In launching the ACCC's 2015 Compliance and Enforcement Policy, Chairman Rod Sims has identified the regulator's strategic priorities for the year ahead. A number of 2014 priorities remain a focus, however closer scrutiny can be expected by businesses involved in government procurement, the medical and healthcare sector and franchising.
New priorities in 2015
Cartel conduct in government procurement
Cartels are an ongoing priority for the ACCC, with around a dozen ongoing cartel investigations currently underway. However, in 2015 the ACCC has identified government procurement as an area deserving greater attention due to the size of budgets and the particular requirements of the procurement process.
As well as conducting its own increased monitoring and investigations, the ACCC will be assisting government procurement officers to identify suspicious conduct.
Businesses regularly contracting with government should consider whether any of their practices risk falling foul of the cartel conduct provisions.
Truth in advertising
Truth in advertising has always been a concern for the ACCC: false advertising causes consumers to be misled and puts honest traders at a competitive disadvantage. Including this area as a priority is a clear signal that the ACCC will continue taking a firm stance on any false, misleading or deceptive advertising. The ACCC will particularly concentrate on misleading claims by large businesses that have the potential to cause significant consumer detriment. Smaller business will also be targeted where the ACCC forms the view that their conduct has the potential to become widespread if left unchecked.
Medical and health
The medical and health sector is a new priority area in 2015. The ACCC has flagged its particular concern with conduct which limits access to products, patients, procedures or facilities, particularly in regional areas.
Practices such as restricting doctors from providing services to competing facilities have been singled out. Such a case is currently before the Federal Court.
Consumer issues such as unconscionable conduct and misleading and deceptive conduct by medical professionals will also attract increased attention.
The ACCC will extend its focus on compliance with industry codes of conduct in 2015 in order to protect small firms.
In particular, enforcement activity is expected in relation to the mandatory Franchising Code of Conduct, amendments to which came into force on 1 January this year. The ACCC now enjoys new powers to issue infringement notices to corporations where the ACCC has reason to believe there has been a contravention of the code. Significant penalties may also be sought before the courts for a number of contraventions. The ACCC considers that these remedies will increase the effectiveness of its enforcement activity and contribute to greater compliance in the franchising sector.
The ACCC's continued work to secure a code of conduct to address unfair practices in the grocery sector will also be a major focus area in 2015.
Other key activities in 2015
Harper Competition Review
The competition review panel is only weeks away from providing its final report to Government. It will address policy responses to both remove barriers to competition and ensure the appropriateness of competition laws. More information about the review can be found in our recent eBulletin Mending or just amending competition law - The legislative changes recommended by the Harper Review.
Late last year the report of the Financial System Enquiry undertaken by David Murray was provided to the Treasurer. The report identified competition as one of the main areas where there is significant scope to improve the functioning of the financial system.
The ACCC has expressed its support for these findings, indicating an intention to apply greater competitive pressure on the four major banks in particular.
The Commission has also indicated it will be working with the Council of Financial Regulators and the financial services sector to consider the benefits of breaking up the ASX monopoly and introducing competition in equities clearing.
State and territory privatisations
In 2015 the ACCC will continue to monitor the various sales programs being conducted by State and Territory Governments. It is concerned that in the past governments have sought to maximise their sale proceeds by raising prices just before a sale, or by implementing anti-competitive or regulatory arrangements that allow price rises post sale. As a result, the Commission says, consumers have understandably but erroneously associated privatisation of assets with higher prices.
The ACCC has indicated its intention to speak out where it believes significant assets are being sold without appropriate market structures or access and pricing arrangements. The Commission will scrutinise arrangements that appear to limit competition or avoid appropriate regulation in an attempt to boost sale proceeds.
These comments are consistent with the ACCC's submission to the Senate standing economics committee inquiry intoPrivatisation of state and territory assets and new infrastructure.
Transition to NBN Services
Competition issues arising from the construction of the NBN and the smooth transition for consumers to new NBN services will be a focus for the ACCC in 2015.
This will involve consulting with industry to ensure that Telstra does not obtain an unfair competitive advantage from its arrangements with NBN Co, as well as finalising the terms and conditions of access to a range of services including the legacy services provided over Telstra’s copper network.
Reviewing of water rules in the Murray-Darling Basin
Following last year's independent review of the Water Act 2007,the ACCC has been asked to review the water charge rules which regulate charges for water infrastructure, planning and management in the Murray-Darling Basin.
In 2015 the ACCC will consider how to ensure greater consistency in charging regimes across the Basin while reducing regulatory burdens. Following extensive public consultation, it is expected that the ACCC will present its advice to the Minister by the end of the year.
The 2015 Compliance and Enforcement Priorities document confirms that the ACCC will continue to vigorously investigate and enforce breaches of the competition and consumer laws, and provides guidance on areas that are likely to attract increased scrutiny. However, it also provides an opportunity for businesses to review practices and policies, ensure their ongoing compliance and avoid attracting the attention of the regulator.