Australian Competition and Consumer Commission

Australian Competition and Consumer Commission
Agency overview
Formed 1995; 22 years ago[1]
Preceding agencies
Jurisdiction Australia
Headquarters 23 Marcus Clarke Street
Canberra
Australian Capital Territory
Employees 802 (estimate for 2013–14)[2]
Annual budget $202M AUD (estimated 2010)
Agency executive
Parent agency Department of the Treasury
Website accc.gov.au

The Australian Competition and Consumer Commission (ACCC) is an independent authority of the Australian government. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission (TPC) and the Prices Surveillance Authority to administer the Trade Practices Act 1974 (TPA) (Cth) (renamed the Competition and Consumer Act 2010 on 1 January 2011). Its mandate is to protect consumer rights, business rights and obligations, perform industry regulation and price monitoring and prevent illegal anti-competitive behaviour.

Historical Origins

The ACCC's deeper origins are found in the Restrictive Trade Practices Act of Sir Garfield Barwick, Attorney-General in the Liberal Government of Sir Robert Menzies in 1965.[3] Opponents derided Barwick’s Trade Practices Act 1965 as “ineffectual”.

(The Act) did not declare any practices illegal ipso facto, but only did so after detailed investigation by the Trade Practices Commissioner. There were so many restrictive practices reported to the Commissioner, and the investigations were so prolonged, that one cynic remarked that at the then current rate of progress, it would take a hundred years to examine them all![4]

Though acknowledged as an abject failure, nevertheless Barwick’s Act had established in Australian Law “the principle of legislative coverage of trade practices”. The area badly needed reform. Attorney-General in the Whitlam Labor Government Lionel Murphy solicited the advice and help of the eminent economist and business commentator, Professor Ted Wheelwright. In April 1973 Wheelwright produced a report for Murphy which became the blueprint of the coming legislation. He recommended, inter alia, that the Act be clearly focused on protecting the consumer.[4]

Lionel Murphy is acknowledged as completely changing the previous approach regarding trade practices in Australia. His Trade Practices Bill, which was passed on August 6, 1974, for the first time in Australian Federal law, introduced offences concerning monopolisation, exclusive dealing, price discrimination, resale price maintenance, restraints of trade by agreement, anti-competitive mergers, misleading advertising, coercive sales conduct, pyramid selling and the sale of unsolicited goods.[5]

Even though, concomitantly, the Act introduced substantial penalties, Murphy’s initiative, surprisingly, received very little opposition in the Parliament or the business community.[5]

Roles

The ACCC administers the Competition and Consumer Act, and has standing to take action in the Federal Court of Australia to enforce its provision. The Competition and Consumer Act is a broad range of provisions, such as provisions on anti-competitive conduct, the Australian Consumer Law and regulation of telecommunications and energy industries. The ACCC, under the Act, also regulates certain industries by providing access to national infrastructure. The ACCC also has an educative role and seeks to educate both consumers and businesses as to their rights and responsibilities under the act.

The Australian Energy Regulator is a constituent but separate part of the ACCC and is responsible for economic energy regulation. It shares staff and premises with the ACCC, but has a separate board, although at least one board member must also be a Commissioner at the ACCC.

Restrictive trade practices

In most cases the spirit of the act, and thus the actions of the ACCC, favours neither consumer nor supplier, but strives to achieve a competitive market without artificial restrictions. For example, refusal to deal – a producer refusing to supply a potential retailer or customer with a product – is not itself illegal unless the action would have an anti-competitive effect on the market as a whole.

Penalties

The ACCC is committed in bringing court actions against companies that breach the Competition and Consumer Act. Penalties for non-compliance of the CCA can be quite severe.

Companies that do not comply with the restrictive trade practices provisions of CCA may be fined by the Federal Court. There are three ways the maximum fine can be calculated. The maximum possible fine is the larger of A$10,000,000; or three times the value of the illegal benefit; or (if the value of the benefit cannot be ascertained) 10% of turnover for the preceding 12 months. Individuals may be fined up to $500,000 and since 2009 certain offences under the Competition and Consumer Act (such as price fixing or participation in a cartel) have been criminalised with executives who engage in conduct which contravenes the relevant provisions liable for a custodial sentence of up to 10 years in prison (44ZZRF and 44ZZRG of the CCA).

Companies that do not comply with the consumer protection provisions of CCA may be fined by the Federal Court, up to $1.1 M for companies and $220,000 for individuals.

The ACCC also has power to accept, on its on behalf, court enforceable undertakings under s87B of the Competition and Consumer Act. Such undertakings may include a wide range of remedies to the conduct.

A range of other remedies can be ordered by the court. For example, companies are frequently forced to publish retractions of false advertising claims in national newspapers and at their places of business. Companies found in breach of the CCA are usually bound to implement a compliance program to ensure future compliance with the Act.

Consumer confidence

The ACCC is regarded by some Australian business people as necessary but often ineffective, echoing the critics of American anti-trust laws, while Australian consumers generally hold the ACCC in high regard. Whilst it is acknowledged that the ACCC is required to help safeguard consumer rights, there has been occasional criticism of the organisation as being "all-talk-no-action". This criticism is most likely due to the inherent difficulty in obtaining sufficient evidence to prove breaches of the restrictive trade practices provisions of the Competition and Consumer Act.

Recently the ACCC has exercised its authority in a number of retail areas, including fining retailer Target for false advertising[6] and Woolworths (including some Safeway branded supermarkets in Victoria) for anti-competitive liquor deals.[7] In 2008 the ACCC published findings of its inquiry into the competitiveness of retail prices for groceries in Australia. The report found that the Australian supermarket sector is "workably competitive", but price competition is limited by barriers to entry and a lack of incentive for the two major players, Coles and Woolworths, to compete on price. The report also noted that Coles and Woolworths engage in deliberate strategies designed to ensure they maintain exclusive access to prime sites such as shopping centres to prevent centre managers leasing space to competing supermarkets.[8] In September 2009 the ACCC reached agreement with Coles and Woolworths to phase out restrictive lease agreements.[9] The ACCC has enforced the law against producers of quack devices with medical claims like Power Balance.[10] It won a case on 24 March 2016 against Valve Corporation for failing to provide refunds for faulty products, and making representations that domestic consumer guarantees did not apply to purchases using the Steam client.[11][12][13]

Product safety and recalls

The ACCC maintains a website listing all Australian product recalls and the following organisations are commissioned to assist with the surveillance and monitoring of product safety in relevant areas.[14]

The ACCC, in conjunction with state and territory offices of fair trading, is responsible for developing and enforcing mandatory consumer product safety standards except where the product falls into the jurisdiction of one of the specialist regulators mentioned above.

Chairmen

See also

General:

References

  1. ↑ CA 8199: Australian Competition and Consumer Commission [ACCC], National Office, National Archives of Australia, retrieved 11 October 2013
  2. ↑ Australian Government. "Budget Paper No. 1". 2013-14 Commonwealth Budget. Statement 6: Expenses and Net Capital Investment: Australian Government. Archived from the original on 24 September 2013.
  3. ↑ Hocking, Jenny, Lionel Murphy -a Political Biography, Cambridge University Press, Cambridge, UK, 2000 ISBN 0 521 79485 4. p.204
  4. 1 2 Wheelwright E.L., The Political Economy of Lionel Murphy, Venturini V.G (editor), in Five Voices for Lionel, Federation Press, Annandale NSW, 1994, ISBN 1-86287-149-3. pp 1-22
  5. 1 2 Hocking, Jenny, op.cit. p.205
  6. ↑ "Target Australia Pty Ltd". ACCC. 14 June 2006. Archived from the original on 21 June 2011. Retrieved 13 June 2011.
  7. ↑ "Woolworths penalised $7 million for anticompetitive liquor deals". ACCC. 22 December 2006. Archived from the original on 21 June 2011. Retrieved 13 June 2011.
  8. ↑ "Report of the ACCC inquiry into the competitiveness of retail prices for standard groceries". ACCC. 5 August 2008. Archived from the original on 21 June 2011. Retrieved 13 June 2011.
  9. ↑ "Woolworths and Coles agree to get rid of restrictive leases". Australian Food News. 18 September 2009. Archived from the original on 27 July 2011. Retrieved 13 June 2011.
  10. ↑ Georgina Robinson (23 December 2010). "Power Balance bracelets exposed as a sham". Sydney Morning Herald. Archived from the original on 30 July 2011. Retrieved 13 June 2011.
  11. ↑ Wilkins, Georgia (29 March 2016). "Online games giant Valve found to have breached Australian consumer law". The Sydney Morning Herald. Archived from the original on 5 December 2017. Retrieved 6 May 2018.
  12. ↑ "ACCC chalks up court win against Valve Software". computerworld.com.au. Archived from the original on 23 December 2016. Retrieved 6 May 2018.
  13. ↑ Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196 (24 March 2016), Federal Court (Australia).
  14. ↑ "Product Recalls Australia – Frequently Asked Questions". Archived from the original on 29 August 2007.
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