Planning ahead during uncertain times? ACCC and AER confirm strategic priorities
On 31 August 2020, the ACCC and AER released their Corporate Plan for 2020 to 2021 (the Plan). The Plan refreshes the regulators’ key strategic priorities, activities and capabilities over the next twelve months. The ACCC will publish more details on their five-year strategic plan later in the reporting year.
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 announced in March 2020 (see our previous blog post here). Interestingly, the refresh to the Plan also reflects the impact of COVID-19 on competition, consumer protection and the ACCC/AER’s general operations.
Importantly, Rod Sims confirmed that “while the pandemic has necessitated a shift in our priorities, it has not stopped our day-to-day work”.
Competition must and will survive the current crisis as it is fundamental for the recovery phase of the crisis. An open, well-functioning economy is essential to the prosperity of all Australians, and such an economy depends completely for its success on robust competition.
Emerging priority areas
The ACCC has extended a number of its 2020 compliance and enforcement activities into 2021 to allow it to deliver on these priorities, in light of its need to refocus much of this year’s priorities to matters arising from the impact of COVID-19. This refocus has resulted in less resources allocated to the 2020 priorities and included:
- authorising the collaboration of competitors to meet increased demand, or otherwise mitigate the impact of the pandemic;
- establishment of the COVID-19 taskforce to tackle the unique issues arising from the pandemic, (including, in particular, event, travel and membership cancellations caused by government and travel restrictions);
- enhancing the ACCC’s ability to address behaviour which exploits the crisis (including “price-gouging” for essential products); and
- raising awareness of COVID-19 related scams.
The AER is focusing deeply on the current pressing issues – consumer hardship and the resilience of the energy business. It has noted that a large number of Australians have found themselves with reduced incomes, and may find it difficult to pay their bills on time. The regulator will continue to safeguard these consumers: ensuring they have “access to affordable payment plans and are protected from disconnections”.
Enduring strategies and activities
However, the ACCC has also reaffirmed its focus on longstanding priority areas.
#1 – Maintaining and promoting competition
The ACCC will continue to assess and review mergers to prevent permanent structural changes that substantially lessen competition. Furthermore, in light of the economic uncertainty caused by COVID-19, the ACCC will play close attention to the potential for “opportunistic” purchases of distressed or failing firms.
Digital platforms will remain front of mind and part of the ACCC’s core work, as it investigates how to protect consumers and allow businesses to compete in a growing digital economy. Correspondingly, the expansion of the Consumer Data Right to other industries is also intended to enhance competition.
Moreover, the ACCC is seeking to promote performance-based competition in concentrated sectors through monitoring, reporting and transparency measures. This includes communications, fuel, airports, gas and electricity.
#2 – Protecting the interests and safety of consumers, and supporting fair trading in markets affecting consumers and small business
Extending the ACCC’s product safety priorities for 2020 into 20201, the safety of consumer products remains a high priority, with a focus on Takata airbags, button batteries, and the safety of products sold on online platforms. The ACCC are also committed to ensuring compliance with the Dairy and Franchising Codes of Conduct.
#3 – Promoting the economically efficient operation of, use of, and investment in infrastructure; and identifying market failure
Infrastructure priorities include:
- delivering effective network regulation across a number of sectors, including NBN pricing and performance; and
- establishing regulated access terms for interstate rail network and bulk wheat facilities.
#4 – Undertaking market studies, inquiries and monitoring to support competition, consumer and regulatory outcomes.
In 2020–21, the ACCC will complete market studies and inquiries covering a range of sectors, including home loans, Murray Darling Basin water markets, domestic air travel, supply chains for perishable agricultural goods, and the supply of home, contents and strata insurance to consumers in northern Australia.
Consistently with its first priority focus, the ACCC has also directed inquiries into digital advertising services and digital platform services.
What does this mean going forward?
ACCC Chair Rod Sims specifically noted that in undertaking all of its functions, the ACCC will seek to minimise the regulatory burden on businesses, and in particular the impact on businesses already under pressure due to COVID-19. In addition, the ACCC has adjusted its staffing and work streams to process the substantial increase in applications from businesses to authorise collaborative activity which would ordinarily be anti-competitive. Nevertheless, businesses can continue to expect strong engagement and enforcement action from Australia’s notoriously active competition regulator.
Notably, the ACCC’s budget, which is yet to be announced, will influence the manner in which the Plan is delivered.
We’ll have to wait and see if it all goes to Plan.
Image credit: Proceed with Caution by State Farm / Creative Commons / CC 2.0 / Remixed to B&W and resized