Law Council Annual Competition and Consumer Law Workshop speech 2024

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Acknowledgment of Country

Good morning, all. I too acknowledge Aboriginal and Torres Strait Islander peoples as the traditional custodians of lands, waterways and skies across Australia. Today I am speaking from Gadigal country and pay my respects to them, their culture and their elders. I also wish to pay my respects to Aboriginal and Torres Strait Islander people who are attending this event today.

Introduction

Thank you for the invitation to give the opening address to this conference at this important and exciting time in competition and consumer law.

This year we are celebrating the 50^th anniversary of the Trade Practices Act and the Trade Practices Commission, followed by their successors, the CCA, and the ACCC.

Time to reflect on the profound influence the TPA and CCA have had not just on the Australian economy, but also on Australian society more generally.

I would argue that through the promotion of competition and fair trading, and securing of consumer protection, the Act has indeed achieved its key aim, greatly contributing to the welfare of generations of Australians.

Courts have tested and illuminated the application of competition law to industries across our nation – including the supply of Y bar for rural fencing¹, publishing of regional newspapers in Murray Bridge South Australia², access to rail lines in the Pilbara³, exclusive distribution of Melbourne Street Directories,⁴ Power Generation in the Northern Territory⁵, the supply of delivered beer from the Castlemaine Tooheys brewery in Brisbane to North Queensland,⁶ through to the sublime – the lawfulness of agreements concerning the playing and broadcasting of the greatest of games rugby league in News Ltd v South Sydney⁷ and in the SuperLeague case.⁸

In the face of significant changes to the Australian economy and society over the past 50 years the Act has kept pace setting the framework for business practices in accordance with the objectives of its founders. It has achieved this through core legislative drafting based on principles, purposive judicial interpretation and deliberative policy informed amendments.

The Act has undergone a series of legislative changes over the years, extending it to address the needs of changing markets, emerging business practices, and growing consumer expectations. Some of the key changes included introduction of a national access regime, the consolidation of a national consumer law regime in the Australian Consumer Law with general and specific consumer protections, consumer guarantees, consumer product safety law and equivalent penalties to competition law contraventions, an unfair contract terms regime to protect consumers and small businesses and the introduction of criminal prosecution for cartel conduct.

Many times these legislative amendments have followed in-depth reviews of the Act, such as after the Swanson Committee review in 1976, the Hilmer Review in 1993, as well as Harper Review in 2015. And currently, the Treasury Taskforce is conducting the Government’s Competition Policy Review.

As you all know, we are on the verge of a new formal merger control regime, following a consultation process that no doubt many of us in this room have been deeply involved in.

In our view this new merger regime provides another opportunity to ensure the laws adjust and adapt to changing times and circumstances, and ensure the changes have the best interest of consumers, and competitive markets at the heart.

I will touch on the topic of merger reform further, later in my speech.

Enforcement, compliance and the ACCC’s approach

I will now turn to some of our recent actions in enforcing the Act. As always, we seek to focus on serious, systemic conduct that significantly impacts consumers or competition. We look to extend the application of the law, provide redress to consumers and achieve general deterrence of offending conduct by businesses.

We recently have launched new court action against The Good Guys for allegedly making false or misleading representations about its store credit and ‘StoreCash’ promotions, and failing to provide store credit to eligible consumers. This conduct, we allege, covered 116 promotions over approximately four years – that is more than two promotions a month on average - potentially reaching tens of thousands of consumers.

Only weeks ago, the Federal Court ordered Secure Parking Pty Ltd to pay nearly $11 million in penalties for making false or misleading claims about its pre-booking online parking service called ‘Secure-a-Spot’. The company admitted it made false or misleading representations by using the name ‘Secure-a-spot’ and making other claims in its marketing materials that consumers would have a parking space reserved for them at a particular time and date, when that was not the case.

And last month Grays eCommerce Group, a well-known online auction business, was ordered to pay $10 million in penalties after admitting it made false and misleading representations in the descriptions of hundreds of cars it had listed for sale on its website over a two-year period. This included mistakes in crucial information such as the make, model, features, transmission system, or manufacturing year of the car on offer, and, frequently, a failure to disclose damage or obvious faults to the vehicles being sold.

In that case we also negotiated a court-enforceable undertaking to ensure consumer redress is paid to affected customers. We are increasingly determined to seek orders for compensation of consumers, where that is administratively possible and the losses are identifiable and more than trivial.

Late last year, Airbnb Ireland UC was ordered to pay a penalty of $15 million, as well as compensation to eligible consumers of another $15 million after admitting it misled consumers about the currency of the prices on its accommodation booking platform. It admitted representing to Australian users that prices for Australian accommodation were in Australian dollars when in fact for about 70,000 consumers, the prices were in US dollars.

We are also waiting on Court determination of the appropriate penalties in our action against Qantas after the ACCC and Qantas have agreed to make a joint submission that a penalty of $100 million would be appropriate. This is in addition to Qantas’ court-enforceable undertaking which included an agreement to pay about $20 million to more than 86,000 consumers who were sold tickets on flights that Qantas had already decided to cancel.

Turning to our competition enforcement program, in 2023-24 the total fines and penalties awarded exceeded $100 million, the highest total ever achieved in one financial year for competition law breaches.

We have a robust pipeline of competition matters under investigation, and matters at various stages of litigation. As you know, competition enforcement is complex by its very nature, and therefore takes time to investigate, and litigate.

We strategically manage our competition enforcement program using the full suite of our regulatory tools, including litigation, to effectively address competition concerns in Australian markets, and to achieve proportionate and appropriate outcomes.

Earlier this year the Federal Court sentenced Bingo Industries and Aussie Skips Bin Services and Aussie Skips Recycling for criminal cartel offences in relation to a price fixing arrangement for demolition waste services in Sydney.

Both companies pleaded guilty and Bingo Industries was fined $30 million – the second largest criminal cartel penalty imposed under the CCA so far. Aussie Skips was fined $3.5 million, and two key managers also pleaded guilty and were sentenced to terms of imprisonment.  In March 2024, Aussie Skips and its manager filed appeals on penalty.

In another, civil, cartel case involving the supply of technology infrastructure and services in three Pilbara mining villages, the Court ordered Swift Networks Pty Ltd to pay $1.2 million for bid rigging, after the company admitted it had engaged in cartel conduct with a competitor about the prices they would submit to various tenders.

Proceedings are under way in a number of matters such as civil cartel proceedings against mining equipment and technology services company Qteq Pty Ltd and its executive chair Simon Ashton, as well as misuse of market power proceedings against Mastercard Asia/Pacific Pte Ltd and Mastercard Asia/Pacific (Australia) Pty Ltd, which we launched in May 2022.

Where appropriate, we will use non-litigated measures to resolve serious competition concerns more quickly, allowing competition in markets to be restored earlier.

Examples of this include our intervention in late 2022 to ensure that Australian’s benefit earlier from a choice of 5G services by accepting a court-enforceable undertaking from Telstra, which was recently followed by court enforceable undertakings recently accepted from Telstra, Optus and TPG as part of our ongoing investigation into Google's search services.

Merger reforms

We are at a critical point in the merger reform journey following the release of the exposure draft legislation.

These reforms come at a time when cost of living and cost of doing business pressures are being felt acutely by many in the community and some markets are particularly vulnerable to being adversely affected by further consolidation.

As we know, concentrated markets are generally not good for consumers and businesses – or indeed for economic growth and productivity. Companies operating in concentrated markets tend to charge higher price markups above costs for their goods and services. They also often have less incentive to compete by innovating in ways that benefit consumers.

For some time, the ACCC has raised concerns that it does not have the necessary tools to have visibility of mergers and prevent anti-competitive mergers. We therefore have been very supportive of the Government’s reform proposals to deliver a stronger, simpler, targeted, faster and more transparent merger system.

An important and necessary tool will be the thresholds - which are yet to be announced. Having the right thresholds for proposed mergers to be reviewed by the ACCC will be key to the effectiveness of the proposed new regime and its ability to achieve the Government’s policy objectives of seeing and preventing mergers that pose a risk to competition, consumers and the economy. This can be achieved by having clear objective monetary thresholds for the primary threshold which is capable of capturing a significant proportion of high-risk mergers (that is, the types of mergers identified by the ACCC in past mergers as raising significant competition concerns), with a lesser reliance on targeted ministerial determinations requiring certain acquisitions to be notified and a low reliance on market share thresholds.

By moving to an administrative model with the ACCC as the expert, first instance decision maker with decisions reviewable by the Tribunal, merger outcomes will be improved and, consistent with the Government’s policy objectives, will ensure that explicit emphasis is placed on economic methodology and analysis of competitive effects. Having the Australian Competition Tribunal, a specialist review body, hear applications for review ensures that the ACCC will be held to account in its decision making, enabling the Tribunal to make its own decision, based on the information and evidence that was before the ACCC.

The ACCC considers that the key elements in the exposure draft are capable, when taken together, of delivering the objectives set by the Government for a reformed regime that is a faster, stronger, simpler, more targeted and more transparent merger regime.

We strongly support the overall direction of the reforms, however to meet the government’s objective of providing for a simpler merger regime we see scope for the legislation to be simplified to improve clarity and reduce complexity. The new merger regime needs to strike the right balance between ensuring that potentially anti-competitive mergers are scrutinised and where necessary prevented, while minimising regulatory burden for acquisitions that do not have anti-competitive effects.

There are significant benefits for business in an administrative regime that are not available in the informal, enforcement-based system including clearer and more certain timelines and greater transparency of ACCC decisions.

We understand that moving to a mandatory administrative regime introduces significant changes for the way businesses and their advisors engage with the ACCC on mergers. It will require a significant change in mindset for all of us, not least the ACCC. We appreciate that advisers are keen to see the ACCC’s guidance about how the new regime will operate – this work is underway on this important preparation, including on developing new merger guidelines, process guidelines and information requirements in the notification forms. We will consult on these as soon as possible.

Digital work

We are now in the final period of our Digital Platforms Services Inquiry, which during the past 5 years has shone a light on concerning and harmful conduct undertaken by the major digital platforms.

Digital platforms are some of the largest and most powerful companies in the world and are deeply embedded in our daily lives. We rely on these platforms for everyday activities, and they have become essential to the functioning of our economy – and are a particularly critical way for Australian businesses seeking to reach consumers.

A handful of the large digital platforms hold significant market power. Given their central position in our lives and the economy, we made the case for additional regulatory scrutiny and measures in the landmark 5th report of our inquiry in September 2022.

Our proposed competition measures would work alongside Australia’s existing competition laws to address anti-competitive conduct, unfair treatment of business users and barriers to entry and expansion by potential rivals.

The Government provided in-principle support for our recommendations and we are continuing to work closely with Treasury on a framework for the competition measures.

Our 9th report, to be released in September, will examine general search services, including the current state of competition in the supply of search. This is clearly timely. We note the significant recent outcome of the US Department of Justice’s case against Google which found, under s2 of the Sherman Act, that Google is a monopolist in general search services and general text advertising and has acted as one to maintain its monopoly.

Our 10th and final report will examine some major developments and key trends in markets for certain digital platform services and their impact on competition and consumers, and provide updates to some of our observations from earlier reports of the Inquiry.

Reflecting the central role of digital services in our lives and economy, the ACCC is also progressing with key aspects of the government’s digital transformation agenda, particularly the Digital Identity and Consumer Data Right programs. We are the interim regulator for the Australian Government Digital ID System that will develop secure, convenient, voluntary and inclusive methods of verifying identity in online transactions for both the public and private sector and protect the privacy and security of personal information, in order to streamline online services and support further development of the digital sector.

In the Consumer Data Right (CDR) sphere, the ACCC continues to progress work to ensure accredited providers and data holders comply with their CDR obligations, including through investigation of breaches of the CDR rules, as evidenced by successful action against HSBC Australia for their failure to disclose accurate data in the CDR ecosystem. We will continue to focus on assuring confidence in the CDR program throughout 2024-25.

No discussion of the digital ecosystem should fail to mention the insidious scourge of scams, which continue to inflict significant financial and emotional distress on many members of our community. The ACCC’s National Anti-Scam Centre, established just over a year ago, is working to disrupt the activity of scammers and reduce theft from scams.

Importantly, the ACCC has also been tasked with the administration and enforcement of a mandatory Scams Code Framework which will establish the responsibilities of key private sector organisations such as banks, digital communications platforms, and telecommunications providers in relation to protection from scam activity.

Sustainability

Much as new digital services and products continue to reshape our businesses, our economy and our lives, Australia’s transition to an environmentally sustainable economy is raising new challenges and opportunities for regulators like the ACCC as it gives rise to the creation of new services and markets.

As we have with digital platforms and services, we at the ACCC will continue to build our understanding of and engage with new markets seeking to price in environmental externalities. An example of this is development of a nature repair market in Australia.

The Nature Repair Act came into effect last December, establishing a framework for a world-first legislated, national, voluntary biodiversity market. The Act anticipates legislated rules to support transparency and integrity and to foster collaborative efforts to address environmental decline.

The ACCC is engaging with colleagues at the Department of Climate Change Energy Environment and Water, providing information on competition and consumer law, to help inform rules and market design that optimise the demand side and activates competition on nature-related merits.

The ACCC’s green-claims-work will be important for ensuring nature related claims do not mislead.

Proponents of nature repair need to have access to clear, easy to understand information about competition law and the ACCC’s authorisation framework to help them to assess competition law risk and where appropriate pursue authorisation for nature repair collaborations.

In July 2024 the ACCC published a draft guide for business which provides basic information about competition law and the ACCC’s compliance and enforcement posture, in lay terms.

We are grateful for the role the Law Council is playing in helping us to develop guidance that meets market needs. 

We received over 30 written submissions in response to this draft, including from the Law Council.

Submissions have welcomed the ACCC’s engagement with these issues, and have provided constructive ideas for improving the guide which we are now carefully considering. We aim to publish a final version of this guide later this year.

New functions

I should also flag, as we consider the evolution of markets in this time of economic transition, that we are in advanced preparations for our new role as the water market conduct regulator in the Murray-Darling Basin.

In this role we will enforce wide laws that address harmful market conduct, including through bans on market manipulation, stronger insider trading rules, and a mandatory code of conduct for water market intermediaries.

It is a further example of how our roles - preserving and promoting competition, consumer protection and fair trading - continue to evolve and adapt alongside key markets.

A further example relates to our new designated complaints function, which commenced this financial year.

This will enable certain consumer and small business groups to make designated complaints to the ACCC about significant and systemic market issues that relate to the ACCC’s powers or functions under the Competition and Consumer Act and the Australian Consumer Law. The current approved designated complainants are CHOICE, Consumer Law Action Centre and COSBOA.

We welcome this process, which we consider will reinforce public confidence in the responsiveness of the ACCC to the competition, consumer and fair trading issues significantly impacting the community.

Conclusion

So, as we, at the ACCC, are fast approaching our 50^th birthday, we are proud of the way we are continuing to develop and adjust to the changing environment and the changing tasks we are being asked to do.

I am confident that the ACCC and our Act will continue to evolve over the next 50 years, building on its strong foundations and delivering enhancements in welfare for all Australians, in accordance with its statutory objectives.

I believe we all ultimately work towards that same goal and contribute in our own way towards it.

I want to thank the members of the Law Council for the role you play in ensuring the Act can continue to thrive for the benefit of Australia, its consumers and businesses.

Thanks for the opportunity to speak to you today.