From the ladle to the grave: food and funerals in the spotlight as ACCC announces 2020 enforcement priorities
ACCC Chair Rod Sims announced the ACCC’s 2020 compliance and enforcement priorities during his annual speech at the Committee for Economic Development of Australia on 25 February 2020.
In his speech, Mr Sims outlined the sectors and issues that the ACCC will be focusing on in the coming year, including unconscionable conduct issues in the funeral industry, misleading claims in relation to food marketing and issues around the use of personal data.
ACCC dead serious about funeral industry issues
Topping the ACCC’s list of priorities are competition and consumer issues in the funeral services sector, which Sims says have long provoked complaints from the public, governments and generated stories in the media.
Noting heavy concentration, the ACCC Chair outlined a plethora of alleged issues in the industry including high prices, hidden fees and lack of price transparency, misleading and deceptive practices, misuses of market power, exclusive dealing, unfair contract terms and unconscionable conduct. With such a long list of grievances, there’s no doubt that the Commission will be dying to investigate.
The Commission is again setting its sights on misleading and deceptive conduct in relation to the sale and promotion of food products, with attention to be focused on claims about the nutritional or health content of foods on labels and in associated marketing. Misleading food labels have been a longstanding source of concern for consumer advocates, with Choice Magazine leading campaigns on this issue.
It’s likely that the Commission was emboldened by its victory against Heinz in 2018, where the company was ordered by the Federal Court to pay $2.25m for representing that its ‘Little Kids Shredz’ products were beneficial for young children, when in fact the products’ composition was approximately two-thirds sugar. At the time, the ACCC complained that a stronger penalty was required.
The size of monetary penalties imposed for consumer law breaches will be an area to watch more generally, after the maximum penalty thresholds for breaches of the Australian Consumer Law were increased, with effect from 1 September 2018. This is in addition to the Volkswagen decision, in which the car maker was fined a record $125m (under the old penalty regime) for making false representations about its vehicles’ compliance with Australian diesel emissions standards (previously blogged about here). That case is now under appeal, but the Commission has made no secret of its desire to achieve penalties which “grab the attention of boards, senior management and shareholders.”
Other misleading and deceptive practices
Issues around consumers being misled over the collection and use of their personal data are another priority for the ACCC. The Commission has flagged its concerns over such issues in several forums recently, including the Digital Platforms Inquiry final report (where it found that consumers are largely unaware of the extent to which businesses collect and use their personal data) and also in its review of customer loyalty schemes last year.
Misleading and deceptive selling practices of essential services are also on the Commission’s hit list, particularly within the energy and telecommunications sector. Mr Sims confirmed that the ACCC will be looking to take more regular action against major telecommunications companies for poor selling practices, as well as monitoring energy prices, including via the Federal Government’s recently introduced electricity market misconduct laws, which will take effect from June 2020.
New to the agenda is the implementation and enforcement of the recently-enacted Dairy Industry Code of Conduct (previously blogged about here).
The Commission will also continue to monitor a number of ongoing areas of interest, including:
- the Takata airbags recall;
- regulation of button battery safety;
- consumer protection for small businesses (e.g. through the Franchising Code of Conduct);
- enforcement of consumer guarantees (particularly for motor vehicles and white goods); and
- the commercial construction sector, with investigations underway into secondary boycotts.
Enduring priorities and advocacy work
The ACCC’s enduring priorities (which run alongside its 2020 compliance and enforcement priorities) relate to cartels, anticompetitive agreements and misuse of market power.
The Commission expects to institute at least two new cartel cases this year and at least four new competition cases. In addition to these ‘big-ticket’ items, the ACCC is also continuing its various market studies and inquiries, with inquiries into Northern Australian insurance, gas supply arrangements and Murray Darling Basin water markets currently on foot.
In his speech, Mr Sims also hinted that the ACCC would be lobbying for the introduction of a general regulatory regime for infrastructure monopolies that are not vertically integrated, after the declaration of the shipping channel service at the Port of Newcastle was revoked – a decision the ACCC Chair has made no secret of his concerns about on several occasions now.