Trends & Lessons from Recent ACCC Litigations: Practices to Avoid

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In its most recent annual report, the Australian Competition and Consumer Commission identified enforcement priorities for 2017. While some of these are of more obvious importance to small NSW enterprises, all are relevant because they affect the environment within which small businesses operate.


These priorities also suggest some active steps that businesses should take to stay within both the spirit and the letter of the Competition and Consumer Act 2010, not coincidentally avoiding scrutiny.


Enforcement priorities


The latest report defines broad policy goals and then lists both enduring and current priorities. Among its enduring priorities are cartel conduct causing detriment in Australia; anti-competitive agreements and practices; the misuse of market power; and product safety issues which have the potential to cause serious harm to consumers, especially those who are vulnerable or disadvantaged, including Indigenous consumers living in remote areas. The thread that holds it all together is a focus on business-to-business behaviour.


Newly under the microscope are issues arising within:

  • the agriculture sector;
  • the commercial construction sector;
  • private health insurance;
  • new car retailing, including responses by retailers and manufacturers to consumer
  • guarantee claims;
  • broadband speed and performance claims;
  • consumer guarantees, including those provided by the airline industry;
  • country of origin labelling laws;
  • new excessive payment surcharge laws;
  • commission-based sales business models;
  • unsafe products introduced into Australia via internet platforms;
  • protection of small business under the Franchising Code, the Food and Grocery Code, the Horticulture Code, and the new unfair contract terms law.


There is no reason to breathe a sigh of relief simply because your business is not a large multi-national enterprise, like many engaged in the airline industry or automobile manufacturing industry. In last year’s Flight Centre decision, for example, the ACCC prevailed in its enforcement action against a travel agency, accused of anti-competitive practices in its dealings with several international airlines. It was Flight Centre, not Singapore Airlines, that got swept up in the enforcement net.


Practical steps

There are four important steps a business can take to avoid inadvertently becoming the target of an ACCC investigation:


Conduct regular risk audits


It is important to have a process in place to identify exposure risks for anti-competitive behavior. Does your business have protocols in place for information sharing at trade meetings, for example? Frequent complaints about a particular issue might signal potential risks under competition or consumer law. Do not hesitate to seek legal advice when a potential risk is identified. Prevention may be much cheaper than defending against enforcement action, and as evidence of good intent, may reduce any penalty.


Establish and maintain a compliance program


An internal compliance program is the first line of defense, but it is important to ensure that it is consistently and effectively implemented. Training in the requirements of the law should be provided regularly to new and existing staff.


Review internal processes, protocols and record keeping


In the event your business receives an ACCC inquiry, the best response is timely and complete. Keep in mind that many anti-competitive enforcement actions involve some element of intent. Record keeping that demonstrates that a particular practice occurred in the normal course of business may support a company’s position that it was undertaken for lawful purposes, for example.


Stay current with changes in the law


Although the ACCC’s general focus may remain the same over time, particular targets may change, as the newest ACCC annual report makes clear.


At Owen Hodge Lawyers, we look forward to helping you to make sure that your business complies with the changing focus of competition and consumer law. Please call us at your earliest convenience at 1800 770 780 to schedule a consultation about the new ACCC enforcement litigation and the steps you can take to ensure that your business stays in compliance.


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