ACCC releases September 2012 quarterly report - $6.8 million in court penalties

The Australian Competition and Consumer Commission today published the September 2012 quarterly report, ACCCount.

Notable achievements of the quarter include:

• responding to close to 46,000 complaints and inquiries from businesses and consumers

• securing over $6.8 million in court penalties in enforcement cases relating to fair trading and consumer protection

• commencing four proceedings in the Federal Court

• obtaining four court enforceable undertakings and receiving payment of four infringement notices, as well as many other administrative resolutions

• completing 24 merger reviews and nine final authorisation determinations

• delivering extensive education campaigns to raise awareness on many issues from cartels amongst business to unscrupulous door to door sales tactics amongst consumers, and including an indigenous radio campaign to promote consumer rights

ACCC Chairman Rod Sims said, “The ACCC continues to undertake a wide range of consumer and competition activity to benefit all Australians and ensure our market economy functions as it should. While, say, our enforcement and merger assessment activity generates most interest, Australians benefit as least as much from our other activities.

“That said, a particular recent focus has been enforcement of the new Australian Consumer Law (ACL). Total penalties awarded under the ACL are now $19.42 million since it commenced in January 2011,” Mr Sims said.

Of note this quarter is a $2 million penalty awarded against Energy Watch in July for misleading billboard advertising about energy savings and the $2.5 million penalty awarded against EDirect in September for misleading and deceptive conduct in relation to mobile phone contracts in indigenous communities.

In the September quarter, the Federal Court handed down judgments against Metricon Homes for misleading advertising, Exclusive Media and Publishing for unconscionable conduct and Rosie’s Free Range Eggs for substituting cage eggs for free range, with penalties ranging from $50, 000 to $800,000.

Furthermore, the ACCC commenced proceedings in the Federal Court for alleged breaches of the Act in four matters. These included alleging misleading or deceptive conduct around the promotion and supply of duck meat products against Pepe’s Ducks, and alleging an anti-competitive cartel arrangement for LPG products involving Renegade Gas, Speed-E-Gas & Ors

Mr Sims said, “In addition to securing court based outcomes, the ACCC utilised the broad range of tools available under the Act including administrative resolutions, and implemented education and outreach campaigns for businesses and the community,”

For example in the area of carbon price claims, the ACCC obtained five administrative resolutions and one enforceable undertaking from air conditioning and refrigeration repair companies. More than 40 formal and informal warning letters and 50 educative letters were issued to traders, providing them with information and guidance material about making carbon price claims.

“Consumer protection in the telecommunications and energy sectors is a priority for the ACCC and the AER and door to door sales practices, in particular, remain a key area of focus,” Mr Sims said.

In July, the AER launched the user friendly energy comparison website Energy Made Easy, providing a range of tools to assist consumers and small businesses to make informed choices about electricity and gas offers, and better understand their energy usage and requirements
In August, the ACCC launched a research report on the door to door sales industry and new, practical tools to help consumers manage problematic behaviour associated with this sales approach. A guide was released to help consumers understand their rights and the ACCC commenced a campaign promoting ‘Do Not Knock’ stickers, which saw 40,000 orders in a single month.

In September, the Federal Court provided guidance on ‘Do Not Knock’ signs in the first case brought under the Unsolicited Consumer Agreement provisions of the ACL. The Court declared that door to door salespeople engaged by Neighbourhood Energy and Australian Green Credits breached the ACL by failing to leave the homes of consumers when requested, including by way of a ‘Do Not Knock’ sign.  Neighbourhood Energy was ordered by consent to pay a penalty of $850,000 and Australian Green Credits was ordered by consent to pay $150,000.

During the quarter, a conference was held with suppliers of small, high powered magnets intended as desk novelties for adults to discuss safety concerns. This followed an increase in serious injuries in children attributed to these products. Since the reporting period, the Assistant Treasurer has permanently banned these small, high powered magnets.

Of the 46,000 complaints and inquiries received by the ACCC, almost 50 per cent concerned scams. The SCAMwatch website attracted close to 280,000 unique visits in the September quarter and advance free fraud and computer hacking scams, generated the most scam contacts.  The ‘Microsoft scam’ continued to generate a high level of contact.

In August, the ACCC launched the short film The Marker, which shows the devastating effects involvement in a cartel can have on individuals and businesses and promotes the ACCC’s immunity program. The film is part of the ACCC’s integrated strategy to prevent cartel involvement and raise greater awareness about the criminal penalty regime applying to hard core cartel activity.

The ACCC completed 24 merger reviews across a range of sectors during the quarter including supermarket retailing, health services and the media sector. Statements of Issues were released on four matters that raised competition concerns, including Seven Group’s proposed acquisition of Consolidated Media Holdings and Nestle’ proposed acquisition of Pfizer Nutrition.

Also in the September quarter, the ACCC commenced its assessment of the applications for authorisation lodged by Qantas and Emirates to coordinate their operations pursuant to a Master Coordination Agreement.

ACCCount is available at http://www.accc.gov.au/content/index.phtml/itemId/1088445.