ACCCount on me, says the ACCC
The ACCC has published its report on activities for the last quarter of 2019, highlighting the regulator’s key wins, decisions and inquiries in the period. A brief survey of these developments is ACCCounted for in this blog.
Competition law: ACCCounting outcomes
The ACCC broke new ground in enforcing Australia’s competition laws.
In addition to a high level of activity in the merger space, including pre-assessing 61 mergers confidentially and undertaking 10 public reviews, the ACCC accepted court-enforceable undertakings from two Sydney roofing companies after their directors discussed prices of roof repair services on Facebook in a manner that was likely to contravene the prohibitions on attempted price-fixing and anti-competitive concerted practices.
This is significant in that it marks the first time an enforcement outcome has been reached in relation to anti-competitive concerted practices, which have been prohibited since the adoption of the Harper reforms in November 2017.
Separately, the Commission brought its first proceedings in the Federal Court under the new misuse of market power provision, alleging that TasPorts tried to prevent a new entrant, Engage Marine, from competing effectively with TasPorts’ marine pilotage and towage businesses.
Consumer law: ACCCounting records
The ACCC concluded four cases under the Australian Consumer Law (ACL), chalking up $135.56 million in total penalties. Most of that was a result of the Federal Court ordering Volkswagen to pay $125 million for making false representations about compliance with diesel emission standards. This represents the largest penalty ever imposed under ACL (and the CCA more broadly).
The Federal Court also ordered Optus to pay penalties of $6.4 million for misinforming customers that their home broadband services would be disconnected. Optus encouraged those customers to upgrade to Optus NBN Broadband ‘before it’s too late’ despite there being no possibility of immediate disconnection. This is the second time in two years that the Federal Court has penalised Optus for misleading customers about the need to upgrade to NBN services.
The ACCC commenced an additional four cases relating to consumer protection, adding to the 30 cases carried over from the previous quarter. The highest profile targets are Google LLC and Google Australia Pty Ltd, following the institution of proceedings which allege that Google misled Android mobile phone users about the location data that would be collected when certain settings were enabled and disabled.
Another target is Oscar Wylee, which the ACCC is alleging to have represented to consumers that it would donate a pair of glasses for every pair of glasses purchased, despite only donating around 3,000 pairs of glasses during a period in which customers bought over 320,000 pairs of glasses. The ACCC is seeking declarations, penalties, injunctions, corrective publications orders and an order to implement a consumer law compliance program.
Codes and inquiries: ACCCounting industry
Digital Platforms Inquiry
The Australian Government released its response to the ACCC’s Digital Platforms Inquiry, announcing that it supported – either fully or in principle – the key components of 16 of the ACCC’s recommendations. The Government will establish and fund an ongoing branch in the ACCC to report on the state of competition in digital platform markets. That branch launched its first inquiry into ad tech services and advertising agencies last week, on referral by the Treasurer, who also formally extended the Digital Platforms Inquiry.
Banking and Consumer Data Rights
Late last year the Treasurer directed the ACCC to conduct a further inquiry into home loan pricing, with an interim report to be provided by 30 March 2020.
Separately, the ACCC authorised updates to the Australian Banking Association’s Banking Code of Practice. Key matters that the updated code prohibits include:
- informal overdrafts on low or no fee basic accounts not agreed to by customers;
- charging overdrawn and dishonour fees; and
- charging default interest and fees on agricultural loans in areas affected by drought and other natural disasters.
The update also codifies the concept of a basic bank account product, which includes no minimum deposits, free direct debit facilities, access to a debit card at no extra cost and free unlimited domestic transactions.
The ACCC continued to work on the development of the Consumer Data Right (CDR) in the banking sector. The regulator released a consultation paper and announced that the launch of the CDR would be postponed from February to July 2020 to allow the major banks to develop and test the necessary IT, security and privacy systems.
The ACCC announced the introduction of a mandatory dairy industry code. This was a key recommendation of the ACCC’s 2018 dairy inquiry. The code will come into effect from 1 January 2020.
On 14 October 2019, the ACCC launched an inquiry into NBN wholesale pricing. The inquiry will focus on whether the prices that retail service providers (RSPs) pay to NBN Co for network access supports a smooth transition for consumers of legacy services (e.g. ADSL) to the NBN.
The above developments highlight the ACCC’s continued work in enhancing consumer welfare through the promotion of competition and regulation of national infrastructure.