In competition blog post - ACCC reports

Not beating ACCCount the bush: ACCC reports on the January to March Quarter

Published On 18/08/2020 | By Carla Massaria | Authorisations, Consumer protection, Enforcement, Litigation, Mergers, Reform

This article was written by Natalie Stianos and Carla Massaria.

The ACCC has published its quarterly ACCCount report for 1 January to 31 March 2020, providing some insight into its performance and activities over that period. The ACCC reports on its approach and actions in light of COVID-19 as well as key enforcement outcomes, merger activity and its spate of market studies and research.

Compliance and enforcement priorities – take two

The ACCC acknowledged that whilst its 2020 Compliance and Enforcement Priorities (announced in February 2020) remain in place (see our earlier post), it has subsequently refocused on more pressing competition and consumer issues arising from the COVID-19 pandemic – including business conduct that intends to exploit the crisis to enhance commercial positions or harm consumers.

In particular, during the quarter, the ACCC:

  • established the COVID-19 Taskforce to respond to the evolving competition and consumer issues facing Australian communities;
  • raised awareness of consumer rights, such as travel or event cancellations (see the ACCC’s webpage “COVID-19 (coronavirus) information for consumer” for an example);
  • conducted targeted scams analysis to identify COVID-19 scam trends;
  • worked with international counterparts to share experiences and responses to the pandemic; and
  • has been closely monitoring essential infrastructure and associated sectors, such as telecommunications, petroleum and rail. For example, the ACCC is looking at whether sustained reductions in crude oil prices are passed on to consumers.

Interim authorisations – the new vogue

On the topic of COVID-19, the pandemic has also resulted in a significant up-tick of authorisation applications to the ACCC, as businesses in a variety of sectors continue to experience disruption (previously blogged about here). The total number of new authorisation applications received by the ACCC from 1 January – 31 March 2020 was 13. This is a marked increase from the quarterly report for 1 October – 31 December 2019, which reported 6 new authorisation applications.

In response to these applications the ACCC issued a number of urgent interim authorisations, noting the exceptional circumstances. These authorisations allow coordination and cooperation between businesses in facilitating the supply of goods and services. Examples include pharmaceutical companies cooperating to distribute essential medication and pharmacy products and NBN Co and telcos working together to manage demand surges, wholesale services and capacity challenges.

The ACCC commented that it is closely monitoring the activities being undertaking whilst it conducts consultations and makes final decisions on whether to grant formal authorisations

Enforcement track record

The ACCC continues to seek greater penalties – since the introduction of new consumer law remedies and powers in 2010 (and the introduction of the Australian Consumer Law (ACL) in 2011) the total ACL penalties awarded by the Federal Court in ACCC matters is over $315.2 million.

The ACCC concluded 2 ACL legal proceedings, with 28 cases still ongoing. It secured:

  • $4.2 million in penalties against former carwash and detailing franchiser Geowash for unconscionable conduct, misleading and deceptive conduct and failing to act in good faith toward its franchisees. The Federal Court also ordered $1.045 million in penalties against its director and $656,000 against its franchising manager.
  • $500,000 in penalties against Panthera Finance Pty Ltd, who admitted to contraventions, for unduly harassing three consumers over debts they did not owe and for misleading one of the three consumers.

On the competition law front, one of the 12 enforcement proceedings that was on foot concluded. Namely, the Federal Court dismissed the ACCC’s court action against Ramsay Health Care Australia Pty Ltd for alleged misuse of market power and exclusive dealing.

Interestingly, the ACCC did not commence any new competition or consumer law proceedings in the quarter.

Merger activity – how does it compare?

The mergers team was slightly less busy in comparison to the previous quarter, although still relatively consistent. A total of 66 matters were assessed or underwent public review (down from 71 in the previous quarter). Of this 66, there were 58 confidential merger matters pre-assessed (down from 61) and eight public reviews (down from 10). Seven of the mergers that were publicly reviewed were not opposed, and one was withdrawn after a Statement of Issues was published.

The key merger decision involved Bauer Media Pty Limited’s proposed acquisition of Pacific Magazines Pty Ltd – both publishers of magazines and digital content. The ACCC cleared this acquisition following a Statement of Issues, ultimately concluding that online publishers would continue to compete with Bauer Media in a future with the acquisition. This merger arose in the context of the drastically changing publishing landscape, where Bauer Media and Pacific Magazines had to shut down titles (and were likely to continue doing so).

There was also one merger authorisation lodged in the quarter, which the ACCC approved on 30 April 2020 – being Gumtree AU Pty Ltd’s proposed acquisition of Cox Australia Media Solutions Pty Ltd.

Heavy load of market studies, inquiries and reform pursuits

The ACCC persisted with its broad range of market studies and advocacy, reflecting the importance that Chairman Rod Sims’ places on this, where he has stated that this work “provides an evidence-based foundation for much of [the ACCC’s] enforcement and compliance work”.[1] Indeed, the ACCC has a robust and active presence in a number of different policy areas and sectors, and this steadily expanding scope showed no sign of abating in the quarter.

In particular, the ACCC:

  • announced its Digital Advertising Services Inquiry and Digital Platform Services Inquiry – which follow on from the ACCC’s Digital Platforms Inquiry that concluded in July 2019;
  • published its eighth interim report for the East Coast Gas Inquiry;
  • continued its work for the Murray-Darling Basin Inquiry and the Home Loan Price Inquiry; and
  • published an interim report for the Home Loan Price Inquiry focusing on pricing issues.

There are also a number of ACL reforms that the ACCC has actively been in pursuit of. This includes a submission to Treasury’s Consultation Regulation Impact Statement on Enhancements to Unfair Contract Term (UCT) Protections – where it recommended that the inclusion of a UCT in a standard form contract should be a contravention of the ACL and subject to civil pecuniary penalties and other remedies. The ACCC have previously expressed this view in a number of forums, including its Customer Loyalty Schemes Final Report and Rod Sims’ address on the ACCC 2020 Compliance and Enforcement Priorities.

Lastly, the ACCC made substantive strides with the Consumer Data Right (CDR), whilst allowing for additional flexibility in its implementation due to COVID-19. Of note, the ACCC accredited the first data recipient (Regional Australia Bank), made the CDR Rules (version 1) and published guidance on businesses seeking exemption from the CDR Rules.

[1] Rod Sims, ACCC 2020 Compliance and Enforcement Priorities, Committee for Economic Development Australia, 25 February 2020 (see here).

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About The Author

is a graduate in the Competition and Regulatory team in Melbourne.

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