ACCC’s 2017 Enforcement Priorities – What to Expect

On 24 February 2017, the ACCC’s Chairman, Mr Rod Sims, launched the 2017 ACCC Compliance and Enforcement Policy and announced the ACCC’s enforcement priorities for 2017.

It certainly looks like being a busy year for the ACCC, with enforcement activities foreshadowed in a number of areas.

Set out below are the key areas identified in the Policy as ACCC priority areas for 2017.  In addition, we have included, in italics, comments made by the Chairman in launching the Policy.

1. Agricultural sector

In 2015 the ACCC established a specific Agriculture Enforcement and Engagement Unit and in February 2016 it announced the appointment of an ACCC Commissioner, Mr Mick Keogh, with particular responsibilities in relation to the agriculture sector.

In 2016 the ACCC conducted market studies on the agriculture sector focusing on the competitiveness of particular agriculture supply chains.

The ACCC intends to build on this work in 2017.

We will deliver a report of the inquiry’s findings by 1 November 2017.

We also expect to launch some cases alleging breaches of the Act by some firms in the agriculture sector.

2. Commercial construction sector

The ACCC has been involved in a number of matters involving the commercial construction sector.

This year it has established a team to focus on this sector and included it in its list of 2017 priorities.

We have some continuing investigations and we will put additional resources into some of those matters, and additional inquiries we have been scoping, to investigate fully some serious allegations of anti-competitive conduct.

3. Private health insurance

The health and medical sectors were priority areas for the ACCC in 2015 and 2016.

This year the focus within the health and medical sectors is on health insurance.  In particular, the ACCC has expressed concerns about health insurers not providing consumers with adequate notice of changes to their health insurance cover.

Competition in the health sector has been an enforcement priority for some years.  We expect to continue to have significant resources allocated to cases in this area in 2017 and some of our investigations are at a very advanced stage.

4. New car retailing

In 2016 new car retailing was identified by the ACCC as a priority area and it commenced a market study into new car retailing.

This year, as part of our new car retailing industry market study, we will closely examine a number of issues that have been raised, such as:

• consumers’ options for seeking a remedy if their new car is defective; the issue is the interaction between consumer guarantees, and manufacturers’ warranties or dealers’ extended warranties
• how complaints are handled by the industry; there have been several issues raised about this, including recurring failures not resolved by repeated repairs, refusal to repair particular defects or to provide a refund or replacement for significant failures, and consumers having to engage in protracted negotiations to have issues resolved
• consumers having difficulty enforcing their consumer guarantee rights and non-compliance by car manufacturers and dealers
• unclear and inconsistent information on what is covered under manufacturers’ warranties and dealers’ extended warranties, and
• the use of non-disclosure agreements in relation to the remedy provided for a defective new car.

5. Broadband speed and performance claims

This is a new priority area but the telecommunications sector is no stranger to the ACCC.

This year the focus is on broadband performance and speed claims and providing the industry with guidance for advertising.

We anticipate our best practice broadband speeds advertising guidance for industry will be available in the first half of 2017.

We are also working with government on the introduction of a Broadband Performance Monitoring and Reporting program.

6. Consumer guarantees

This is another continuing priority area from 2016.

In the past, the ACCC has raised concerns about:

• Express warranties:  Consumers being led to believe that their rights in relation to defective products are limited to those under express warranties, ignoring consumers’ rights under the consumer guarantees in the Australian Consumer Law
• Extended warranties:  Consumers being led to believe that they need to pay for extended warranties rather than rely on their rights under the consumer guarantees in the Australian Consumer Law
• Resolution of complaints:  Consumers’ complaints about defective products being resolved without due regard to their rights under the consumer guarantees in the Australian Consumer Law
• Remedies being provided subject to conditions:  Suppliers providing consumers with remedies in relation to defective products to which they are entitled under the consumer guarantees, subject to them complying with certain conditions such as the payment of money or commitments to keep the resolution of the complaint confidential.

This year the ACCC’s focus will extend to the application of consumer guarantees to services, such as those provided by airlines in the telecommunications sector.

7. Enduring priorities

The above priorities identified for 2017 are in addition to what the ACCC refers to as its “enduring priorities”.  These include cartel conduct, anti-competitive agreements and practices, misuse of market power, product safety and conduct effecting vulnerable and disadvantaged consumers.

8. Higher penalties

The ACCC has recently made a number of recent statements indicating that it will seek increasingly higher penalties for contraventions of both competition and consumer laws.  In this regard, it has been buoyed by a number of recent decisions of the Federal Court of Australia.

In launching the 2017 Priorities, the Chairman reiterated that it will be pursuing higher penalties to ensure that they provide sufficient deterrents against contravening the law.  He also indicated that the ACCC will lobby the Federal Government for higher penalties for contraventions of consumer laws.

In 2017 we will be making concerted efforts to ensure that the penalties we seek make larger companies and individuals who work in them consider their business practices, and how their business practices meet their obligations under competition and consumer law.

This approach may lead to fewer agreed settlements, at least initially.

We will also continue to advocate for legislative penalties under Australian Consumer Law (ACL) that effectively deter larger businesses from misconduct, particularly through our participation in the current ACL review.

9. So what to expect from the ACCC this year?

In short:

• An increased focus on the conduct of larger companies
• A continuing push for higher penalties, especially against larger companies, to ensure that penalties are a real deterrent and no seen as a cost of doing business
• Specific enforcement activity in a number of areas including private health insurance and further criminal cartel actions
• A strong focus on compliance with the consumer guarantees, extending to those which apply to services
• A strong focus on the provisions of the Australian Consumer Law which render unfair terms in standard form small business contracts void.

A copy of the 2017 ACCC Compliance Enforcement Policy is here and a copy of the Chairman’s speech launching the Policy is here.