Speaking at a Committee for Economic Development (CEDA) WA event in Perth this morning, ACCC Chairman Rod Sims discussed the wide range of work the regulator is undertaking in a range of industries across the economy.
Mr Sims discussed the ACCC's inquiry into the financial sector, the energy affordability crisis facing Australia's east coast, the "game changing" approach to broadband advertising he hopes will reform the telco industry; the changes needed to help new car buyers exercise their rights, the agency's focus on cartel activity; and the need for appropriate regulation before privatising monopoly assets.
In relation to banking, he mentioned that the ACCC's inquiry is well underway, with the major banks due to respond to information notices by the end of this month.
Mr Sims also spoke of the ACCC's separate inquiries into gas and electricity.
"As I am sure you are aware, we on the east coast of Australia are in the midst of an energy affordability crisis," Mr Sims said.
He contrasted one company with plants on the west and east coasts. The former locked in a three-year deal at around $4 per gigajoule, choosing from four offers. The east coast plant has been mothballed.
"There are stark differences in energy pricing around the country based on a range of factors. I don't doubt we are going to continue to see the impact of high gas and electricity pricing affecting businesses across a range of industries," Mr Sims said.
Mr Sims also discussed the challengers consumers are facing when migrating to new broadband services on the National Broadband Network.
“There has never been a more important time to make confident and informed broadband purchasing decisions,” Mr Sims told the Perth audience, “but the information consumers are currently provided with does not make this possible”.
“We want to see retailers moving away from unhelpful, easily misconstrued and inconsistently applied claims like ‘up to’, ‘boost’ and ‘superfast’, and from advertising and/or providing information about theoretical maximum speeds that are based on wholesale inputs.”
“We want to see consumers presented with information based on the realistic speeds they can expect to experience during busy evening periods – not just best-case scenarios,” Mr Sims said.
Mr Sims highlighted the ACCC’s draft new car retailing market study, stating the market is another field in which consumer expectations – and legal protections – consistently fail to meet community standards.
“In the past two years, cars have become an irresistible industry [to take on] for the ACCC as consumer complaints have been growing louder. Manufacturers of new cars appeared in our top 10 most complained about traders in 23 of the past 24 months,” Mr Sims said.
Mr Sims made some observations about findings in the draft new car retailing report released earlier this month.
“Frankly, I am alarmed by the extent of non-compliance with Australian Consumer Law by such a large industry with such large players. It is common for small companies to plead ignorance when they are notified of contraventions of Australian Consumer Law. Ignorance doesn’t wash for small companies and it certainly won’t wash for multinationals.”
The ACCC Chairman also drew attention to its recent approach to cartel behaviour in Australia.
“Over the last three years, the ACCC has built a substantial team of specialist criminal cartel investigators, representing a significant investment by the ACCC. The result being that we now have a strong capacity to conduct careful and thorough criminal investigations.”
“We have now provided several briefs of evidence to the Commonwealth Director of Public Prosecutions on a number of matters. We look forward to them assessing those matters and determining whether there is a basis for commencing prosecutions against any of the parties we have identified,” Mr Sims said.
Earlier this month (3 August), the Federal Court convicted Japanese shipping company Nippon Yusen Kabushiki Kaisha of criminal cartel conduct and ordered it to pay a fine of $25 million; the second-highest fine imposed in ACCC history. The judgment marks the first successful prosecution under the criminal cartel provisions of the Competition and Consumer Act 2010.
“This is a very clear warning to corporate Australia about the seriousness of cartel conduct, and our desire to act against it,” Mr Sims concluded.
A copy of Mr Sims speech to CEDA WA is available at https://www.accc.gov.au/speech/chairmans-address-to-ceda-wa