ACCC authorises promotion of MTAA 'real times guide'
The Australian Competition and Consumer Commission has granted authorisation* to allow the Motor Trades Association of Australia, and its member associations, to promote a 'real times guide' to automotive smash repairers and providers of motor vehicle insurance.**
The MTAA's application for authorisation follows on from a 2005 Productivity Commission inquiry into the relationship between the insurance and smash repair industries. The Productivity Commission recommended that the quoting practice known as funny time, funny money – where smash repairers, with the knowledge of insurers, extend the number of hours quoted for smash repair work to compensate for what may be considered to be a low hourly rate – be abandoned. The MTAA has stated that its guide has been developed to reflect the true time taken to remove and replace parts, and paint accident damaged motor vehicles.
"The ACCC considers that the promotion of the MTAA's guide is likely to lead to minimal public detriment," ACCC Chairman, Mr Graeme Samuel, said.
"There is no provision within the MTAA's application for the collective adoption of the guide. Smash repairers and insurers will be free to choose whether or not to develop or accept quotes based on the guide.
"Insurers are also likely to maintain a strong bargaining position under authorisation, and should be in a position to constrain potential price rises.
"The ACCC considers that the promotion of the MTAA's guide is likely to result in a public benefit. The ACCC considers that the guide is likely to be a useful tool for the formation of quotes based on real world factors, which may provide for greater transparency in the quoting process."
Mr Samuel said the guide has the potential to increase efficiency in the quoting process and may encourage competition between smash repairers.
*Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment. The ACCC conducts a comprehensive public consultation process and issues a draft determination before making a decision to grant or deny authorisation.
**The proposed arrangements potentially raised concerns under the anti-competitive conduct provisions of the Act. Being an organisation comprising competing smash repairers, MTAA's (or its state bodies') distribution and promotion of the guide may be seen as agreements between competing repairers to use the guide or at the very least, agreement to make available with reasonable expectations that it may be taken up by those competing repairers. Consequently, the MTAA lodged an application for authorisation with the ACCC.
