Transcript
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Acknowledgement of country
I wish to acknowledge the Gadigal people of the Eora Nation, the Traditional Custodians of the land we are meeting on today.
I pay my respects to them and their cultures and to their Elders past, present and emerging. I acknowledge their continuing connection to the land, sea and community.
I also pay my respects to Aboriginal and Torres Strait Islander people who are attending today’s event.
Introduction
It is a pleasure to be here with you today to announce the ACCC’s compliance and enforcement priorities for 2024 - 2025.
I thank CEDA once again for hosting this event and giving us the opportunity to herald our priorities for the coming year. CEDA is a critical forum for enriching economic and policy discussion in our country and I am grateful for your inclusion of the ACCC’s priorities.
The Competition and Consumer Act 2010 is an economic law that serves important social and political objectives. Australian competition law protects and promotes competition, not as an end in itself, but as a means to enhance the welfare of Australians. Competitive rivalry is a powerful force that promotes economic efficiency and consumer welfare by aligning the profit seeking behaviour of firms with the interests of consumers.
The economic and social objectives of Australian competition law were well expressed in the second reading speech when the Trade Practices Act was first enacted in 1974. At that time the then-Attorney General Lionel Murphy described the Act as providing “on a national basis long overdue protection for consumers against a wide range of unfair practices…..These practices cause prices to be maintained at artificially high levels. They enable particular enterprises or groups of enterprises to attain positions of economic dominance which are then susceptible to abuse; they interfere with the interplay of competitive forces which are the foundation of any market economy; they allow discriminatory action against small businesses, exploitation of consumers and feather-bedding of industries.”
These words are evocative of many current political, economic and legal discussions, but I draw attention to them today both because this year marks the 50th anniversary of the Act and because this is a clarion call to the ACCC to champion our law. We recognise the importance of strong enforcement outcomes in achieving specific and general deterrence of conduct prohibited by the CCA and in ensuring that consumers, business and the wider community continue to have confidence in our market economy.
We had key enforcement successes last year which reflected our competition, consumer and small business protection compliance and enforcement priorities. This included actions against large manufacturers, telecommunications, energy and waste services companies, dairy processing companies, motor vehicle and caravan manufacturers and suppliers and digital platforms. This included cases that led to penalties of more than $620 million in the current financial year to date being imposed by the courts.”
Our priorities continue to be shaped by the key challenges facing our economy and the concerns that occupy our community. Principal amongst these shaping influences are the existential importance of the net zero transition, the opportunities and disruptions of digital transformation, and the significant impact of cost of living pressures across our community. We have continued many of the key areas of priority work from last year, with new focus. We also have maintained and extended our enduring commitments informed by conduct that causes the most harm to the competitive process and consumer welfare, with particular recognition of members of our community who face disadvantage and vulnerability.
I will now outline our key 2024-2025 priorities, including a number of our enduring priorities. We will be pursuing these priorities through a combination of strong enforcement action, education to foster compliance and advocacy for appropriate regulatory reform to strengthen the actions the ACCC can take to better protect consumers and promote competition.
Our priorities in the coming year
Sustainability
Due to the cross-economy impact of Australia’s commitment to transition to net zero, the ACCC in 2023 expanded its compliance and enforcement priority focusing on misleading environmental claims to incorporate product safety and competition concerns in relation to sustainability. This priority is reflected in work across the ACCC, including in consumer protection, competition enforcement and exemptions, product safety and market inquiries such as those in electricity and gas markets, and in relation to the Northern Australian cyclone reinsurance pool.
Many Australian consumers want to reduce the negative impacts of their consumption choices on the environment, and purchase goods and services that are marketed using claims about environmental impact. It is important that the claims are accurate, substantiated, and aligned with the understanding of the ordinary and reasonable consumer. In December 2023 the ACCC published principles-based guidance to assist businesses in making clear and accurate environmental claims.
Our engagement with key industry, environmental and business stakeholders was central to our work in the development of those principles. They will be further developed for the use of third party trust marks and claims in relation to emissions and offsets.
The ACCC has a number of in-depth greenwashing investigations including in the energy and consumer products sectors. Many of these investigations were identified following the ACCC’s internet sweep of misleading environmental and sustainability claims. Others were identified following direct complaints to the ACCC. Our Sustainability Taskforce has assisted these investigations by providing specialist advice and input.
In November 2023, the ACCC accepted a court enforceable undertaking from MOO Premium Foods Pty Ltd (MOO) in relation to false and misleading representations regarding “ocean plastic” claims made about its yoghurt product packaging. This was the first public outcome following the announcement of this priority.
During this year we will issue guidance in relation to recognising the public benefit of facilitating the transition and improvements in sustainability in our assessment of conduct authorisations. Over recent years one in four conduct authorisations considered by the ACCC have involved assessment of sustainability based public benefits.
We are also prioritising product safety and sustainability, particularly around electrical products. Following a recommendation from the ACCC, the Assistant Treasurer recently issued a proposed recall notice for specified LG solar storage batteries that can overheat and catch fire without warning.
The ACCC’s Lithium-ion Batteries Report published in October 2023 included recommendations for clear and accessible educational resources for consumers on lithium-ion batteries, and the improvement of incident data to expand and standardise data collection practices around the hazards of consumer electrical products and recommendations regarding the electrical safety framework. In 2024-25 we will build on these recommendations to demonstrate the importance of safe battery design and supply and to work across Government to progress harmonisation of the electrical safety regulatory framework for household electrical consumer products.
Priorities related to cost of living pressures
Australians are experiencing price increases across a range of products and services, including the cost of essential goods and services such as housing, food and groceries, energy prices and financial services. In the most recent monthly CPI figures from the Australian Bureau of Statistics the monthly CPI indicator rose 3.4% in the 12 months to January. The most significant price rises were Housing (+4.6%), Food and non-alcoholic beverages (+4.4%), Alcohol and tobacco (+6.7%) and Insurance and financial services (+8.2%).
In the current circumstances of rising cost of living, Australian consumers are even more vulnerable to the effects of anti-competitive conduct that reduce competition in the supply of essential goods and services, restricting entry or expansion of competitors, reducing choice, and contributing to price escalation pressures.
We are very conscious that misleading sales representations in relation to the price, features or benefits of essential goods and services prevent consumers making informed purchasing decisions and this is of even greater harm in times of reduced household disposable incomes.
Our priorities in relation to a range of sectors are informed by this critical context.
Supermarkets
This year the ACCC will prioritise competition, fair trading, consumer protection and pricing issues in the supermarket sector, with a focus on food and groceries.
This new priority reflects significant price increases in food and groceries and the concerns of many Australian consumers and farmers about supermarket pricing that have been expressed to the ACCC and publicly. We also have a role to ensure that consumers are not misled and that claims about specials, discounts and advertised prices are truthful and accurate.
The Government in January directed the ACCC to conduct a 12-month price inquiry into competition in the supermarket and grocery sector. This inquiry directs the ACCC to conduct a detailed examination of supermarket pricing practices and the relationship between wholesale prices, including farmgate prices received by farmers and retail prices paid by consumers to supermarkets. The ACCC previously conducted an inquiry into the sector in 2008 that led to key compliance and enforcement outcomes, including undertakings to forego restrictive provisions in lease agreements and undertakings to restrict the size of shopper docket discounts and a decision by Government to introduce a unit pricing code.
Our supermarkets price inquiry has commenced with an issues paper and online consumer survey released on 29 February.
In addition, we have been closely considering reports from consumers alleging false or misleading “was/now” or other pricing “specials” advertised by the supermarkets, and whether they may raise concerns under the Australian Consumer Law. The ACCC’s assessments are ongoing and are entirely separate from this new inquiry into the supermarket sector.
Competition and consumer protection issues in essential services
We will be building on the body of work we have begun in the telecommunications, electricity, gas and financial services sectors and will be prioritising competition and consumer protection issues in these sectors. Vigorous competition in these essential services is critical to the efficient functioning of the economy as a whole.
The ACCC’s market inquiries have been an important tool in allowing us to make a forensic examination of issues that are harming competition and consumers, most recently in the energy sector and financial services sector.
Enforcing new gas market regulation remains a priority for us in 2024. Generally we have found good levels of compliance with the emergency $12/GJ cap on wholesale gas prices to date. We continue to review information in respect of contracts entered within the price cap period, however the focus of our monitoring is shifting to Gas Market Code compliance, which took effect in September 2023 and applies to gas producers. In December 2023, the ACCC established a new anonymous complaints portal to assist with detecting non-compliance with the Code including avoidance behaviour.
In December 2023 we also published the final report of our Retail Deposits Inquiry. It found that competition for retail deposit customers is often selective and opaque. Strategic pricing by banks makes commercial sense for them but makes comparisons difficult for consumers. Banks have relied heavily on bonus interest rate and introductory interest rate offers in recent years. These boost the headline interest rates consumers can receive, however the actual interest rates received by many consumers are lower. Complex products mean consumers are often not engaged with the market, or find it difficult to switch accounts, so many consumers are missing out on better interest rates available elsewhere.
Many Australians rely on retail deposit products, but searching for, comparing and switching products is harder than it should be for consumers. We have recommended a number of reforms that will improve transparency, clarity of terms and conditions and lead to better outcomes for consumers.
This year, we are again focusing on misleading conduct in the energy and telecommunications sectors, in particular on their pricing and product claims.
As consumers cope with cost-of-living concerns, it’s important that businesses are accurate about the price and product performance of essential services to allow consumers to be able to make informed decisions about their choices.
Mobile phone coverage, data speeds, off-peak tariffs, environmental benefits are just some examples where consumers grapple with a complex decision-making process when trying to differentiate between similar services.
Over the past few years, the ACCC has continued to take cases in the energy and telecommunications sectors because of businesses engaging in false and misleading representations. The ACCC has been actively monitoring electricity retailer advertising and price increases and, in August last year, we conducted an awareness campaign to encourage customers to call their retailer and switch to a better offer, using traditional and social media.
We also made it clear to retailers that the ACCC would be monitoring and enforcing retailers’ compliance with their legal obligations, including by auditing their communications with consumers about energy cost and price increases to ensure adherence to the Electricity Retail Code of Conduct and Australian Consumer Law. These actions and surveillance continue to be a key priority.
Aviation
This year the ACCC will be prioritising competition and consumer issues in the Aviation sector. We have identified in our first airline monitoring report under our reinstated direction that rates of cancellation and delay remain above long term averages and that Australia stands at a critical point in relation to the opportunity for increased competition with the entry of a fourth airline group competitor and more than two competing airlines on one in two domestic routes. In addition, the ACCC continues to receive a high number of consumer complaints in relation to airline services.
We believe that increased competition will be important to addressing many of the concerns raised by consumers about the airlines’ service and pricing practises. The ACCC submission to the Aviation Green Paper called for reforms to the Sydney Airport Demand Management Scheme to improve competition and an improved consumer protection framework including a fit for purpose compensation scheme for delayed and cancelled flights.
The reinstating of the ACCC’s role in monitoring the airline industry will also allow us to look closer and follow through on allegations of anti-competitive behaviour and unfair business practices in the aviation sector.
Digital economy
Consumer and fair-trading issues in the digital economy will continue to be a priority for the ACCC. We will focus on misleading or deceptive advertising in influencer marketing, online reviews, in-app purchases, and price comparison websites.
The Covid pandemic led to a dramatic shift in the way people shop and how businesses market their product and services. Last year the Australian Consumer Law survey identified that 55% of problematic transactions involved online commerce. This is in line with the dramatic increase and take up by consumers for online commerce.
While traditional advertising still has a role, the rise of more targeted digital advertising that leverages data on consumer purchasing and searching habits and the high proportion of time spent by Australian consumers online has dominated the landscape. The Interactive Advertising Bureau (IAB) estimates that advertising expenditure on digital advertising has grown substantially from $1.7 billion in 2008 to $9.5 billion in Australia in 2020.
Influencer marketing, online review and comparison tools have become a key to reaching consumers and persuading them to choose particular products and brands. They have also become a tool for some businesses to manipulate and influence consumers decisions.
Last year we released the results of our internet sweep into influencer marketing and online reviews. The results highlighted the extent of the issues, with over 80% of influencer posts raising concerns from consumers and more than a third of businesses assessed engaging in concerning conduct in relation to their online product reviews. This survey is the foundation of the ACCC’s ongoing work to develop industry guidance to improve the accuracy and disclosure of sponsorship and commercial arrangements in online advertising practices.
As part of our commitment to make a difference to cost of living challenges this year we will also be looking closely at price comparison websites. These tools can be an important mechanism to inform consumers about price and suitability of products and services. However, we are concerned that these tools can also mislead consumers, and not convey the extent of sponsorship and commercial incentives received from suppliers who are featured in the tools.
Finally, we will be closely looking at the video gaming industry in particular in-app purchases. This industry has significant size and reach, particularly with younger consumers. Far too often we hear concerns about consumers incurring huge purchases because of in-app offerings that have inadequate safeguards, or in some cases, deliberately target and nudge or confuse consumers.
Unfair contract terms
Unfair contract terms in consumer and small business contracts continue to be an enforcement priority for the ACCC. The ACCC has taken a range of enforcement cases across the economy since the unfair contract terms laws commenced over ten years ago. However, this did not result in widespread changes or improved compliance. Last year we welcomed the commencement of a prohibition of and penalties for unfair contract terms in standard form agreements used by larger businesses in their dealings with consumers and small businesses.
The introduction of penalties for unfair contract terms led to a number of businesses proactively making changes to their standard form agreements. This was a positive start, and we thank those businesses that have made this important step.
Nonetheless, we continue to see businesses using standard form agreements that contain unfair contract terms. Clauses that seek to unilaterally vary agreements, impose unreasonable fees and penalties are, in our view, unreasonable and make it difficult for consumers to cancel or end agreements. The ACCC has undertaken a review of a range of standard form agreements and there are matters currently under investigation.
Consumer guarantees
Consumer guarantees is the most complained about issue raised with the ACCC and with each state and territory consumer agency.
Just last month we saw another penalty imposed by the Federal Court for engaging in misleading and deceptive conduct and making false or misleading representations to nine consumers about their consumer guarantee rights. The $11.5 million penalty awarded against Mazda is a reminder of just how seriously the courts view this behaviour.
The ACCC has a number of active investigations and other matters before the court dealing with similar misconduct. This year we are expanding our enforcement focus to the consumer electronics sector.
Consumer electronics attracts a high volume of complaints particularly as many consumers are caught between retailers and manufacturers who often obfuscate, and shift blame on who is responsible when there is an issue.
We also will continue our examination of the automotive and caravan sector, including through enforcement investigations.
A key concern that has recently emerged is the delay in delivery and non-delivery of consumer products. Delivery timeframes are a key consideration for many consumers when choosing a retailer. The ACCC and other consumer agencies have noticed an increase in complaints from consumers in relation to delays. There is a concern that misleading conduct by retailers about delivery timeframes can not only impact consumers decisions, but it will also have an impact on those businesses that are accurately representing the true delivery timeframes.
Whilst improving compliance by businesses with the consumer guarantee regime is important, there is a need to consider what more should be done. The law should be strengthened, access to justice needs to be improved, and a culture of compliance by manufacturers in their dealings with retailers and by retailers in dealing with consumers is essential. One important reform the ACCC considers is necessary is for failure to honour consumer guarantees to be a contravention of the ACL incurring penalties.
ACL issues associated with the National Disability Insurance Scheme
A number of ACCC stakeholders have raised concerns about inadequate mechanisms under the NDIS framework for participants to receive the protections under the Australian Consumer Law. A new priority for the ACCC is improving compliance by NDIS providers with their obligations under the Australian Consumer Law.
As part of the response to the NDIS Review, among many recommendations, the Government has committed to making sure that NDIS providers act with honesty, transparency and integrity, including for pricing of products and services for NDIS participants, as well as ensuring that NDIS providers and participants have access to information about consumer rights.
To address these concerns the ACCC has commenced chairing a joint taskforce involving the NDIS Quality and Safeguards Commission and the National Disability Insurance Agency (NDIA). This is an important initiative and the ACCC is keen to assist the Safeguards Commission and the NDIA in improving compliance by NDIS providers with the ACL.
The ACCC has also committed additional resources to identify and act on consumer law matters that may arise from the conduct of NDIS providers, concentrating on investigations of systemic and/or serious consumer law breaches by providers.
Enduring priorities
Having outlined our annual compliance and enforcement priorities, I now turn to our enduring priorities. These are forms of conduct so detrimental to consumer welfare and competitive process that we have dedicated teams to focus on them and they are a continuing priority.
Significantly, we have expanded these priorities this year, adding two areas. First, scam detection and disruption through the work of the National Anti Scam Centre and secondly the protection of small business from anti-competitive conduct and unfair trading.
Cartel conduct
Taking action on cartel conduct is at the heart of the ACCC’s role as a competition enforcement agency. Cartel conduct is and will remain an enduring priority.
Cartels undermine the competitive process removing competition, restricting output, and increasing price of everyday goods for all Australians. We are proud of our history of cartel enforcement, and will continue to bring cartel proceedings, including criminal cartel proceedings by referring briefs to the Commonwealth Department of Public Prosecutions.
In the past year the ACCC has had successful outcomes with cartel proceedings in both civil and criminal cases across steel manufacturing, professional services, and waste processing.
Last month, Bingo Industries was fined $30 million and Aussie Skips was fined $3.5 million after each company pleaded guilty to having engaged in cartel conduct that led to increased prices for the supply of skip bins and the provision of waste processing services for building and demolition waste in Sydney. Bingo’s fine of $30 million is the second largest fine imposed for criminal cartel offences under the Competition and Consumer Act. In delivering the sentences on Bingo and Aussie Skips, Justice Wigney commented that “the fines imposed for such offences must be sufficiently high that they could not be regarded to be an acceptable cost of doing business. They must also be sufficiently high that others who may be tempted to offend will come to appreciate that the risk of having a substantial penalty imposed well outweighs the likely benefits from the anti-competitive conduct”.
The Court also imposed significant sanctions on the former CEOs of Bingo and Aussie Skips for their role in the cartel. These personal sanctions included custodial sentences, significant personal fines and disqualification from managing a corporation for 5 years. In delivering the sentences in relation to the former CEOs, Justice Wigney commented that offficers of corporations in similar positions “should be left in no doubt that they will face condign punishment if they cause their corporations to enter into, or give effect to, cartel arrangements”.
We have a robust cartel enforcement program, with a number of matters currently before the courts as well as some important matters in our enforcement pipeline.
Anti-competitive conduct
While the ACCC has a range of tools to encourage compliance with the CCA and improve competition in markets, we continue to take enforcement action where we see anti-competitive agreements, and misuse of market power. This remains an enduring priority for us.
Late last year the ACCC received the largest ever penalty for resale price maintenance. Power tool supplier Techtronic was ordered to pay penalties totalling $15 million for price maintenance conduct in relation to Milwaukee branded products. Resale price maintenance is illegal because it harms competition and leads to consumers paying a higher price than they would in a truly competitive market.
Our case against Mastercard alleging misuse of market power is continuing. The Federal Court has scheduled a full hearing in this matter in the first part of 2025. We currently have a number of investigations into anti-competitive conduct and expect to make further announcements about this program of work throughout the year.
We were reminded last week of the inherent complexity of the anticompetitive conduct cases that the ACCC takes before the Court, as the Full Federal Court upheld appeals by the CFMEU and construction company J Hutchinson Pty Ltd. This overturned an earlier judgment that had been in favour of the ACCC. We brought those proceedings regarding alleged boycott conduct, because we held concerns about the competition impact of the arrangement.
Looking at the ACCC’s competition enforcement program as a whole, the fines awarded against Bingo and Aussie Skips bring the total fines and penalties awarded in ACCC’s competition law cases decided this financial year to in excess of $100 million. This is the highest total ever achieved by the ACCC in a financial year for competition law breaches and should send a strong message that the actions we are taking are achieving specific and general deterrence.
National Anti Scam Centre
The NASC was launched last year and has bought together all key parties within government, law enforcement and the private sector to advance strategies for an across-government and key private sector organisations approach to combating scams.
The first fusion cell, established in July 2023, has worked effectively to confront the scourge of investment scams in the community. These scams can lead to significant financial losses and emotional burden for victims. Together with ASIC, banks, digital platforms and the telecommunications industry, this fusion cell has referred over 800 offending websites for takedown. It continues to actively share intelligence with law enforcement and the private sector to disrupt scams.
Losses reported to Scamwatch in December 2023 were $25.2m, down 41.7% compared to December 2022 ($41.3m). This represents the sixth straight month of declining losses in Scamwatch reports compared to the corresponding month in 2022. We will be working co-operatively with peer regulators, law enforcement and key private sector members to continue and build upon these early steps.
All of this is positive, but the job is far from done and a whole of ecosystem legislative framework with mandatory, enforceable codes remains critical to ensure Australia becomes the world’s hardest target for scammers.
Consumers experiencing vulnerability or disadvantage
Through the NASC, we have heard directly from consumers experiencing vulnerability or disadvantage how devastating the impacts of scams can be. We also know that consumers experiencing vulnerability are disproportionately impacted by scams. This is just one demonstration of the reasons that vulnerability remains a standalone factor for us across all priorities and the work of the ACCC.
Over the last year, we saw the conclusion of some significant enforcement work that the ACCC undertook in combatting unconscionable conduct in relation to the VET FEE Help scheme. This culminated with the record penalty of $438m in the action we took against vocational provider against former vocational college Phoenix Institute of Australia Pty Ltd (Phoenix) and its marketing arm Community Training Initiatives Pty Ltd (CTI) for acting unconscionably and misleading consumers.
Justice Perry said in her judgment that penalties imposed were warranted based on “the exploitation of, and predation upon, the vulnerability and disadvantage” by each of them.
Enforcement isn’t the only option to protect vulnerable or disadvantaged consumers and the ACCC continues to dedicate significant resources and works in partnership with other regulators and community organisations to develop education programs and finding ways to prevent such harm from occurring in the first place.
Conduct impacting First Nations Australians
This year we are establishing a dedicated First Nations coordination, outreach and advocacy team that will help inform and align all our activities across the whole agency regarding conduct impacting First Nations Australians.
We are developing comprehensive communication strategies to disseminate key education messages about competition and consumer issues to First Nations communities. And we are committed to our outreach activities where we hear first-hand from community members.
We have already learned a lot about the different perspectives of these communities through our inquiries into childcare and regional telecommunication infrastructure as well as our infant product safety campaign. And we are aware how cost of living issues have affected First Nations’ communities especially, in the more remote communities, more acutely than urban areas.
Small business
We have also added our work to protect the small business sector as an enduring priority. Small business is a significant contributor to our economy and supports the livelihoods of many Australians.
It is therefore critical that small business receive the protections of both competition and consumer laws and small business codes of conduct, including in the agriculture and franchising sectors.
Industry codes continue to play a key role because they allow us to work closely with the individual sectors to find out their issues and challenges.
We have instituted a range of code compliance activities specific to agriculture including enforcement cases. An example is our audit of Horticulture Code compliance and a program of enforcement action to raise awareness of the importance of compliance with the Code. And we will continue with our educational and enforcement work implementing the new penalty regime for unfair contract terms in standard form agreements with small business, a very important reform that we believe will be critical in promoting compliance and change in the sector.
Product safety
Product safety remains an enduring priority for the ACCC. Our commitment to supplier outreach and consumer education to raise awareness of risks, alongside our compliance and enforcement activities, aim to improve product safety for all Australians, now and into the future
The safety of young children will be a key focus of our product safety work throughout 2024-25.
We continue to commit resources to young children, a group we know are particularly vulnerable to harm from unsafe products. Tragically, reports indicate that 151 babies in Australia have died in inclined products such as rockers, bouncers, and propped items since 2001.
This year, there will be particular focus on the safety of nursery products including furniture, infant self-feeding products and infant sleep products. We look forward to sharing more information regarding the full suite of Product Safety Priorities for 2024-25 at the National Consumer Congress in June.
The work of the ACCC is broad and diverse and continues to grow, but our public purpose as an agency remains strong and focussed on enhancing the welfare of all Australians. As we progress our priorities and our work program we will exercise our enforcement powers independently, in the public interest, and with integrity and professionalism.
I look forward to the year ahead.