The ACCC welcomes the Australian Government launching consultation on possible reforms to the Australian Consumer Law to address currently unregulated unfair trading practices.
Unfair trading practices currently fall outside the scope of the Australian Consumer Law despite causing considerable harm for consumers and small businesses.
Consultation has commenced on the proposed reforms and the ACCC encourages all stakeholders, particularly consumer and small business groups, to provide their views to the Department of Treasury.
“The ACCC has been advocating for some time for an unfair trading practices prohibition to be introduced into the Australian Consumer Law to better protect consumers and small businesses,” ACCC Deputy Chair Catriona Lowe said.
“We have previously identified numerous examples of concerning business conduct, which is unlikely to breach Australian Consumer Law but causes real harm to consumers.”
“This consultation process is an opportunity to drive improved consumer protections into the Australian Consumer Law and we are calling for consumers and consumer groups to participate by sharing their experiences and knowledge,” Ms Lowe said.
“The ACCC considers the introduction of an unfair trading practices prohibition would set an improved standard for business behaviour to guide and promote better conduct by businesses,” ACCC Deputy Chair Mick Keogh said.
“Many small businesses and consumers have limited bargaining power in their dealings with large businesses, making them more susceptible to unfair trading practices. The ACCC’s 2020 Perishable Agricultural Goods Inquiry concluded that Australia’s perishable agricultural goods markets need a new unfair trading law to address harmful practices arising from bargaining power imbalances that are not covered by current laws.”
“Unfair trading practices create an uneven playing field for businesses and can discourage or inhibit small businesses from competing in markets. Businesses should be competing on merits and the reforms the ACCC has been advocating for will help to better achieve this,” Mr Keogh said.
Consultation is now open and submissions are due to the Department of Treasury by 29 November 2023.
Background
Unfair trading practices is conduct that is:
- harmful but does not reach the legal threshold for unconscionable conduct
- not misleading or deceptive but distorts consumer choice by creating confusion or hiding or omitting relevant information
- not captured by the unfair contract term provisions as harmful terms in non-standard form contracts or unfair conduct engaged in pursuant to a contract term that is, on the face of it, a reasonable contract term.
The ACCC has previously recommended that an unfair trading practices prohibition should be introduced into the Australian Consumer Law in a number of contexts, including:
- the 2019 Digital Platforms Inquiry Final Report
- several interim reports for the Digital Platform Services Inquiry, including the fifth interim report which provided the ACCC’s recommendations to address competition and consumer issues
- the 2020 Perishable Agricultural Goods Inquiry Report
- the ACCC’s submissions to the Productivity Commission Inquiry into Australia’s Productivity Performance
- the ACCC’s submission to the Productivity Commission’s Study into Aboriginal and Torres Strait Islander Visual Arts and Crafts