ACCC policing business on prices

Macquarie Corporate Telecommunications has notified the Australian Competition and Consumer Commission of a number of access disputes under Part XIC of the Trade Practices Act 1974.

"The ACCC will actively and rigorously apply the strong provisions of legislation now before the Senate and monitor price changes in the market to determine if price exploitation is occurring.

"The ACCC has very significant powers to quickly deal with any businesses that try to exploit the tax changes by excessively increasing the prices of goods and services and will not hesitate to use them, as has been demonstrated in the past in other enforcement areas.

"Proposed strong changes to the Trade Practices Act 1974 now before the Senate have created the offence of price exploitation during the three-year period of introduction of the new tax system. Businesses that engage in price exploitation are liable to penalties of up to $10 million for corporations and $500,000 for individuals. Underpinning the law are the aims that first there are no unnecessary price increases and second that the benefits of tax cuts are passed through to consumers fully and immediately.

"The ACCC is required to issue guidelines about when prices contravene the Act, which were issued for comment on 23April 1999.

"These draft Guidelines indicated, as just one element of the wide program of enforcement the ACCC is proposing, that major corporations give commitments of compliance with the letter and spirit of the new arrangements. The objective is to have verifiable commitments and methodologies about pricing decisions by corporations.

"Discussions are now being held with major corporations about possible arrangements under which they commit to comply with ACCC guidelines and establish information and data systems which enable the ACCC to check that they have actually been complying with the law. This is an efficient way of ensuring compliance with the law. It does not mean that businesses will self-regulate their prices.

"Such voluntary commitments will not protect any corporation from action by the ACCC if price exploitation occurs.

"The ACCC will also monitor prices generally before and after the introduction of the new tax system to provide information on price movements and to identify areas where action is necessary. In doing so it will draw upon a wide variety of sources of information.

"Prices of a range of goods and services will be collected from around Australia on a periodic basis. Some price monitoring has already commenced. The data collected through price monitoring will assist the ACCC to identify trends and to take enforcement action.

"A Consumer Hotline will be set up to take calls on price movements that are detected by consumers. The Hotline will provide information that will help the ACCC move quickly to investigate emerging price trends or individual companies that are clearly profiteering.

"An enforcement strategy is also being developed that will give business a clear warning as to when and how the ACCC will take action.

"The ACCC will also develop a comprehensive consumer education campaign to tell consumers about the prohibition on price exploitation and to provide them with details about how to contact the ACCC where they believe that businesses have exploited prices after the new tax system comes into effect.

"The ACCC is working with the Australian Tax Office and other agencies to ensure business receives a consistent message. However, the ACCC will not be relying on any other agencies to undertake its obligations.

"The ACCC will ensure businesses do not use the introduction of the new tax system to exploit consumers, and it has significant powers and penalties to deal with those who choose to ignore the law.

"Only one newspaper, the Australian Financial Review, has interpreted the ACCCs comments yesterday at a Senate Estimates Committee as implying business would be left to do self-policing of the proposed new tax system. This is wrong. Business will not be given a carte blanche".