Check against delivery.

Thank you to Monash University for inviting me to speak today. It is an absolute pleasure to be here today with Justice Middleton and Neil Young QC.

The commencement of the Competition and Consumer Act 2010 just over 10 years ago was a milestone in Australian legal and micro economic reform.

The transition from what was previously known as the Trade Practices Act 1974 (TPA), to the CCA which incorporates the Australian Consumer Law, heralded a new era in Australian consumer protection.

This was signalled by the very renaming of the TPA to the CCA in 2011. By including the word ‘consumer’ in the title of the Act, it symbolised that consumers would be put in their rightful place at the centre of a national competition and consumer laws.

I cannot reflect on the past decade of the CCA without acknowledging the inception of the TPA over four decades ago. The TPA, in all its versions, has long served as a powerful instrument in ensuring the proper functioning of Australian markets. Like most legislation, however, the TPA has had to be continuously updated to ensure it meets the needs of a changing marketplace, new and emerging business practices, and growing consumer expectations.

For these reasons, prior to the introduction of the CCA, there had long been calls to overhaul the TPA to better serve the needs of consumers and small businesses. This call gained increasing momentum in the late 2000’s, which resulted in the Federal Government directing the Productivity Commission to conduct an inquiry. The Productivity Commission’s landmark report in 2008 recommended extensive reforms to the consumer protection regime and the manner in which it is administered.

The Federal Government worked quickly to implement the Commission’s recommendations. COAG, through the National Partnership Agreement to Deliver a Seamless National Economy, and the Federal, State and Territory governments also worked in an efficient manner to complete the legislative process to implement the ACL by 31 December 2010. This ensured that the legislation could commence in all jurisdictions on 1 January 2011.

As noted by the then General Manager of the Competition and Consumer Policy Division of Treasury, now Treasury Secretary, Dr Steven Kennedy, in an address in late 2009, this change, in his words, represented '...the largest overhaul of Australia’s consumer laws in 25 years'.

Whilst there had been previous attempts to unify the consumer law, over time these attempts were watered down and ineffective, with some jurisdictions advancing law reforms well ahead of others.

In my view, the ACL reforms, like the earlier Hilmer and the national competition policy reforms, stand up to, and rival, the many major microeconomic reforms of the 1980s and 1990s.

I will explain this view by today reflecting on:

  • the game changing nature of the ACL
  • the significant outcomes these reforms have delivered for Australian consumers, businesses and the wider community, and
  • the lessons we have learnt along the way. As always, this involves turning our mind to the reforms that still need to be made to strengthen the protections of the Act for both consumers and small business.

1. The game changing nature of the ACL

The importance of the ACL reforms cannot be overstated. Prior to the introduction of the ACL, Australia’s general consumer laws consisted of 13 separate Acts providing for consumer protection across Australia. In addition to this, there were another eight state and territory laws about the sale of goods.

The introduction of the ACL replaced at least 850 sections in these Acts, not including many of the ancillary enforcement and other provisions that supported them.

In addition, the commencement of the ACL saw a golden era in collaboration among consumer law regulators. By introducing, for the first time, a single national consumer law, the Australian Competition and Consumer Commission (ACCC) and State and Territory ACL regulators have been able to collaborate far more easily on issues of consumer concern. A great example of this was evident last year at the height of the COVID pandemic, with the ACL regulators establishing an Urgent Response Group to deal with the deluge of consumer issues that arose as a result of the pandemic and its societal and economic effects.

While the ACCC focusses on national issues of interest to consumers, other issues may be more appropriately addressed at the state/territory level. For example, the ACCC may refer issues to ACL regulators where activity is more localised to a particular state or territory, or where the matter may be resolved by way of individual dispute resolution conducted by the ACL regulator. But it’s important to note that it’s not all one way; many state ACL regulators have taken, and continue to take, the lead on nationally significant enforcement, compliance and policy reforms.

The key change made when the ACL was introduced, in my view, was the introduction of civil pecuniary penalties for consumer law contraventions, which have transformed the ACCC’s armoury when taking enforcement action in the courts against businesses for alleged contraventions of the ACL. This in turn has transformed compliance with the consumer law. For laws to be effective, there must be serious and effective consequences for breaches of these laws.

The ACCC was also granted the ability to issue infringement notices where it has reasonable grounds to believe that a corporation has contravened certain provisions of the ACL. There were some people that thought this was a step too far in increasing the ACCC’s powers, however the sky hasn’t fallen and the ACCC continues to exercise very careful judgement when it comes to the exercise of this power.

The reforms also gave the ACCC the power to issue public warning notices to alert consumers to a suspected breach of the substantive provisions of the ACL, where it is in the public interest to do so.

In many instances the rights of consumers and obligations of manufacturers and suppliers under the ACL were not new. However, two key regimes in the ACL were: the consumer guarantees and the unfair contract terms provisions, which was subsequently amended to extend the protections of the UCT provisions to small businesses.

Both these regimes are hugely important for consumers and small businesses, although the impact of the UCT regime has been lesser because penalties cannot be imposed when a term is found by the Court to be unfair.

The CCA also imposed a nationally consistent approach to product safety, including mandatory safety standards, product bans, product recalls and mandatory reporting and notification requirements. This has improved the ability of regulators to administer product safety laws and conduct related compliance and enforcement activities.

2. Measuring the impact of the ACL

Ultimately, as a result of the changes brought about by the introduction of the ACL, consumer law can now be considered as being equivalent to competition law in terms of its significance to consumers, businesses and the community.

In the past, in the absence of civil penalties, the ACCC relied on either obtaining injunctions and other remedial orders or pursuing criminal prosecution by the CDPP in rare cases, which meant that outcomes for consumers were often less effective or in the case of criminal actions slow, difficult and often impractical. With significant civil pecuniary penalties, however, the ACCC can pursue serious breaches by large, national and sophisticated traders and individuals and ask the Federal Court to impose substantial penalties of appropriate deterrent value. This has the effect of not only penalising these businesses for non-compliance but also, crucially, deterring other businesses from engaging in similar misconduct in the future.

In my strong view having well intended laws that are hard to enforce is corrosive to society. Fortunately the ACL corrected this in the case of consumer protection.

Significantly, the Federal Court has imposed a total of almost $400 million in civil pecuniary penalties instituted by the ACCC in the last 10 years, including the Volkswagen and Viagogo penalties which are both currently under appeal. That only around $5 million in criminal fines was obtained for consumer law breaches prior to this reform says it all.

In contrast, the ACCC’s power to issue infringement notices has enabled us to expeditiously resolve less significant or serious matters without resorting to legal proceedings. This avoids tying up significant resources on litigation, and ensures that deterrence messages are delivered quickly and proportionately where businesses choose to pay the penalty specified in the notice. The ACCC has issued a total of 281 infringement notices against 140 businesses over the past decade.

The CCA reforms also afforded the ACCC the ability to seek appropriate orders to deal more effectively with rogue individuals who wind up companies and set up new corporate entities in an attempt to continue misconduct.

For example, the ACCC can seek that the Court impose a disqualification order to prevent an individual who was involved or knowingly concerned in a contravention from managing corporations for a period of time. The ACCC is also able to seek more bespoke orders banning individuals from managing corporations or from engaging in specific forms of conduct, such as recently occurred in the case brought by the ACCC against We Buy Houses.

In this matter, in addition to the imposition of a $12 million penalty against the company, the director of the business, Rick Otton was further penalised $6 million for his involvement and banned for 10 years from managing corporations as a result of his misconduct.

The use of public warning notices has been very effective in warning consumers about the concerning conduct by particular traders. These notices can also be effective in warning consumers about companies’ phoenixing under new entities. For example, in the matters involving each of LuxStyle and Dismissals Direct, the issuing of public warning notices was the most effective and fastest way for the ACCC to take action in relation to concerning conduct that had potential to cause further detriment to consumers.

Consumer redress orders have also been important in facilitating redress for non-party consumers impacted by breaches of the ACL. Where appropriate, in our enforcement actions we consider whether we can obtain orders to provide a mechanism for the consumers to receive a refund or contract variation as a form of redress.

The totality of these reforms, which all resulted from the introduction of the ACL, has ultimately facilitated a new and improved way of working for the ACCC. This has resulted in many significant and meaningful outcomes for consumers. While there are many such examples I could mention today, the actions we have taken against Coles, Volkswagen and Telstra over the past decade are particularly worthy of highlighting due to their significance.

The Coles unconscionable conduct case in 2014 represents, in my mind, one of the most important results delivered by the ACCC under the ACL on behalf of smaller business suppliers. Indeed, this was one of the first findings of unconscionable conduct in a business-to-business context under the ACL. In my view Coles’ behaviour was dreadful and needed to be strongly dealt with, and it was. In addition to the penalty of $10 million imposed by the Court, Coles agreed to a redress process via a section 87B undertaking, as a result of which Coles refunded more than $12 million to suppliers.

The outcome in Volkswagen is also worth noting due to the highest ever penalty, $125 million, imposed by the Federal Court; we are now awaiting judgment from the Full Court following an appeal against this penalty.

Our recent institution of proceedings against Telstra for engaging in unconscionable conduct in selling post-paid mobile products to Indigenous Australian consumers is another significant matter. This is still before the Court, but the ACCC and Telstra have agreed to jointly submit to the Court that a penalty of $50 million is appropriate in all the circumstances to achieve specific and general deterrence.

3. The CCA does not stand still

As significant as the ACL reforms were, the CCA has continued to evolve.

The significant reforms flowing from the review conducted by Ian Harper led to key changes for the competition provisions. The removal of ‘per se’ prohibition for exclusive dealing and the introduction of the class exemption processes to allow collective bargaining were important developments; they were, however, overshadowed by the amazing debate about the misuse of market power provision: section 46.

Whilst I appreciated the concerns raised by many, we felt that there was a clear case for reforming the misuse of market power provision to send clearer messages about the importance of protecting the competitive process. Our first proceeding using the new section 46, the Tasports case, is listed for hearing in a few months.

The last 10 years haven’t just been about the ACL. The introduction of new industry codes of conduct which are enforceable under the CCA covering horticulture, electricity retailing, dairy and numerous iterations of the franchising code continue to expand the reach of the ACCC and test the skills of our teams.

We have also made good progress over the past 10 years in enforcing the consumer guarantee and unfair contract terms regimes introduced by the ACL. However, further reforms are still required to ensure that these provisions can be effectively enforced. The ACCC is advocating for law change which makes a failure to comply with the consumer guarantee and unfair contracts provisions a contravention of the ACL and therefore subject to pecuniary penalties being imposed under section 224 of the ACL. We are continuing to work with Federal and State governments which are undertaking a review of these provisions.

When I first started with the ACCC in 2011 there was genuine excitement about the imposition of any civil pecuniary penalty of $1 million or more for a consumer law case. However, as time passed, it was clear that the penalty regime for ACL breaches needed an overhaul in order to deter future misconduct.

The ACL reforms in 2018 led to a significant increase in maximum penalties, which was something that the ACCC actively sought. The higher maximum civil pecuniary penalties for contravention of the ACL means they are now the same as the maximum penalties for the competition law provisions. I am also proud to say that, as far as we are aware, Australia’s civil pecuniary penalties are now the highest in the world for contraventions of consumer protection laws.

It would be remiss of me not to mention our criminal cartel work. Well before the CCA reforms, the ACCC and its predecessor the TPC, advocated for criminal penalties for hard core cartel conduct.

In July 2009 these reforms finally commenced, introducing the new criminal cartel prohibition.

The detection, investigation and ultimately prosecution of criminal cartels is hard exacting work. The dedicated team that we have now built up in the ACCC has developed the specialist skills and knowledge that is necessary to undertake this work. Whilst progress has been slow in some regards, we are now starting to see the benefit of this work with a number of prosecutions being launched by the CDPP and several cases where criminal fines have been imposed.

Three international shipping companies have been convicted and fined a total of $83.5m in Australia in relation to cartel behaviour, after detailed investigations by the ACCC in coordination with other international regulators. In August 2017, Nippon Yusen Kabushiki Kaisha (NYK) was fined $25 million, while K-Line was fined $34.5 million in August 2019, which remains the largest criminal fine ordered under the CCA. And in February this year, Wallenius Wilhelmsen was fined $24 million for its part in this cartel.

There are a number of other prosecutions before the Courts including, of course, the alleged cartel involving Citigroup, Deutsche Bank, ANZ and the executives which was committed to stand trial in the Federal Court late last year.

Conclusion: Looking forward

Despite the overwhelming progress we have made to date, the ACCC must continue to advocate for reforms to address key issues impacting consumers and small businesses. Indeed, a 10-year anniversary is a good time to reflect and take stock of what still needs to be done. Reforms often occur in 10-year cycles.

I have already mentioned the ACCC’s view of the need for change in both the consumer guarantees regime and the unfair contract terms regime.

It is also our view that Australia needs an unfair trading practice prohibition. This was identified during the review of the ACL in 2018, and we continue to advocate for the implementation of such a prohibition today. I am convinced that such a prohibition would remove or avoid the need for some intrusive industry-specific regulation. That is, it can help lessen the overall regulatory burden.

I will also add the need for a general safety provision to be introduced, to prohibit suppliers from supplying unsafe products. Unfortunately at present the ACCC’s product safety role is after the event, and suppliers are not subject to penalty for selling unsafe products. This reform is urgently needed to protect Australian consumers.

On the competition side, we are also considering reform to the merger control regime.

Merger control plays a critical role in ensuring that competition is not eroded via mergers. In recent years we have become increasingly concerned as to whether Australia’s merger control regime remains fit for purpose and, in particular, whether it is achieving the balance required to ensure good outcomes for consumers and the economy.

Increasingly, we believe that merger parties and the courts are focused on what is likely to happen in the future without the acquisition, which is challenging to 'prove' in court. While this is a relevant consideration it is also open to manipulation, and the focus on the counterfactual in many cases risks overlooking the likely anticompetitive effects of the merger itself. This is compounded by many of the merger factors listed in s50(3), which can be used to support a merger clearance.

It appears that insufficient weight is placed on the risks to competition, such as potential competition being lost, barriers to entry raised or competitors being foreclosed. As a result, our merger control regime is skewed towards clearance, which presents real challenges for our economy given the damage that can be done by anticompetitive mergers. We therefore consider that the approach to merger control needs to be rebalanced. We are currently exploring merger law reform options to bring about this change.

Returning to the ACL, I will leave you with one final comment. This is to caution against divergence in consumer law across jurisdictions in Australia. We all must remember the benefits achieved through harmonisation 10 years ago. We need the continued, if not increased, cooperation between jurisdictions to meet the challenges of the present and future.

Thank you for your time today.