strategic priorities

Sounds like a Plan? The ACCC and AER announce strategic priorities

Published On 22/08/2019 | By Rahul Arora | Consumer protection, Enforcement, Litigation, Reform

On 15 August 2019, the ACCC and AER announced their key strategic priorities, activities and capabilities over the next four years (to 2023) in the ACCC and AER Corporate Plan 2019-20 (“Plan”).

Why is this important?

The Plan provides insight into the long-term strategy and capability of the ACCC and AER and reflects the ACCC’s continued focus on its compliance and enforcement priorities, which were released in February 2019 (see our previous blog post here).

The Plan also describes the changing environment in which the ACCC expects to operate, and in doing so, it draws attention to five key areas where the ACCC will focus its capabilities and resources in 2019-20. Highlights from these key areas are as follows:

#1 Data in sharp focus with Customer Loyalty Schemes

In theme with the recent report on its Digital Platforms Inquiry (see more below), the ACCC has commenced a review of customer loyalty schemes, with a particular focus on the collection, use and disclosure of consumer data, and the terms and conditions of loyalty schemes. The report will also consider whether consumers are properly informed about the use and trading of their personal information arising from participation in loyalty schemes, whether consumers actually receive the purported benefits of loyalty programs, and the impact of consumer loyalty on new entrants to the market.

The ACCC intends to release a report later in 2019 after engaging with the operators of major customer loyalty schemes and reviewing publicly available materials on the issue.

#2 Recalls possibly reviewed with product safety focus

Following the release of its product safety priorities in March 2019 (see our previous blog post here), the ACCC has emphasised its continued focus on the safety of consumer products which could result in widespread or serious injury. It appears to be increasingly conscious of changing consumer markets and is particularly concerned about the effectiveness of the compulsory recall of vehicles with Takata airbags, the safety of quad bikes, the exposure of children to button batteries and the safety of products sold on online platforms.

The ACCC will collaborate with state and territory fair trading agencies through the Product Safety Operations Group, as well as other organisations including the Department of Home Affairs and the Department of Health, in order to ensure better safety outcomes.

#3 Infrastructure closely observed

As the rollout of the NBN continues, the ACCC has also continued to focus on addressing NBN pricing and performance issues and ensuring that consumers have the necessary information when selecting a service. Further, the ACCC will continue to focus on the regulation of natural monopoly infrastructure services, particularly in areas such as financial infrastructure services, airports and road pricing.

#4 Consumer Data Rights to proliferate across industries

The consumer data right enables customers to share their transaction, usage and product data with service competitors and comparison services if they choose to do so. With the law to establish the consumer data right now in place, the ACCC’s plan for this area is still in sharp focus. In particular, the ACCC will continue to implement the consumer data right in relation to banking, followed by the energy sector and then the telecommunications sector. In doing so, the ACCC will consult publicly with relevant stakeholders and will work closely with the Office of the Australian Information Commissioner and the Data Standards Body.

#5 More inquiries to come

Following the ACCC’s release of its final report on its inquiry into Digital Platforms on 26 July 2019, the ACCC’s immediate next step appears to be assisting with the implementation of those recommendations arising from the report which are adopted by the Government, The ACCC is also currently investigating potential breaches of the Competition and Consumer Act 2010 (Cth) by digital platforms.

In addition, the ACCC has stated its intention to commence or complete 3 inquiries in 2019-20, including in relation to:

  • water trading in the Murray Darling Basin;
  • foreign currency conversion services; and
  • the supply of home, contents and strata insurance to consumers in northern Australia.

What does this mean going forward?

The ACCC and AER’s Corporate Plan has been prepared for the 2019-20 reporting period, but it also covers the next four annual reporting periods through to 2022-23.

Interestingly, the Plan contains four-year budget estimates for the ACCC and AER, with the ACCC’s revenue forecasted to decline from $167.36 million in 2019-20 to $138.73 million in 2022-23. The AER budget is expected to stay relatively consistent over the next four years at approximately $67 million each year.

Nevertheless, businesses can expect strong engagement and enforcement action from Australia’s competition regulator. In particular, its eternal priorities of promoting competition and protecting consumers can be seen as translating into an increased focus on customer loyalty schemes, product safety, infrastructure, digital platforms and consumer data rights.

Sounds like a Plan?

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About The Author

Rahul Arora is a law graduate in the competition litigation team in the Sydney office of King & Wood Mallesons

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