non-compliance.
Traders who are complying with relevant industry codes, and who have their records in order, should not have any difficulties responding to an audit notice.
How does the ACCC choose which traders to audit?
While the power allows the ACCC to randomly select traders to audit, we are currently targeting traders that have either a history of complaints or non-compliance (including prior dealings with the ACCC), or that operate in an industry that generates a disproportionate number of complaints.
The fact that you have been issued a notice does not necessarily mean that we have made any assessment that you have breached a code, or that a complaint has been made against you.
What information or documents do I need to provide to the ACCC?
The power enables the ACCC to obtain from a corporation any information or documents it is required to keep, to generate or to publish under the relevant industry code.
For a franchisor, this may include:
Disclosure documents
Franchise agreements
Lease documents
Marketing fund financial statements
Termination notices
For a horticulture trader, this may include:
Terms of trade
Horticulture produce agreements
Written evidence of agreed price for horticulture produce
Rejection notices to growers
Agents’ records
If you are audited, the audit notice you receive will clearly set out the information and documents that you need to provide.
What is the ACCC looking for in its audits?
The ACCC will be looking to ensure that traders are complying with certain aspects of the industry code that applies to them.
I don’t think I’ll be able to respond in time. What should I do?
If you foresee any difficulties providing the requested documents within 21 days, please contact the specified ACCC officer as soon as possible to discuss your situation.
You may request an extension to the 21-day response period. While the ACCC is not required to grant an extension request, the ACCC will consider an extension if there are good reasons why you are unable to comply within the 21-day period.
Extension requests should be made as soon as possible after receiving the audit notice to allow the ACCC to make its decision and respond before the 21-day period expires.
I may have a problem complying with the notice. What should I do?
If you think you may have a problem complying with the notice, you should contact the specified ACCC officer as soon as possible to discuss your situation. We may decide to extend the notice period to give you more time to comply with the notice, or we may decide to vary the notice (for instance, by reducing the time period over which we seek a particular category of documents).
What happens if the information or documents produced in response to an audit notice discloses a breach of a code?
Generally we will get back in touch with the trader to ask for clarification. If the audit reveals severe, deliberate breaches of a prescribed code (or other provisions of the Act) by a trader, enforcement action may in some cases be warranted. If the audit reveals minor breaches, we may seek to resolve the matter administratively. All matters will be handled in accordance with the ACCC’s Compliance and Enforcement policy.
You should also be aware that giving false or misleading information or documents to the ACCC in response to an audit notice is a serious offence.
Once I have been audited by the ACCC, does this mean I am excluded from any future audits?
No, the ACCC may serve an audit notice on you at any time and may do so more than once. The ACCC may also contact you at any time to investigate a suspected breach of a Code or other provisions of the Act.
