What you need to know
- The ACCC has identified the agriculture and health sectors as key focus areas for 2016. In addition to its enduring areas of interest, such as cartel conduct, the ACCC also highlighted a greater focus on big businesses, consumer guarantees, industry codes and increased competition advocacy and market studies.
- A continuing high profile for consumer law enforcement aligns with the commencement in 2016 of a broad review of the Australian Consumer Law (ACL) by Consumer Affairs Australia and New Zealand.
- In the main the ACCC’s priorities are unsurprising, given they represent a broad continuation of the regulator’s focus over the last few years. However, our experience suggests that in executing its priorities the ACCC is increasingly willing to aggressively investigate complaints or possible issues, reflecting the ACCC Chairman’s stated preference for “strong enforcement”. As a result, clients involved in ACCC priority areas should remain mindful that the risk of regulatory scrutiny is high.
In his first public address for the year, the ACCC Chairman, Rod Sims, revealed the regulator’s 2016 Enforcement and Compliance Policy (Policy) on 23 February 2016. The Policy outlines the approach the ACCC will take to its compliance and enforcement functions for the year. Details about the 2016 priorities are outlined below.
Key Focus Areas – Agriculture & Health
Competition and consumer issues in the agriculture sector are a new priority in 2016, which is consistent with the ACCC’s on-going interest in the grocery sector and the Federal Government’s Agriculture White Paper published in 2015.
A clear indicator that the ACCC is taking this priority seriously is the establishment of the Agriculture Enforcement and Engagement Unit, and the appointment of Mick Keogh OAM as the inaugural Agricultural Commissioner for a period of 5 years. It is anticipated that Mr Keogh will, in conjunction with the Agriculture Enforcement and Engagement Unit, gather intelligence to assist the ACCC in better understanding and addressing the market issues facing the agriculture sector.
In the wake of the ACCC’s successful interventions last year in the health and medical sectors, these areas will continue to be a priority for the ACCC in 2016. Some particular issues raised included adequate disclosure by providers of health services – such as private health insurers or private hospitals – and potentially misleading health claims associated with the product marketing / advertising.
Big Business Focus
The ACCC’s enforcement priorities continue to give consumer law enforcement a high profile. In particular, the ACCC will be focused on big businesses in relation to express or extended warranties and misleading conduct, given that they are “often seen as benchmarks for behaviour and compliance and accordingly have a disproportionate influence on marketplace behaviour.”
New Priorities: Industry, Advocacy & Market Studies
The ACCC Chairman stated that he wants to see the ACCC do more competition advocacy and market studies, commenting that promoting competition and pro market reforms should not wait for a Hilmer or a Harper Review.
Mr Sims also restated a focus on the enforcement of industry codes of conduct as a wider priority, including the Food and Grocery Code of Conduct, the Franchising Code of Conduct and the revised Horticulture Code of Conduct.
Cartel conduct, anti-competitive agreements and practices and misuse of market power continue as enduring priorities for the ACCC, with one addition this year – indigenous consumer protection. The elevation of indigenous consumer protection to an enduring priority is recognition of the challenges faced by indigenous consumers in asserting their consumer rights.
Cartels will remain a major focus of the ACCC and its international counterparts. Interestingly, Mr Sims foreshadows one or two criminal prosecutions in 2016. Cartel conduct has been both a criminal and civil offence since 2009 and we wait with interest to see how the first criminal cartel prosecutions will unfold.
Pleasingly, in his closing remarks, Mr Sims noted that the ACCC will this year be looking to provide greater transparency in its work by improving explanations of its decisions and setting out the factors it considers when deciding to take action. This complements the appointment of Dr Graeme Woodbridge as the ACCC’s first Chief Economist in December 2015, when Mr Sims commented: “The Chief Economist will also help to communicate with business and to inform markets and consumers about the economic foundations of our decisions.”
The Policy provides an insight into the areas that are likely to attract increased attention from the ACCC this year and a valuable benchmark against which business can review their existing policies and practices.
It also demonstrates a busy year ahead for the ACCC, particularly if the existing trend for “strong enforcement” continues. However, the ACCC’s Annual Report for the last three years continues to show a trend of limited resourcing and funding, including a marked reduction of staff within the organisation. How these competing factors will manifest themselves in the ACCC’s implementation of the Policy and which areas receive the most attention remains to be seen.