Australian Competition and Consumer Commission

Last updated

Australian Competition and Consumer Commission
ACCC logo 2017.svg
Commission overview
Formed1995 (1995) [1]
Preceding agencies
Jurisdiction Australia
Headquarters23 Marcus Clarke Street, Canberra [2]
Employees1,261 (2020–21) [3]
Annual budgetA$304.96 million (2020–21) [3]
Commission executives
  • Gina Cass-Gottlieb, Chair [4]
  • Delia Rickard, Deputy Chair [4]
  • Mick Keogh, Deputy Chair [4]
  • Stephen Ridgeway, Commissioner [4]
  • Anna Brakey, Commissioner [4]
  • Peter Crone, Commissioner [4]
  • Liza Carver, Commissioner [4]
Parent department Treasury
Child commission
Website accc.gov.au

The Australian Competition and Consumer Commission (ACCC) is the chief competition regulator of the Government of Australia, located within the Department of the Treasury. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission and the Prices Surveillance Authority to administer the Trade Practices Act 1974 , which was renamed the Competition and Consumer Act 2010 on 1 January 2011. The ACCC's mandate is to protect consumer rights and business rights and obligations, to perform industry regulation and price monitoring, and to prevent illegal anti-competitive behaviour.

Contents

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. [5] 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! [6]

Though recognised as a failure, Barwick's legislation established in Australian law "the principle of legislative coverage of trade practices". The area badly needed reform. Lionel Murphy, the Attorney-General in the Whitlam Labor Government, solicited the advice of the economist and business commentator, Professor Ted Wheelwright. In April 1973, Wheelwright produced a report for Murphy which became the blueprint of new legislation. He recommended, among other things, that the Act be clearly focused on protecting the consumer. [6]

Senator, Attorney-General and High Court Justice Lionel Murphy Lionel Murphy 1970.jpg
Senator, Attorney-General and High Court Justice Lionel Murphy

Murphy is acknowledged as having completely changed the previous approach regarding trade practices in Australia. For the first time in Australian federal law, his Trade Practices Bill, which was passed on 6 August 1974, introduced offences related to 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] : p.205 

Though the Act included substantial penalties, Murphy's initiative received very little opposition in the Parliament or the business community. [5] : p.205 

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

One role of the ACCC is to bring court actions against companies that breach the Competition and Consumer Act 2010.

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 million for companies and $220,000 for individuals.

The ACCC also has power to accept, on its own 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

In regard to its role of safeguarding consumer rights, there has been occasional criticism of the ACCC for 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.

The ACCC has exercised its authority in a number of retail areas, including fining retailer Target for false advertising [7] and Woolworths (including some Safeway-branded supermarkets in Victoria) for anti-competitive liquor deals. [8]

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. [9] [ non-primary source needed ]

In September 2009, the ACCC reached agreement with Coles and Woolworths to phase out restrictive lease agreements. [10] The ACCC has enforced the law against producers of quack devices with medical claims like Power Balance. [11] It won a case on 24 March 2016 against Valve for failing to provide refunds for faulty products, and making representations that domestic consumer guarantees did not apply to purchases using the Steam client. [12] [13] [14]

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. [15]

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

News Media Bargaining Code

This section is an excerpt from News Media Bargaining Code.[ edit ]
The News Media Bargaining Code (NMBC, or News Media and Digital Platforms Mandatory Bargaining Code) [16] is a law designed to have large technology platforms that operate in Australia pay local news publishers for the news content made available or linked on their platforms. The law's definition of news is broad, [17] including "content that reports, investigates or explains ... current issues or events of public significance for Australians at a local, regional or national level." [18] : 3  Originating in April 2020, when the Australian Government asked the Australian Competition & Consumer Commission (ACCC) to begin drafting it, it achieved broad support in the Australian Parliament but staunch opposition from Facebook and Google. [19] [20] In response, on 18 February 2021, Facebook blocked Australian users from sharing or viewing news content on its platform. [21] The Australian government strongly criticised the move, saying it demonstrated the "immense market power of these digital social giants". [22] A few days later, Australia and Facebook came to an agreement on restoring news pages. [23]

See also

General:

Related Research Articles

Anti-competitive practices are business or government practices that prevent or reduce competition in a market. Antitrust laws ensure businesses do not engage in competitive practices that harm other, usually smaller, businesses or consumers. These laws are formed to promote healthy competition within a free market by limiting the abuse of monopoly power. Competition allows companies to compete in order for products and services to improve; promote innovation; and provide more choices for consumers. In order to obtain greater profits, some large enterprises take advantage of market power to hinder survival of new entrants. Anti-competitive behavior can undermine the efficiency and fairness of the market, leaving consumers with little choice to obtain a reasonable quality of service.

Predatory pricing is a commercial pricing strategy which involves the use of large scale undercutting to eliminate competition. This is where an industry dominant firm with sizable market power will deliberately reduce the prices of a product or service to loss-making levels to attract all consumers and create a monopoly. For a period of time, the prices are set unrealistically low to ensure competitors are unable to effectively compete with the dominant firm without making substantial loss. The aim is to force existing or potential competitors within the industry to abandon the market so that the dominant firm may establish a stronger market position and create further barriers to entry. Once competition has been driven from the market, consumers are forced into a monopolistic market where the dominant firm can safely increase prices to recoup its losses.

Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust law, anti-monopoly law, and trade practices law; the act of pushing for antitrust measures or attacking monopolistic companies is commonly known as trust busting.

Coles Supermarkets Australia Pty Ltd, trading as Coles, is an Australian supermarket, retail and consumer services chain, headquartered in Melbourne as part of the Coles Group. Founded in 1914 in Collingwood by George Coles, Coles operates 846 supermarkets throughout Australia, including several now re-branded Bi-Lo Supermarkets. Coles has over 120,000 employees and accounts for around 27 per cent of the Australian market. Coles' large head office site in Melbourne's inner south-east has 4,000 employees of the workforce located inside.

The National Electricity Market (NEM) is an arrangement in Australia's electricity sector for the connection of the electricity transmission grids of the eastern and southern Australia states and territories to create a cross-state wholesale electricity market. The Australian Energy Market Commission develops and maintains the Australian National Electricity Rules (NER), which have the force of law in the states and territories participating in NEM. The Rules are enforced by the Australian Energy Regulator. The day-to-day management of NEM is performed by the Australian Energy Market Operator.

In Economics and Law, exclusive dealing arises when a supplier entails the buyer by placing limitations on the rights of the buyer to choose what, who and where they deal. This is against the law in most countries which include the USA, Australia and Europe when it has a significant impact of substantially lessening the competition in an industry. When the sales outlets are owned by the supplier, exclusive dealing is because of vertical integration, where the outlets are independent exclusive dealing is illegal due to the Restrictive Trade Practices Act, however, if it is registered and approved it is allowed. While primarily those agreements imposed by sellers are concerned with the comprehensive literature on exclusive dealing, some exclusive dealing arrangements are imposed by buyers instead of sellers.

Resale price maintenance (RPM) or, occasionally, retail price maintenance is the practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices, at or above a price floor or at or below a price ceiling. If a reseller refuses to maintain prices, either openly or covertly, the manufacturer may stop doing business with it. Resale price maintenance is illegal in many jurisdictions.

<i>Competition and Consumer Act 2010</i> Act of the Parliament of Australia

The Competition and Consumer Act 2010 (CCA) is an Act of the Parliament of Australia. Prior to 1 January 2011, it was known as the Trade Practices Act 1974 (TPA). The Act is the legislative vehicle for competition law in Australia, and seeks to promote competition, fair trading as well as providing protection for consumers. It is administered by the Australian Competition & Consumer Commission (ACCC) and also gives some rights for private action. Schedule 2 of the CCA sets out the Australian Consumer Law (ACL). The Federal Court of Australia has the jurisdiction to determine private and public complaints made in regard to contraventions of the Act.

In United States antitrust law, monopolization is illegal monopoly behavior. The main categories of prohibited behavior include exclusive dealing, price discrimination, refusing to supply an essential facility, product tying and predatory pricing. Monopolization is a federal crime under Section 2 of the Sherman Antitrust Act of 1890. It has a specific legal meaning, which is parallel to the "abuse" of a dominant position in EU competition law, under TFEU article 102. It is also illegal in Australia under the Competition and Consumer Act 2010 (CCA). Section 2 of the Sherman Act states that any person "who shall monopolize. .. any part of the trade or commerce among the several states, or with foreign nations shall be deemed guilty of a felony." Section 2 also forbids "attempts to monopolize" and "conspiracies to monopolize". Generally this means that corporations may not act in ways that have been identified as contrary to precedent cases.

Though in general, each business may decide with whom they wish to transact, there are some situations when a refusal to deal may be considered an unlawful anti-competitive practice, if it prevents or reduces competition in a market. The unlawful behaviour may involve two or more companies refusing to use, buy from or otherwise deal with a person or business, such as a competitor, for the purpose of inflicting some economic loss on the target or otherwise force them out of the market. A refusal to deal is forbidden in some countries which have restricted market economies, though the actual acts or situations which may constitute such unacceptable behaviour may vary significantly between jurisdictions.

This is a partial list of notable price fixing and bid rigging cases.

The Commerce Commission is a New Zealand government agency with responsibility for enforcing legislation that relates to competition in the country's markets, fair trading and consumer credit contracts, and regulatory responsibility for areas such as electricity and gas, telecommunications, dairy products and airports. It is an independent Crown entity established under the Commerce Act 1986. Although responsible to the Minister of Commerce and Consumer Affairs and the Minister of Broadcasting, Communications and Digital Media, the Commission is run independently from the government, and is intended to be an impartial promotor and enforcer of the law.

Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent businesses from engaging in fraud or specified unfair practices to gain an advantage over competitors or to mislead consumers. They may also provide additional protection for the general public which may be impacted by a product even when they are not the direct purchaser or consumer of that product. For example, government regulations may require businesses to disclose detailed information about their products—particularly in areas where public health or safety is an issue, such as with food or automobiles.

<i>Telstra Corporation Ltd. v. Commonwealth</i>

Telstra Corporation Limited v. The Commonwealth was an important case decided in the High Court of Australia on 6 March 2008.

<i>Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd</i> 2007 High Court of Australia decision

Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd, (Baxter) was a decision of the High Court of Australia, which ruled on 29 August 2007 that Baxter Healthcare Proprietary Limited, a tenderer for various government contracts, was bound by the Trade Practices Act 1974 in its trade and commerce in tendering for government contracts. More generally, the case concerned the principles of derivative governmental immunity: whether the immunity of a government from a statute extends to third parties that conduct business with the government.

The Australian Consumer Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010, is uniform legislation for consumer protection, applying as a law of the Commonwealth of Australia and is incorporated into the law of each of Australia's states and territories. The law commenced on 1 January 2011, replacing 20 different consumer laws across the Commonwealth and the states and territories, although certain other Acts continue to be in force.

Financial regulation in Australia is extensive and detailed.

<span class="mw-page-title-main">The Competition Act, 2002</span>

The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law. It replaced the archaic The Monopolies and Restrictive Trade Practices Act, 1969. Under this legislation, the Competition Commission of India was established to prevent the activities that have an adverse effect on competition in India. This act extends to whole of India.

Rodney Graham "Rod" Sims is an Australian economist and former public servant. Sims served as chair of the Australian Competition & Consumer Commission (ACCC), Australia's competition regulator, from 1 August 2011 to 20 March 2022.

<span class="mw-page-title-main">News Media Bargaining Code</span> Australian law

The News Media Bargaining Code is a law designed to have large technology platforms that operate in Australia pay local news publishers for the news content made available or linked on their platforms. The law's definition of news is broad, including "content that reports, investigates or explains ... current issues or events of public significance for Australians at a local, regional or national level." Originating in April 2020, when the Australian Government asked the Australian Competition & Consumer Commission (ACCC) to begin drafting it, it achieved broad support in the Australian Parliament but staunch opposition from Facebook and Google. In response, on 18 February 2021, Facebook blocked Australian users from sharing or viewing news content on its platform. The Australian government strongly criticised the move, saying it demonstrated the "immense market power of these digital social giants". A few days later, Australia and Facebook came to an agreement on restoring news pages.

References

  1. ↑ "About the ACCC". Australian Competition and Consumer Commission. 11 September 2012. Retrieved 18 June 2020.
  2. ↑ "Contact the ACCC". Australian Competition and Consumer Commission. 11 September 2012. Retrieved 18 June 2020.
  3. 1 2 Sims, Rod (October 2021). "ACCC and AER Annual Report 2020–21" (PDF). Australian Competition and Consumer Commission. Retrieved 21 March 2022.
  4. 1 2 3 4 5 6 7 "ACCC Chair and Commissioners". Australian Competition and Consumer Commission. 11 September 2012. Retrieved 21 March 2022.
  5. 1 2 3 Hocking, Jenny, Lionel Murphy: a political biography, Cambridge University Press, Cambridge, UK, 2000 ISBN   0 521 79485 4. p.204
  6. 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
  7. ↑ "Target Australia Pty Ltd". ACCC. 14 June 2006. Archived from the original on 21 June 2011. Retrieved 13 June 2011.
  8. ↑ "Woolworths penalised $7 million for anticompetitive liquor deals". ACCC. 22 December 2006. Archived from the original on 21 June 2011. Retrieved 13 June 2011.
  9. ↑ "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.
  10. ↑ "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.
  11. ↑ Georgina Robinson (23 December 2010). "Power Balance bracelets exposed as a sham". The Sydney Morning Herald. Archived from the original on 30 July 2011. Retrieved 13 June 2011.
  12. ↑ 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.
  13. ↑ "ACCC chalks up court win against Valve Software". computerworld.com.au. Archived from the original on 23 December 2016. Retrieved 6 May 2018.
  14. ↑ Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196 (24 March 2016), Federal Court (Australia).
  15. ↑ "Product Recalls Australia – Frequently Asked Questions". Archived from the original on 29 August 2007.
  16. ↑ "ParlInfo - Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2021". parlinfo.aph.gov.au. Retrieved 20 February 2021.
  17. ↑ "Understanding Facebook's News Ban in Australia, and What it Means for the Platform Moving Forward". Google Partner Team. 2021. Retrieved 20 February 2021.
  18. ↑ "Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2021". The Parliament of the Commonwealth of Australia. 2021. Archived from the original on 18 February 2021. Retrieved 20 February 2021.
  19. ↑ Barbaschow, Asha (10 December 2020). "Media Bargaining Code enters Parliament despite Google and Facebook's best efforts". ZDNet. Retrieved 18 February 2021.
  20. ↑ "News media bargaining code". Australian Competition & Consumer Commission . 26 July 2020. Retrieved 21 February 2021.
  21. ↑ Meixner, Sophie (19 February 2021). "Facebook news ban drops reader traffic to news stories by 13 per cent within Australia, Chartbeat data shows". Australian Broadcasting Corporation. Retrieved 21 February 2021.
  22. ↑ "Facebook blocks Australian users from viewing or sharing news". BBC News . 19 February 2021. Retrieved 21 February 2021.
  23. ↑ Choudhury, Saheli Roy (22 February 2021). "Facebook to restore news pages for Australian users in coming days". CNBC . Retrieved 22 February 2021.
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