New ACCC guidelines for responding to mandatory information notices

Published On 19/09/2016 | By Jessica Waters | Enforcement, Notifications, Reform

The ACCC has published updated guidelines on its use of mandatory information gathering powers, following the release of the Harper exposure draft legislation.

Click here for our insights on how the Harper exposure draft legislation will redefine competition in Australia.

As many companies will be only too aware, the ACCC has compulsory information gathering powers under the Competition and Consumer Act 2010 (CCA), which it can use to compel individuals and companies to:

  • provide information and documents
  • give evidence under oath or affirmation.

These “Section 155 Notices” are used by the ACCC in both enforcement investigations and informal merger reviews.

Proposed changes to Section 155

 To help address the “digital burden” on recipients, the Harper Panel recommended:

  • the ACCC taking responsibility for framing its notice as narrowly as possible;
  • introducing a defence for not complying with a Section 155 Notice where the recipient has undertaken reasonable searches in order to comply;
  • increasing the sanction for non-compliance with a Section 155 Notice to the same level as the fine for non-compliance with equivalent ASIC notices (i.e. up to 1 years’ imprisonment and/or a fine up to $3600 for individuals, and a fine up to $18,000 for companies).

The Harper exposure draft legislation implements the recommended defence for non-compliance, with the burden on the recipient to show they undertook a reasonable search, taking into account the complexity of the matter, number of documents involved, ease and cost of retrieval, and the significance of any document likely to be found.

This defence may help alleviate the burden on recipients, provided they can demonstrate genuine efforts to comply, while the increased sanction for non-compliance (including potential gaol time) provides greater incentive for ensuring searches are comprehensive and reasonable.

What’s new in the guidelines

The updated guidelines may also go some way to reduce the burdens on the recipient, in that they:

  • set out the factors the ACCC considers to try to limit the scope of its request and minimise the compliance and cost burden;
  • state that the ACCC may consult with the proposed recipient, where appropriate, to understand their document management system and digital environment; and
  •  clarify that recipients may raise questions about the request with the ACCC, and make proposals about how they will respond to the request.

The updated guidelines also provide greater transparency around how the ACCC decides to issue a Section 155 Notice and why voluntary requests may not be appropriate.

However, the guidelines do not yet address the reasonable search defence, and will need to be updated, depending on the final form of the legislation when it is passed.

To help people unravel confusion about their rights and obligations when it comes to Section 155 Notices, the ACCC has supplemented its guidelines with a basic guide for individuals and small businesses. The basic guide has handy FAQs and examples along with suggestions about the steps to take if you receive a notice.

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About The Author

Jessica Waters is a Senior Associate in the Competition Law and Regulatory Group at King & Wood Mallesons where she advises on a range of competition and regulatory issues. Jessica is also an ad hoc sports journalist and her travels have led her to practice competition and EU law in London and Brussels, with fleeting stints in Canada and the USA.

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