The introduction of the Australian Consumer Law (ACL) in 2010 was underpinned by the ‘Intergovernmental Agreement for the Australian Consumer Law’ signed by the Council of Australian Governments (Intergovernmental Agreement). Among other provisions, the Intergovernmental Agreement requires the enforcement and administration of the ACL to be reviewed within seven years of its commencement.
Five years have passed and the ACL is subject to extensive review.
Consumer Affairs Australia and New Zealand (CAANZ) is currently conducting a review of the ACL (CAANZ Review), which will involve an extensive public consultation process.
A call for public stakeholder submissions to the Issues Paper released on 31 March 2016 closed on 27 May 2016 and we expect the submissions to be published on the ACL website during July 2016.1
For those direct selling companies that missed the opportunity to voice their opinions in the first round, it is understood that the interim report, which is expected to be released in September or October 2016, will be followed by a second public consultation process.
As outlined in our earlier Focus Paper about the CAANZ Review2, this will provide the direct selling community with a significant opportunity to voice its concerns about the ACL provisions of relevance, such as those requirements concerning ‘unsolicited consumer agreements’ (UCAs).
The final report is due to be released in 2017.
QUT Comparative Analysis
As a part of the CAANZ Review of the ACL, CAANZ commissioned the Queensland University of Technology Faculty of Law to conduct a Comparative Analysis of Overseas Consumer Policy Frameworks (QUT Comparative Analysis)3 by reference to the consumer laws of comparable jurisdictions, such as the European Union (EU), United Kingdom (UK), United States, Canada and Singapore.
The QUT Comparative Analysis was released in April 2016.4
Relevantly, the QUT Comparative Analysis was commissioned to review international approaches to unconscionable or highly unfair trading practices, with a particular focus on pyramid selling and unsolicited selling. The QUT Comparative Analysis sets out extensive findings regarding general and specific regulatory protections in respect of unfair commercial practices and observes that the key point of distinction between the ACL and comparative frameworks in the EU and UK is the absence of a general prohibition against unfair commercial practices. This corresponds with the CAANZ Issues Paper, which contemplates and seeks comment on the merits of introducing a general prohibition to address unfair commercial practices and enhance the overall level of consumer protection under the ACL, consistent with the positions in the EU and UK.
Although the QUT Comparative Analysis identifies key differences in the policy approaches in Australia and various foreign jurisdictions considered, it does not make any recommendations or express any opinion in respect of the comparative merit of these approaches.
However, it is likely that CAANZ will consider these findings in its review of the ACL and in preparing its final report.
Productivity Commission Review
One of the terms of reference of the CAANZ Review requires that the ‘single-law, multiple regulator model’ be assessed independently. Accordingly, on 29 April 2016, the Productivity Commission was commissioned to undertake a review of the enforcement and administration of the ACL (Productivity Commission Review).
Specifically, the Productivity Commission has been commissioned to study the effectiveness of the ‘multi-regulator model’ underpinning the single national consumer policy framework, which is enforced and administered by the Australian Competition and Consumer Commission (ACCC), the federal consumer watchdog, together with State and Territory consumer law regulators.
As set out in the Terms of Reference5, the Productivity Commission will consider:
- the complementary roles played by the ACL regulators, with a view to improving coordination, consistency and collaboration in the administration of the ACL;
- the respective roles of ‘specialist safety regulatory regimes’ (such as the Therapeutic Goods Administration and Food Standards Australia New Zealand), with a focus on the clarity of the delineation of roles between regulators and consumer protection;
- the effect of changes in resourcing and regulator involvement in the administration of the ACL (including the national product safety law); and
- the merits of alternative consumer protection models in place in overseas jurisdictions.
There will be an opportunity for interested parties to make submissions following the release of an issues paper which is expected in July 2016. Direct selling companies will have an opportunity to discuss their experiences dealing with the ‘multi-regulator model’ and put forward any suggestions to improve the efficacy of the system.
The Productivity Commission’s report is expected by March 2017 and will assist CAANZ in the preparation of its final report.
What happens now?
Addisons’ Direct Selling team will continue to monitor the progress of the CAANZ Review and the Productivity Commission Review and keep you informed of any significant developments or deadlines.
As outlined above, interested parties will have a second opportunity to lodge submissions in respect of the CAANZ Review following the release of the interim report in the second half of this year. There will also be an opportunity for public submissions to be made to the Productivity Commission Review following the release of an Issues Paper due in July 2016.