March 2014

As part of an annual practice that has developed over the past three years, the Australian Competition and Consumer Commission (ACCC) has once again given guidance to Australian businesses on its compliance and enforcement priorities for the coming year. On 21 February 2014, ACCC Chairman Rodney Sims announced the ACCC's priorities for 2014, reaffirming ongoing areas of focus and highlighting new issues in response to up-and-coming sectors in the Australian economy.

Reaffirming ongoing priorities

The ACCC remains committed to addressing issues of cartel conduct, anti-competitive agreements, secondary boycotts and misuse of market power, which the ACCC will continuously enforce. In a confirmation of previous years' priorities, consumer and competition issues relating to the supermarket and fuel industries remain a priority. The ACCC will also continue to place product safety as a priority, with the focus on low-cost imported goods that are being sold by large Australian retailers.

New priorities

Energy and telecommunications sectors

In 2013, the ACCC focused on addressing unlawful door-to-door sales conduct engaged in by energy companies, which saw AGL Energy and Australian Power and Gas (APG) liable for more than $1 million in penalties. However, in 2014, the ACCC's focus will shift towards misleading discount claims made by energy companies when advertising their energy plans. In particular, the ACCC is concerned with the advertising or promotion of savings and/or discounts of energy usage or supply charges on those particular plans. The ACCC predicts future court action in this area.Additionally, following the High Court's 2013 decision to impose a $2 million penalty against APG, the ACCC will continue to scrutinise the sales and advertising practices in the telecommunications industry.

Online marketplace and "drip pricing"

In 2013, group buying websites were a focus of the ACCC. This year, the focus will shift towards comparator websites and the issue of "drip pricing". Comparator websites are those that allow consumers to compare prices and offers by a number of companies in the relevant industry. There is a possibility that these websites may mislead consumers. In 2014, the ACCC will work together with industry to improve standards for comparator websites and take enforcement action, if necessary.

Drip pricing relates to the gradual addition of fees and charges throughout the online payment process, which can sometimes see a significant increase to the "headline" price that is advertised and/or which consumers see. This drip pricing conduct is often seen when purchasing airfares or concert tickets online. The ACCC has identified this particular behaviour as potentially misleading and foresees future litigation in this area.

Disruption of scams

In 2014, the ACCC will prioritise the disruption of scams by working collaboratively with state and territory agencies, as well as money remitters, such as Western Union, to prevent fraudulent funds transfers and to protect victims. It is the ACCC's aim to identify victims of scams and contact them to stop the flow of money being sent to scammers.

Complexity and unfairness in consumer or small business contracts

The ACCC will be moving away from a compliance-based approach to issues of unfair contract terms and towards a more enforcement-based approach. It is likely that the ACCC will initiate enforcement actions within the next 12 months.

Credence claims

The ACCC will be particularly interested in the investigation of credence claims this year. The Chairman has made particular reference to claims that mislead consumers by portraying large manufacturers as small or niche businesses. This behaviour is potentially misleading to consumers who may purchase a product because they believe they are supporting small business. It is the ACCC's concern that this conduct will be detrimental to consumer confidence in marketing claims and also adversely impact innovation and competition.

Extended warranties

In 2014, the ACCC intends to focus on the sale of extended warranties offered by suppliers and manufacturers. There is concern that consumers may be misled into believing that they need to pay for rights that are already afforded to them by consumer guarantees under Australian consumer law.

Carbon tax repeal

Perhaps the most high-profile area in which the ACCC intends to prioritise is the regulation of energy prices throughout the carbon tax repeal process. The ACCC will closely monitor whether prices reflect the repeal of the tax in the interests of protecting consumers.