Is your green claim true blue?

Published On 04/03/2022 | By Margaret Cai | Consumer protection, Enforcement, Litigation, Mergers, Reform

Outgoing Chair Rod Sims today announced the ACCC’s Compliance and Enforcement priorities for FY 2022-23 and, just like last year, it’s not all about digital platforms.

Closing comments from incoming Chair Gina Cass-Gottlieb served not only to thank Mr Sims for his 11 years as the nation’s competition and consumer law regulator but also to underline that the priorities truly are agency priorities, as she prepares to step into the role two weeks from now.

A full copy of Mr Sims’ speech can be found on the ACCC website.

This alert provides up-to-date guidance on the ACCC’s likely enforcement activities for the coming year, to help you consider how best to direct your legal, regulatory and compliance resources.

ACCC 2022 Compliance and Enforcement Priorities

  • Consumer and fair trading issues in relation to environmental claims and sustainability.
  • Consumer and fair trading issues relating to manipulative or deceptive advertising and marketing practices in the digital economy.
  • Consumer and fair trading issues arising from the COVID-19 pandemic.
  • Competition and consumer issues arising from the pricing and selling of essential services, with a focus on energy and telecommunications.
  • Empowering consumers and improving industry compliance with consumer guarantees, with a focus on high value goods including motor vehicles and caravans.
  • Competition and consumer issues relating to digital platforms.
  • Competition issues in global and domestic supply chains, particularly where they are disrupted by the COVID-19 pandemic.
  • Promoting competition and investigating allegations of anti-competitive conduct in the financial services sector, with a focus on payment services.
  • Exclusive arrangements by firms with market power that impact competition.
  • Ensuring that small businesses receive the protections of the competition and consumer laws and industry codes of conduct, including in agriculture and franchising.
  • Compliance with the button battery safety standards.
  • Consumer product safety issues for young children, with a focus on compliance, enforcement, and education initiatives.

Greenwashing

The ACCC will focus on carbon neutrality and other sustainability claims, noting in particular that “greenwashing” affects both consumers (who are unable to verify claims of environment sustainability) and businesses (where responsible companies incur the costs of achieving environmental sustainability while facing competition from competitors making unfair claims).

Last chance!

While Mr Sims was not hesitant in recognising the social and economic benefits that data can bring, he warned against the “dark patterns” that could arise from data use. This echoes the concern raised by the ACCC in the Digital Platform Services Inquiry’s Discussion Paper for Interim Report No.5. False scarcity reminders, false sales, social media influencers not disclosing their quid pro quo and manipulation of online reviews are some of the examples Mr Sims gave when talking about the fundamental need for well-functioning online markets where people are not misled. This concern was also reflected in ASIC’s enforcement priorities, released by ASIC Chair Joe Longo today, who noted that the regulator would be targeting misleading and deceptive conduct relating to investment products, including advertising through digital means that obscures the risk.

While the ACCC has the Trivago and Google location cases in the win column in this category, they also strongly believe extra tools are needed – including an unfair practices provision, to ensure Australian consumers are adequately protected against changeable unfair business tactics.

Got Milk?

Reiterating that small businesses are also a key priority of the ACCC, Mr Sims confirmed an upcoming focus on ensuring businesses in the franchising and agriculture sectors receive the full protection of competition and consumer laws, with a focus on compliance with the codes of conduct in the dairy and horticulture industries.

Look me in the (5) Eyes

Calling out the strains on global and domestic supply chains, Mr Sims emphasised the coordination of enforcement activities through the Five Eyes Intelligence Oversight And Review Council to ensure competitive and effective supply chains. Issues, not unique to Australia, will be tackled by FEIORC and Mr Sims has squarely warned that the ACCC will not hesitate to take action, including by drawing on the experience and knowledge gained by the ACCC during the COVID pandemic.

Cash? We don’t accept that here.

The ACCC is continuing to collaborate closely with the Council of Financial Regulators, with a particular focus on competition in payment services. With the rapidly diminishing use of cash for payments, issues like least-cost routing, and competition concerns with access to technologies related to digital wallets, are going to be front of mind for all financial regulators including the ACCC.

Whack-a-mole

Likening regulation of digital platforms through court action to a game of whack-a-mole, Mr Sims repeated his call for ex ante regulation (discussed recently in the Digital Platform Services Inquiry’s Discussion Paper for Interim Report No.5) as necessary to achieve widespread change in this area. The current approach of investigating and litigating, Mr Sims said, is time consuming (with investigations taking up to 5 years), resource intensive, and is confined to the particular facts being prosecuted rather than changing the environment more broadly said Mr Sims.
As for what’s happening overseas? It is clear that Mr Sims sees Australia as being behind the game, noting that regulators in the UK, EU and the US are already developing tools and proposals to deal with the largest digital platforms: “we either climb on the bus, or the bus leaves the station without us”, he said.

In response to questions from the floor, Mr Sims was keen to point out that the litigation taken by the ACCC against digital platforms was not Australia-specific situations and could have been pursued by a regulator anywhere in the world, although noted that the ability to recover civil penalties for consumer law breaches was somewhat unique to Australia. Mr Sims also noted that the ACCC is constantly talking to its counterparts, and expects digital platforms to increasingly face regulatory and/or litigious pressure across multiple fronts.

Can you hear me?

The ACCC will be looking “extremely closely” at the recent agreement between TPG and Telstra regarding their regional resources to ensure that residents and businesses in rural and regional areas are not disadvantaged. The ACCC has committed to making its review of this agreement (which raises a number of complex issues) a “key item” on its agenda.

Watch this (air) space

As the airline industry slowly lifts itself off the ground, the ACCC will have its regular focus on airports – but will also be looking at airlines too. In an industry severely impacted by the COVID pandemic, Mr Sims expressed concerns that the ongoing viability of airlines like Rex and Bonza is not threatened by anticompetitive tactics, which he noted could include prevention of getting access to slots, or adaptation of flight patterns by incumbent airlines.

Mergers – The Year Ahead

Mr Sims reiterated the ACCC’s concerns that the current merger regime is not up to scratch. The Virtus and Adora Fertility merger was used as a cautionary tale in Mr Sim’s speech today, about the practical challenges that the ACCC faces with the current, informal merger clearance system. In that merger, the parties proceeded with the transaction soon after notifying the ACCC and prior to the ACCC completing its review. While the ACCC successfully obtained an injunction, it came at the expense of significant resources – something that “laws overseas would not allow to happen”.

The debate around merger reform also comes at a time when the ACCC is observing a huge surge in merger activity, with more being complex, international mergers.

The complete ACCC Compliance and Enforcement Priorities for 2022/23 can be found here.

This being one of Mr Sims’ final public appearances, we record our best wishes for him in his new endeavours and look forward to his continuing contributions to competition and consumer law policy.

Written by Margaret Cai, Jocasta Giles and Peta Stevenson

Five Eucalyptus Trees. Aged Nine. 2010. by amandabhslater / Flickr / CC BY-SA 2.0 / Remixed to B&W and resized

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About The Author

is a solicitor in the Competition team in Sydney.

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