2021 National Consumer Congress: Road to recovery

Speakers: 
Mr Rod Sims, Chair
Conference: 
National Consumer Congress
22 March 2021

ACCC Chair Rod Sims addresses the second session of the 2021 National Consumer Congress and formally announces the 2021 Product Safety Priorities. Mr Sims discusses the three themes of this year’s Congress: product safety, fairness in trading practices and product sustainability with regard to consumer protection.

Transcript: 

Check against delivery.

Introduction

I am delighted again to be addressing the National Consumer Congress (Congress), and on such important topics.

It is also fitting to be speaking to you on the 10th anniversary of the Competition and Consumer Act (CCA), which incorporates the Australian Consumer Law (ACL). The ACL’s introduction was a game changer for us and State and Territory consumer law regulators, and the introduction of civil pecuniary penalties for consumer law contraventions has transformed compliance with, and the profile of, consumer law.

We must never forget that laws without meaningful penalties are, in many ways, useless.

Appropriately, the theme of this year’s Congress is ‘building back’. The recovery from the pandemic continues, in stark contrast to many places overseas, and I hope I am right in saying it is picking up as consumer confidence returns.

It is in this context that I will speak to you about ‘building back’. The pandemic across the three themes of this year’s Congress:

  1. safety
  2. fairness, and
  3. sustainability.

1. Safety

The ACCC Commissioners, appropriately, spend a lot of time on safety issues, and consumer harm is at the core of our approach to deciding what matters to prioritise.

The ACCC shares the responsibility for product safety regulation with state and territory Australian Consumer Law regulators so our priorities are endorsed as ‘national priorities’ and supported by our counterpart regulators.

This year we will be focusing our efforts on the following five priority areas:

  • conducting education, surveillance and enforcement in relation to the quad bike safety standard
  • implementing the new safety standards for button batteries
  • implementing strategies for unsafe infant sleeping products
  • strengthening product safety online through commitments from online marketplaces, and
  • scoping effective risk controls for toppling furniture.

While quad bikes is a renewed priority, there is still much work to be done. In October this year, the important requirement of operator protection devices being fitted to quad bikes becomes mandatory. The safety standard is a necessary step to address quad bike safety risks, particularly as deaths and serious injuries are continuing. There were a record 23 deaths last year, many from rollovers, and since 2011 there have been 162 deaths and an estimated six injuries per day associated with quad bikes. This is appalling and unacceptable.

The ACCC will be focusing on ensuring compliance with a series of requirements which are already in effect and, importantly, also delivering educational initiatives about the second phase of requirements to increase quad bike stability and require operator protection devices. They come into effect in October 2021.

Since announcing button batteries as an ACCC product safety priority in 2019, this Congress has played a key role in propelling awareness and developments towards the implementation of the safety standards announced by the government in December 2020. The world-first standards for button batteries will improve safety in the design of products containing button batteries, the packaging of button batteries, as well as the warning requirements alerting consumers to the risks.

It has taken an enormous amount of work by many, and taken a long time, but we should all at this conference be proud of the result.

In Australia there have been three deaths in the past eight years, and more than one child a month sustains a severe injury due to button batteries.

The impacts of increased time at home during COVID-19 has also further contributed to this risk, with the United States Consumer Product Safety Commission reporting a 93% increase in children aged 5-9 mouthing, swallowing or inserting button batteries.

The ACCC will be focused on promoting businesses’ compliance with the button battery safety standards through education during the transition period over the next 18 months.

Other key priorities continuing this year are the scoping of effective risk controls for toppling furniture and implementing strategies for unsafe infant sleeping products. Our work on these priorities was delayed last year when we had to rapidly address product safety issues arising from COVID-19.

Last year the ACCC completed the first phase of a market review into unsafe infant sleeping products, which involved analysis of incident data, scientific literature and international developments. Now we will engage in extensive consultation with stakeholders to assess the potential safety risks associated with infant inclined sleeping products, and to identify appropriate strategies.

In 2017, we undertook a two-year national strategy for toppling furniture and television safety to assess industry’s implementation of the Best Practice Guide for Furniture and Television Tip-Over Prevention. Evaluation of the strategy found that industry self-regulation is not leading to sufficiently safe practices.

We estimate that around 2,600 Australians receive hospital treatment for injuries caused by toppling furniture and televisions each year, equating to approximately 50 people per week. Between 2001-2018, twenty-two children under the age of nine have died from toppling furniture. The ACCC will work to identify more effective risk controls.

Strengthening product safety online is a priority for the ACCC. The ACCC will monitor online compliance commitments recently given by four of Australia’s largest online marketplaces. In November 2020, eBay Australia, Amazon Australia, AliExpress and Catch.com.au signed the Australian Product Safety Pledge, committing themselves to do much more to protect consumers from unsafe products than required by the current law. Other large online businesses are encouraged to join this pledge and work with us to enhance product safety online.

I am pleased, however, to report that there is one product safety priority that is no longer on the list. In December 2020, we completed our three year compulsory recall of cars with deadly Takata airbags. Car manufacturers have successfully replaced or accounted for 99.9% of the more than 3 million affected vehicles.

The Takata recall illustrates the need for a general safety provision to be introduced, to prohibit suppliers from supplying unsafe products to Australian consumers. Many other countries already have this law in place, including the UK, EU, Malaysia, Singapore, Canada, Hong Kong and Brazil, and we will keep pushing this issue.

While I have listed our priorities for this year, we will not be neglecting our core product safety work. Maintaining these core functions is essential, and for the most part, this work is largely unseen but includes:

  • negotiating, assessing and monitoring recalls
  • assessing product safety hazards
  • conducting surveillance
  • reviewing mandatory safety standards and bans
  • communicating risk to consumers, and
  • educating suppliers on their product safety responsibilities.

Finally, and fittingly given this audience, I want to announce today that the ACCC is building up our team dedicated to product safety into a stand-alone division, recognising the importance of this work. This is a milestone for the ACCC and for product safety, and has been facilitated by additional resources into this area from the Commonwealth Government, for which we are very grateful.

2. Fairness

Many in this audience are concerned about the lack of protection or redress if they have been unfairly targeted by business.

I know that many of you strongly agree as I do that Australia’s consumer law framework needs an unfair trading practice prohibition. This is an issue that Australian governments and agencies are already discussing following the review of the ACL in 2018, and it was a key recommendation that we have made following our Digital Platform and Perishable Goods inquiries.

While we have had some success with the unconscionable conduct provisions, the courts are showing us clearly the limitations of this provision, in part due to how it is named.

I will have more to say on this at our panel session at our next meeting. Suffice to say here that a principles-based prohibition would allow the law to keep up with evolving unfair trading practices, particularly as technology creates new opportunities for unfair conduct.

On 6 November 2020 the Consumer Affairs Forum agreed that unregulated unfair practices warrant further exploration through a regulation impact assessment process. The ACCC welcomes this and will engage with this process, and we encourage everyone here to do so as well.

3. Sustainability

Those of us working in consumer protection must be closely attuned to the issue of product sustainability.

We have already had a few cases linked to the environment, such as flushable wipes and compostable cutlery, neither of which went well. We are, however, aware of consumers’ concern for the environment and their willingness to pay more for a product that makes environmental claims. Just as important is consumers’ expectation for product sustainability.

In Australia, the Productivity Commission has commenced a review into a consumer ‘right to repair’. The question of whether Australia should introduce some form of ‘right to repair’ is a complex and multi-faceted one. It would intersect with many aspects of the law and economy, including intellectual property, international law, competition law and consumer protection and fair trading laws.

What can be done? One obvious step would be to require manufacturers to disclose how long their products are expected to last, and how long they will support them.

In many cases manufacturers plan in advance how long to support a product before releasing that product to market. However, some manufacturers do not disclose the support period to consumers adequately or at all. If manufacturers do not disclose their anticipated lifespan of a product consumers cannot meaningfully assess a product’s value, particularly when comparing with other products.

The ACCC considers reforms to consumer law or specific regulatory intervention will be necessary to address harms relating to consumers’ and small businesses’ access to repairs or spare parts. A principles-based prohibition on unfair trading practices will help.

Sustainability is of growing importance in the rapidly expanding market of digital and the ‘internet of things’ devices. A lack of continuing security support for products linked to the internet may, for example, compromise consumers’ personal data, so it is important consumers are equipped with all necessary information to assess this risk prior to purchase.

Aside from the s58 consumer guarantee, the ACL does not impose any express obligation on manufacturers to support a product for a minimum period of time nor does it specifically require manufacturers to tell consumers about the support period.

While the ACCC has taken action regarding representations about future support, it is hoped that the Productivity Commission will consider the merit of the introduction of express obligations on manufacturers to continue to support their products for a reasonable period of time, as well as disclose a minimum time that products, including IOT devices, will be supported.

This whole area will only increase in importance in future so we all need to engage with it.

Conclusion

Thank you to everyone attending, and for the crucial role you play in protecting consumers. A particular thanks to those of you who have brought important matters to our attention, responded when we’ve sought advice, and supported us when we’ve advocated to improve the laws protecting Australian consumers.

I suspect that is all of you watching today.

Thank you for your time today.

Correction: This speech was amended on 23 March 2021 to correct the figures for toppling furniture deaths for children to the period between 2001-2018, not 2011-2018 as originally stated.