This guide provides background information and general guidance to businesses and their advisors on the Australian Competition and Consumer Commission’s approach to issuing infringement notices under the Competition and Consumer Act2010 (the Act). This guide takes account of the ACCC’s experience in considering and issuing infringement notices since their introduction as part of Australian Consumer Law (ACL) amendments in April 2010.
This guide is not intended to prescribe the circumstances in which the ACCC will issue infringement notices nor the manner in which it will use them. However, it should provide broad guidance to business as to the ACCC’s approach to the infringement notice provisions.
The ACCC has consulted with other ACL regulators in the preparation of this guide. As the infringement notice power conferred on Commonwealth agencies such as the ACCC is different in legal and practical ways from that conferred on state and territory regulators, the ACCC’s approach to the issuing of infringement notices from time to time may differ in some respects to that taken by state and territory regulators.
Infringement notices are designed to provide a timely, cost-efficient enforcement outcome in relation to relatively minor contraventions of the Act.
The ACCC may issue an infringement notice where it has reasonable grounds to believe that a person has contravened certain consumer protection provisions including:
the unconscionable conduct provisions
the unfair practices provisions (save for certain sections e.g. section 18 of the ACL)
certain unsolicited consumer agreement and lay-by agreement provisions, and
certain product safety and product information provisions.
The ACCC may also issue an infringement notice to a person in relation to:
the failure to respond to a substantiation notice, or
the provision of false or misleading information to the ACCC in response to a substantiation notice.
To be valid, the ACCC must issue an infringement notice within 12 months of the alleged contravention and the notice cannot relate to more than one alleged contravention of an infringement notice provision.
The penalty amount in each infringement notice will vary, depending on the alleged contravention, but in most cases is fixed at $6600 for a corporation (or $66 000 for a listed corporation) and $1320 for an individual for each alleged contravention. The infringement notice penalty amount for failure to comply with a substantiation notice is $3300 for a corporation and $660 for an individual. The infringement notice penalty amount for providing false or misleading information is $5500 for a corporation and $1100 for an individual.
3. The ACCC’s approach to the use of infringement notices
The ACCC’s Compliance and Enforcement Policy sets out the principles it adopts to achieve compliance with the law, and outlines the ACCC’s enforcement powers, functions, priorities and strategies.
Like its use of court enforceable undertakings, generally speaking, the ACCC will only consider issuing an infringement notice where it is likely to seek a court-based resolution should the recipient of the notice choose not to pay. It is important to note that before issuing an infringement notice the ACCC will have turned its mind to the prospect of non-compliance and be prepared to proceed to court as a likely alternative.
The ACCC determines the appropriate enforcement tools to address consumer protection concerns on a case by case basis, taking into consideration the alleged contravention, the business involved and the impact of the conduct on consumers and businesses. A benefit of the infringement notice provisions is that they allow for timely and efficient dispute resolution without the need for litigation.
ACCC consideration of the most appropriate mechanism to address consumer protection concerns will ordinarily include an evaluation of other options available to the ACCC to address its concerns, including court enforceable undertakings, civil proceedings, including civil penalty proceedings, and criminal proceedings. For this reason, while the notice may be signed by the Chairman, all decisions on whether to issue an infringement notice are made by the Commission.
4. When is the ACCC more likely to issue an infringement notice?
The ACCC will take into account a broad range of sometimes competing factors in considering whether to seek to resolve a matter through the issuing of an infringement notice. Examples of circumstances where the ACCC is more likely to consider the use of an infringement notice include:
where it forms the view that the contravening conduct is relatively minor or less serious
where there have been isolated or non-systemic instances of non-compliance
where there have been lower levels of consumer harm or detriment
where the facts are not in dispute or where the ACCC considers the circumstances giving rise to the allegations are not controversial, and
where infringement notices form part of a broader industry or sectoral compliance and enforcement program following the ACCC raising concerns about industry wide conduct.
(a) The ACCC may issue multiple infringement notices
The ACCC may issue multiple infringement notices where it considers it appropriate to do so, taking into account all of the circumstances. In deciding whether to issue more than one infringement notice, the ACCC takes into account a range of considerations including:
whether the ACCC believes that there have been multiple contraventions of infringement notice provisions
where the contraventions have occurred in a number of states or territories
where the contraventions have involved the use of different types of media, such as online, television, radio, magazines and newspapers, outdoor advertising, and
whether there are circumstances which make it desirable to issue multiple notices to deter similar conduct by the specific business involved or the broader industry.
(b) Infringement notices and court-enforceable undertakings
In appropriate cases, as well as issuing an infringement notice, the ACCC may seek additional remedies, including by way of court-enforceable undertakings. This course is more likely where the ACCC considers that:
it is important to minimise the likelihood of future conduct through an undertaking or the implementation of a compliance program
other remedies such as corrective advertising or changed practices are required, or
action is required to deliver affected party or consumer redress such as by refunds.
Where the ACCC considers an infringement notice (or notices) to be appropriate as part of the resolution but insufficient to address one or more of these additional factors, the ACCC may seek a court-enforceable undertaking in addition to issuing an infringement notice.
The ACCC cannot compel a business either to pay an infringement notice penalty or to provide it with an undertaking. Where the ACCC considers that both remedies are appropriate for the resolution of a matter, it will approach the business indicating the package of remedies it will accept to resolve the matter without proceeding to court. It is up to each business to decide whether it will offer an undertaking and pay the infringement notice penalty. Where a business declines to resolve a matter in this manner, the ACCC is likely to consider other enforcement options including court proceedings.
5. When is the ACCC less likely to issue infringement notices?
The ACCC focuses on prioritising matters for compliance and enforcement action where there has been or may be widespread consumer detriment. For this reason, many of the matters the ACCC pursues will not be suitable for resolution by way of infringement notice.
The ACCC is less likely to consider issuing infringement notices where:
the ACCC considers the concerns are more serious in nature and warrant consideration by the court
there has been significant detriment arising from the alleged conduct
the ACCC has concerns that the alleged conduct may be continuing
there are questions about whether the alleged conduct occurred within the 12-month period in which the ACCC may issue an infringement notice
the matter raises complex questions about the interpretation of a provision of the ACL, and
the ACCC or another ACL regulator has previously taken action against the person involved in the alleged contravention—particularly where recent or very similar.
6. What should a business do if it receives an infringement notice?
Generally speaking, a recipient will have some contact from the ACCC before receiving the infringement notice. The ACCC will raise its concerns with the business, outlining what they are and the options it considers appropriate under its Compliance and Enforcement Policy to resolve its concerns. The business will be able to provide any information or documents to the ACCC that it considers relevant to the ACCC’s concerns.
When issued with an infringement notice, the recipient will also be provided with certain information, including the nature of the alleged contravention, the amount to be paid and the period for payment if the person wishes to avoid court action. Other possible actions in response to receiving an infringement notice are explained in the information accompanying the infringement notice.
If a recipient decides to pay it should ensure that the payment is received by the ACCC within the compliance period. The ACCC prefers payment by electronic transfer. If payment is made by cheque the recipient should allow at least five business days for payment to be received and if payment is made by electronic transfer, the recipient should allow at least two business days for payment to be received.
Non-payment of an infringement notice during the compliance period will expose the recipient to the prospect of ACCC-initiated proceedings once the compliance period expires.
(a) Requesting an extension to the compliance period
The compliance period for payment of an infringement notice penalty is 28 days. This may be extended for a maximum of a further 28 days.
In making a request to have the compliance period extended, the recipient should set out the reasons why such an extension should be granted. In making such requests, the recipient should advise the ACCC:
whether they intend to pay the infringement notice penalty
the circumstances as to why they are not able to pay the infringement notice penalty within the current compliance period
why they anticipate they will be able to comply if the compliance period is extended.
Such a request should allow sufficient time for ACCC consideration of the request for extension and should be made no later than one week before the payment due date.
The ACCC will notify the recipient in writing of its decision whether or not to grant an extension of the payment due date.
(b) Requesting that an infringement notice be withdrawn
When deciding whether to issue an infringement notice, the ACCC will have regard to information and documents it has gathered as part of its investigation, including any information provided by the person to whom the ACCC is considering issuing an infringement notice.
The recipient of an infringement notice may request that the infringement notice be withdrawn if they believe they have not engaged in the conduct as alleged by the ACCC or there is information the ACCC should consider that it may not already have.
Any request to withdrawal an infringement notice:
must be prior to the payment due date
must be in writing, and
should provide evidence or information that may assist the ACCC in deciding whether or not to withdraw the notice.
The ACCC will consider all requests for withdrawal of infringement notices. The recipient should allow sufficient time for ACCC consideration and possible withdrawal of the infringement notice when submitting a request for withdrawal. This is because to be effective, the withdrawal of an infringement notice by the ACCC must be undertaken by the due date. Generally speaking, requests should be made no later than two weeks before the payment due date to allow for proper consideration and payment to be made within the compliance period.
Any information or evidence provided to the ACCC as part of a request for withdrawal of the infringement notice cannot be used in evidence against the recipient in proceedings. However, if the recipient provides false or misleading information or evidence this may be used in proceedings against them.
The ACCC will decide, based on the information provided as part of the request and the information it already has, whether or not to withdraw the infringement notice.
As the penalty amount is set out in the ACL, the ACCC is unable to alter the penalty amount for each notice.
(c) Effect of withdrawal of an infringement notice
If an infringement notice is withdrawn, the ACCC will consider on a case by case basis whether further action is appropriate. That action may include the institution of civil penalty proceedings for the alleged contravention which was the subject of the notice.
7. What happens if a recipient pays an infringement notice penalty?
Payment of the infringement notice penalty must be made in full to the ACCC in the manner outlined in the infringement notice.
If a recipient chooses to pay an infringement notice penalty, the person is not, merely because of the payment, to be regarded as having contravened the Act. Further, the ACCC cannot commence court proceedings in relation to the alleged contravention. If a recipient pays an infringement notice penalty to resolve ACCC concerns, this does not impact on the rights of action other parties may have against the recipient.
The ACCC’s approach is that it will not ordinarily indicate whether a business has been given an infringement notice.
In accordance with the principle of transparency outlined in the ACCC’s Compliance and Enforcement Policy, every enforcement matter that is dealt with through litigation or formal resolution is made public.
In accordance with this principle, the ACCC maintains a register on its website listing paid infringement notices. Entries on the register ordinarily contain the following details:
the person who paid the notice
the infringement notice number
the date paid, and
section of the relevant legislation.
The ACCC considers that publishing information about the payment of infringement notices provides for a broader educative and deterrent effect. For this reason, the ACCC is also likely to issue a media release describing the alleged matters and the fact that payment has been made.
9. What happens if a business does not pay an infringement notice penalty?
There is no legal obligation on a recipient to pay an infringement notice.
Infringement notices are a way of resolving the ACCC’s concerns and avoiding legal proceedings. Recipients benefit by having the option of paying the infringement notice penalty as a way of resolving the ACCC’s concerns. Infringement notice penalties are lower than the maximum penalty a court could impose should the recipient be found to have contravened the ACL.
Non-payment of infringement notice penalties will expose the recipient to the prospect of proceedings arising from the ACCC’s concerns that the recipient may have contravened the ACL.
This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a Creative Commons Attribution 3.0 Australia licence, with the exception of:
the Commonwealth Coat of Arms
the ACCC and AER logos
any illustration, diagram, photograph or graphic over which the Australian Competition and Consumer Commission does not hold copyright, but which may be part of or contained within this publication.
The details of the relevant licence conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU licence.
Requests and inquiries concerning reproduction and rights should be addressed to the Director, Internal Communication and Publishing Services, ACCC, GPO Box 3131, Canberra ACT 2601, orpublishing.unit@accc.gov.au.
Important notice
The information in this publication is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as a statement of the law in any jurisdiction. Because it is intended only as a general guide, it may contain generalisations. You should obtain professional advice if you have any specific concern.
The ACCC has made every reasonable effort to provide current and accurate information, but it does not make any guarantees regarding the accuracy, currency or completeness of that information.
Parties who wish to re-publish or otherwise use the information in this publication must check this information for currency and accuracy prior to publication. This should be done prior to each publication edition, as ACCC guidance and relevant transitional legislation frequently change. Any queries parties have should be addressed to the Director, Internal Communications and Publishing Services, ACCC, GPO Box 3131, Canberra ACT 2601, or publishing.unit@accc.gov.au.
