Preparing for the Future, Today

In March 2015, the ACCC held its Annual National Consumer Congress, bringing together consumer advocates, research bodies, regulators, practitioners, tribunal members and academics to explore the theme “Preparing consumers for the future, today: the upcoming review of the Australian Consumer Law”.

The Congress represents an important forum for those involved in consumer law and practice (particularly advocacy organisations) and was focussed particularly upon the upcoming review of the Australian Consumer Law (ACL).

An array of speakers and panellists representing organisations such as the ACCC, Choice, ASIC, Consumer Affairs Victoria, the Consumer Action Law Centre, the Australian Communications Consumer Action Network and the Consumers Federation participated in the Congress.

King and Wood Mallesons Partner, Caroline Coops, and Special Counsel, Melissa Monks, who attended the invitation only event, provide some key highlights and observations.

“Working together to cement and improve Australia’s Consumer Law”

In his address to the conference Rod Sims outlined the ACCC’s 2014 achievements in relation to ACL matters. He noted the commencement of 20 consumer protection matters, acceptance of 14 consumer protection-related undertakings and issuing of 15 infringement notices, with a total of $14.5 million in penalties. These statistics evidence the ongoing and increasing focus and commitment of the ACCC to pursuing consumer protection matters.

Mr Sims also took the opportunity to comment on the size of penalties for ACL contraventions. We expect the ACCC to advocate for increases to the maximum penalties under the ACL for breach of the consumer protection provisions, and potentially for the inclusion of misleading conduct as a penalty provision. Judicial commentary on the inadequacy of the current penalties lends further support to the ACCC’s position.

Mr Sims re-emphasised the ACCC’s 2015 priorities in his address to the Congress, including product safety, online activities, scam disruption, the medical and health industries, industry codes and carbon tax repeal. A particularly interesting case is the ACCC’s proceedings against Valve, which will test the extra-territoriality reach of the ACL in circumstances where an overseas based company with no physical presence in Australia is selling products to Australian consumers.

Particular emphasis was placed on truth in advertising, with specific reference to food credence claims and discount/savings claims being under scrutiny. Using the example of the recent action by the ACCC about alleged misleading claims in relation to Nurofen, Mr Sims noted that the ACCC will take action where large businesses make misleading claims that can have significant consumer detriment or where similar conduct is likely to become widespread. Notably, truth in advertising is being looked at by the ACCC from both from the perspective of the consumer, as well as that of the “honest trader” who is competing with the company in question.

We expect a high level of enforcement action and an increase in the use of infringement notices in 2015, in addition to the ACCC continuing to look for creative ways to use ACL provisions. An example of this approach is the ACCC’s action against Woolworths in which it contends that the company made misleading representations to consumers that its products were safe by continuing to stock products that the ACCC alleges Woolworths knew were faulty.

Mr Sims also made reference to the enhanced levels of coordination the ACL has brought to regulatory agencies. Mr Sims referred to the ACCC “constantly leveraging off and consolidating on the work of fair trading agencies” and the complementary work done by these agencies on matters of national significance such as Consumer Affairs Victoria’s successful action against Qantas and Dimmeys in relation to product safety matters.

The ACCC’s partnerships with consumer groups was also mentioned, noting that their input helps set priorities and identify issues to pursue such as ACCAN’s referral of unfair contract term issues with internet contracts (leading to the first enforcement outcome) and ICAN’s referral and assistance on unsolicited selling matters in indigenous communities (again leading to enforcement action against Titan Marketing). We have seen the ACCC work closely with consumer groups on matters stemming from complaints from consumer bodies such as CHOICE and ACCAN, and expect this to continue.

Consumer groups

Consumer advocacy groups took the opportunity to highlight some areas of particular concern in the context of the effectiveness of the ACL, including:

  • asymmetry of information or provision of overly complex information – a need to ensure that consumers get the right information was highlighted in a timely and useful fashion;
  • big data – the use of big data by companies to target individual consumers, and its effects on consumers’ ability to effectively compare offers; and
  • testing of uncertain concepts – calls for more testing of the law (potentially through the consideration of key concepts including “major failure” and “reasonable period” under the consumer guarantees regime).

Upcoming – the ACL review

It was confirmed that the review of the ACL will commence in 2015 and be completed by 2017. The review is intended to encompass:

  • a review of the law (in principle and in practice);
  • gaps or areas for improvement; and
  • the experience and lessons from the multi-regulatory approach.

The review will have a Steering Committee that reports to Consumer Affairs Australia and New Zealand, involve a repeat of the Australian Consumer Survey and result in a report with findings, options for reform and recommendations for Government consideration.

We think the review process will present a rare and important opportunity for businesses and other stakeholders to present their views and experiences with the ACL, and to help shape the focusses of consumer protection laws and their enforcement into the future.