ACCC announces its compliance and enforcement priorities for 2021

On 23 February 2021, Chairman Rod Sims announced the ACCC's 2021 competition and consumer law compliance and enforcement priorities. Key industry sectors the ACCC will be focusing on in 2021 include:

  • essential services (particularly energy and telecommunications);
  • financial services;
  • digital platforms;
  • commercial construction;
  • travel and aviation;
  • franchise relations;
  • agriculture;
  • motor vehicles and caravans; and
  • funeral services.

The ACCC will also be working to improve compliance with the following competition and consumer law issues:

  • consumer guarantees (including advocating for non-compliance with the consumer guarantees regime to be made unlawful);
  • product safety (particularly for new safety standards introduced for button batteries and quad bikes); and
  • matters generally related to the COVID-19 pandemic, including the promotion and sale of products (notably the cancellation of travel and events) and competition in the domestic air travel market.

The ACCC will continue its ongoing focus on digital platforms, ad tech, and app marketplaces, following the establishment of its Digital Platforms Branch in 2020.

The ACCC will also continue to advocate for changes to merger laws, which Mr. Sims described as being "skewed towards clearance."

Mr. Sims also noted upcoming litigation being brought by the ACCC this year, including at least two more cartel cases.

Many of these priorities have been carried over from 2020 due to the COVID-19 pandemic. The ACCC was required to shift its focus to respond to unforeseen priorities such as interim authorisations.

For more information, please refer to our more detailed alert prepared by Baker McKenzie (see here) or the ACCC's media release (see here).

Shipping company criminally convicted and fined AUD 24 million for cartel conduct

Wallenius Wilhelmsen Ocean AS ("WWO") is the third company to be criminally convicted in the shipping cartel, taking total penalties to AUD 83.5 million (approx. USD 64 million).

After pleading guilty on 18 June 2020, WWO was convicted and sentenced for engaging in cartel conduct with other shipping companies between June 2011 and July 2012. This is the third conviction and fine to be issued following an extensive investigation by the ACCC into an international cartel involving several shipping companies which shipped vehicles to Australia from Asia, Europe, and the U.S. for major car manufacturers.

In August 2017, Nippon Yusen Kabushiki Kaisha was fined AUD 25 million (approx. USD 19 million), while K-Line was fined AUD 34.5 million (approx. USD 26 million) in August 2019. WWO, along with the other shipping companies, were found to have given effect to a cartel provision by allocating major vehicle manufacturing customers between themselves, including on specific shipping routes to Australia. The Federal Court said the cartel had the capacity to limit or distort the competitive setting of freight rates and was likely or at least had the potential to impact the prices paid by Australian consumers.

WWO was also penalised in other jurisdictions, including the U.S., Europe, Japan, South Korea, and China. The ACCC said that its investigation was assisted by the U.S. Department of Justice, FBI, the Japan Fair Trade Commission and the European Commission.

For more information, please refer to the ACCC's media release (see here).

Sporting goods wholesaler fined AUD 350,000 for resale price maintenance

F.E. Sports, a sporting goods wholesaler, was penalised AUD 350,000 (approx. USD 270,000) by the Federal Court for engaging in resale price maintenance ("RPM") despite prior warnings from the ACCC.

Between February 2017 and June 2019, F.E. Sports issued 328 agreements to existing and prospective dealers (242 were entered into) relating to the supply of bicycle products and accessories. These contained terms prohibiting the dealer from advertising or promoting certain brands of products online for below the recommended retail price.

The penalty reflected a 30% discount on an appropriate penalty of AUD 500,000 (approx. USD 380,000) to account for F.E. Sports' cooperation with the ACCC. F.E. Sports had amended its dealer agreements to remove the contravening provisions when the ACCC previously raised concerns; however, unbeknownst to its directors, its former marketing manager continued to use the old form of agreement. F.E. Sports' cooperation also included admitting its contraventions.

The Court also found the conduct only affected a portion of F.E. Sports' business, with no broader corporate strategy of engaging in resale price maintenance. Further, F.E. Sports had not withheld supply from any dealers.

The Court also noted that F.E. Sports was a small to medium enterprise, and accordingly, the penalty was sufficiently large that it was not seen as a "mere cost of doing business." In addition to the penalty, the Court also ordered that F.E. Sports:

  • refrain from including terms prohibiting discounting in its contracts with dealers;
  • write to each affected dealer confirming they can set their own prices; and
  • implement an internal compliance program to "improve company-wide awareness."

This case also highlights the importance of directors and senior management ensuring that compliance changes are fully implemented within a business. For more information, please refer to the ACCC's media release (see here).

ACCC continues digital platforms focus

The ACCC has published its interim report into Digital Advertising Services, as well as releasing an issues paper on search services and web browsers.

The ACCC has published its interim report into Digital Advertising Services and released an issues paper on search services and web browsers.

On 28 January 2021, the ACCC released its 'AdTech' inquiry interim report. The purpose of this inquiry is to examine the digital display advertising supply chain in Australia, which enables the near-instantaneous delivery of AUD 3.4 billion (USD 2.6 billion) of digital display advertising opportunities on news, entertainment, and other websites and apps each year.

In its interim report, the ACCC made preliminary findings to the effect that there was a lack of competition and transparency in the digital advertising technology industry. The interim report includes a wide range of options to address the competition issues identified. These include proposed conflict of interest rules that promote competition in the industry by boosting data portability and interoperability between various competing services, introducing an unfair practices provision, and establishing an ombudsman scheme to resolve complaints and disputes with digital platforms.

The inquiry is expected to publish its final report by 31 August 2021.

On 11 March 2021, the ACCC published an issues paper on market dynamics and consumer choice screens in search services and web browsers. This report is part of the ACCC's Digital Platforms Services Inquiry which will run until 2025. The ACCC is due to issue an interim report on search services and web browsers in mid-April 2021

For more information, please refer to the ACCC's media release (see here).