ACCC Product Safety Priorities announced at National Consumer Congress

Speakers: 
Ms Gina Cass-Gottlieb, Chair
Conference: 
National Consumer Congress
16 June 2022

I am delighted to be joining you for my first National Consumer Congress as Chair of the ACCC. It is a privilege to be part of the important consumer protection work of the ACCC together with our partners who join us in this Congress.

Transcript: 

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I am delighted to be joining you for my first National Consumer Congress as Chair of the ACCC. It is a privilege to be part of the important consumer protection work of the ACCC together with our partners who join us in this Congress.

I would like to thank Michael West for his moving Welcome to Country.

I pay my respects to the Gadigal people of the Eora Nation, the traditional custodians of this land, and pay my respects to the Elders past, present and emerging.

I will speak about this in more detail but I would like to emphasise the importance of protecting the rights of Indigenous and Torres Strait Islander consumers. Indigenous consumers, particularly those living in remote communities, can experience vulnerability to breaches of the Competition and Consumer Act and face significant challenges in asserting their rights.

I look forward to hearing from Daphne Naden, Director of the Indigenous Consumer Assistance Network, later this morning about the experiences of Indigenous consumers.

The theme for this year’s National Consumer Congress is “Protecting Tomorrow’s Consumers Today”.

Today, I am pleased to launch the ACCC Product Safety Priorities for 2022/23. These priorities are key to the protection of Australian consumers now and into the future.

Each year we set new Product Safety Priorities for emerging issues and take the opportunity to refocus our work on longstanding priorities. These priorities clearly state the compliance obligations for businesses, signal the enforcement action that we will take against those businesses that fail to comply and also guide our advocacy and education work to alert consumers to safety risks.

A priority for the ACCC this year is high-risk product safety issues affecting young children.

Young children are among our most vulnerable users of consumer products. Protecting their safety is critical.

This priority involves a suite of work directed to keeping babies and children safe, including work focussing on various hazards, such as small high-powered magnets, baby dummies and chains, sleep aids and toys for children under three, which we know can pose a serious risk to small children.

We will also continue our work on toppling furniture with a new focus on improving safety outcomes, particularly for the young and frail. Toppling furniture causes at least one death a year and close to 20 injuries every week and yet there are no requirements for warning labels or for anchoring devices to be supplied with products.

Infant inclined products such as baby bouncers and rockers and other sleep accessories can be potentially deadly for infants and remain a priority this year. There are currently no mandatory or voluntary standards in Australia that specifically apply to infant inclined products.

Following consultation with a range of industry, medical and consumer stakeholders, we will consider what education activities and possible regulatory intervention are needed for inclined infant products.

We will also continue our work on button batteries. Tragically, in Australia, three children have died and on average, one child a month is seriously injured after swallowing or otherwise ingesting a button battery. Enforcing these safety standards is a vital step towards preventing deaths and injuries to children.

I am pleased to say that in just a few days from now, on the 22nd of June, the world-leading mandatory standards for button batteries will come into effect in Australia. These safety standards are a crucial step towards preventing deaths and injuries to children.

This is one example of an initiative to improve the mandatory standards framework. We will also be implementing reforms that make it easier to adopt trusted overseas standards here in Australia so businesses are complying with the latest version of Australian and overseas standards, as recognised in Australian law. It is important the mandatory standards framework is dynamic so that businesses are keeping pace with industry and market developments domestically and internationally.

Another new priority for the ACCC is reducing instances of fires and injuries from lithium-ion batteries.

We can comfortably assume that everyone in this room has at least one lithium-ion battery with them today. You will find these batteries in mobile phones, smart watches, laptops and e-scooters, solar energy systems and other goods.

Over recent years there has been a concerning increase in reports of burns and property damage from consumer products containing lithium-ion batteries. Worryingly, these reports have included solar storage devices in homes that can overheat and catch fire, causing property damage, serious injuries, and death. We will examine the safety hazards associated with lithium-ion batteries to assess potential risk controls and improvements to the current regulatory framework.

Our final product safety priority is online marketplaces. The shift toward online shopping underway before the pandemic has only accelerated.

We will conduct online surveillance of, and continue engagement with, online marketplaces, expand the benefits of the Product Safety Pledge that a growing number of online platforms have committed to, and contribute to greater consistency of international practices.

The ACCC Product Safety Priorities are one crucial element of our consumer protection work.

Unlike most OECD countries, Australia does not have a general safety provision that prohibits the sale of unsafe goods in Australia. Instead the ACCC identifies safety issues once they are already in market or reacts to reports from suppliers or consumers when in some instances consumers have already been harmed.

The introduction of a general safety provision that incentivises manufacturers to ensure their products are safe would allow us to move away from this reactive model and to more effectively take enforcement action for unsafe products.

Our Product Safety Priorities sit alongside our Compliance and Enforcement Priorities, which were announced earlier this year.

The Compliance and Enforcement priorities together with our Product Safety Priorities not only shape and drive the ACCC compliance, investigation and enforcement action for the year ahead, but help guide consumer representative groups, industry, experts and importantly the consumers we aim to protect.

We will continue to seek significant and increasing enforcement penalties against businesses for breaches of the Australian Consumer Law, and we have strong momentum here with our three highest ACL penalties to date: Volkswagen of $125m, Telstra of $50m and the Australian Institute of Professional Education Pty Ltd of $153m all achieved or affirmed in 2021. In April this year, we also secured a $44.7m penalty against Trivago.

We will also continue to seek consumer redress to ensure businesses are compensating consumers directly when they are harmed, particularly in cases involving blatant misconduct against disadvantaged consumers.

Addressing concerns for consumers experiencing vulnerability or disadvantages will be a continuing focus for the ACCC during my tenure, as it was for my predecessors.

We know, as many consumer groups and advocates also do, that Indigenous and Torres Strait Islander consumers can be particularly affected by breaches of their consumer rights and have been disproportionately impacted by the COVID-19 pandemic.

We are committed to our community outreach and education activities to address conduct impacting Indigenous Australians. In 2021-22 we returned to in-person outreach visits to communities where possible and appropriate. We are pleased to have been able to continue to engage virtually with communities that are not physically accessible.

As part of our commitment to protecting the rights of Indigenous consumers, we will continue to take actions that have a meaningful impact for Indigenous Australians.

Last year, the ACCC took action against Telstra for unconscionable conduct when selling mobile contracts to Indigenous consumers. This resulted in a $50 million penalty, consumer redress to affected consumers, and importantly Telstra putting in place measures to reduce the risk of similar conduct in the future.

Last year the ACCC also obtained its highest ever penalty against AIPE to pay $153m for engaging in a system of unconscionable conduct, as well as misleading or deceptive conduct, when enrolling consumers into online diploma courses under the former VET FEE-HELP loan program, many of whom were experiencing vulnerability.

These outcomes signal to large businesses that the ACCC will take action where we see these harms to consumers and in doing so, businesses are now at greater risk of substantially higher penalties than ever before.

As part of our Compliance and Enforcement priorities we will be looking closely at greenwashing and sustainability claims by businesses. This priority is aimed at addressing concerns that businesses are falsely promoting environmental or green credentials to unfairly capitalise on increasing consumer demand for products or services with these benefits.

It can be difficult for consumers to determine the veracity of a product or businesses’ green credentials. Businesses making false or misleading claims betrays consumer trust and creates an unfair advantage for those businesses doing the wrong thing. We will take enforcement action where we find deliberate deception. It is essential that consumers can have trust in green claims

As part of this priority work, we will also conduct various education and compliance activities to enhance business awareness of their obligations in making green claims. Businesses are required to be able to substantiate any environmental claims they make.

We need to empower and educate consumers about what to look for when choosing green products, and so we will undertake similar education to improve consumer’s understanding of environmental claims.    

Another area of focus is manipulative or deceptive advertising and marketing practices in the digital economy designed, including those using dark patterns, to exploit or pressure consumers to purchase goods or services.

While these advertising and marketing techniques are not new, we are seeing technology make them more sophisticated, prevalent, and able to distort or disregard consumer choice.

The ACCC’s recent case against Trivago, focussed on the use of algorithms to mislead consumers and is an excellent example of the ACCC’s ability to tackle complex emerging practices.

We are particularly aware that these practices typically disadvantage consumer’s experiencing vulnerability. The prevalence of engaging with businesses online has been greatly accelerated, and in some cases is the only option for certain consumers or businesses. We intend to focus on those practices that cause the most harm for consumers.

Many of these online practices and techniques have only emerged recently and where regulatory gaps are identified, advocacy or law reform may be required. In particular, we continue to advocate for the introduction of an unfair trading practices prohibition to ensure that all detrimental conduct is captured by the ACL.

The consumer protection issues I have explored today are broad and complex, and we cannot take on these challenges alone. The ACCC will work closely with other responsible regulators, including ASIC and the state and territory consumer regulators. We will continue to engage closely with consumer advocates, including those of you who are with us today.

I am also proud that Australia takes up the Presidency of the International Consumer Protection Enforcement Network (ICPEN) commencing on 1 July 2022. ICPEN is a network of consumer protection agencies from around the globe focussed on the enforcement of cross-border consumer misconduct as well as sharing information on market developments and regulatory best practice. The ACCC will lead ICPEN’s work for the next 12 months and will focus the network on tackling global concerns relating to environmental claims and sustainability, the digital economy and scams.

Before concluding I want to highlight the importance of disrupting scams and our efforts to address growing losses. In our Targeting Scams report, which will be released shortly, we estimate actual financial losses as reported to Scamwatch, Report cyber, other agencies and banks to be over $2b in 2021. Losses reported to Scamwatch in 2021 were up by 84% on 2020, with the highest losses of over $177m to investment scams. Every dollar lost comes from an Australian consumer or business. We will continue to work collaboratively with our partners to educate and protect consumers from scams.

Our shared work protecting consumers has never been more important. Consumers are facing serious pressure as we continue to navigate the impacts of the COVID-19 pandemic and face rising cost of living pressures. These pressures have greatest impact upon the most vulnerable and socio-economically disadvantaged consumers. In this environment it is not only important to protect consumers from unsafe products and take action against businesses failing to meet their obligations under Australian Consumer Law, but also that we are educating and empowering consumers to use their rights. We can make a meaningful and immediate difference by empowering consumers to recognise and avoid scams, use unit pricing in supermarkets to find the best deal, avoid subscription traps that leech money from their accounts, and use their rights when they are entitled to a repair, refund or replacement.

We will also be carefully monitoring energy, telco & petrol pricing, some of all consumers major areas of expenditure, and taking action where we find breaches of our legislation.

I look forward to continuing this important work together.

Thank you.