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Providing strategic advice on expansion structures November 16, 2018

Founded in Bondi Beach in 2012, Bailey Nelson has rapidly grown into a global eyewear retailer and service provider with boutiques in Australia, London, Canada and New Zealand. The strong demand for their products and … Continued

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Winner of William Ah Ket Scholarship 2019 announced October 9, 2019

Wednesday 9 October 2019 A Victorian lawyer has been named this year’s winner of the William Ah Ket Scholarship. Tienyi Long, a legal and governance officer at Glen Eira City Council in Melbourne, was awarded … Continued

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Final changes to the ASX Listing Rules announced October 15, 2019

On 10 October 2019 the Australian Securities Exchange (ASX) released its response to feedback received on its consultation paper ‘Simplifying, clarifying and enhancing the integrity and efficiency of the ASX listing rules’, together with the … Continued

Update: ACCC’s 2015 Compliance and Enforcement Policy

Some companies think they have a lot to gain from breaching our competition and consumer law; they should have much to lose as well” Rod Sims, Chairman of the Australian Competition and Consumer Commission.

Focus on Enforcement and Penalties

Last month, the Australian Competition and Consumer Commission (ACCC) released the 2015 edition of its Compliance and Enforcement Policy and the news is not good for businesses that breach the provisions of the Competition and Consumer Act 2010 (CCA), including the provisions of the Australian Consumer Law.

In 2015, the ACCC will be pushing for greater penalties to be awarded against businesses that breach the provisions of the CCA. The objective is to ensure that such penalties deter any future breaches. This renewed focus comes in the wake of criticism that the penalties imposed on big corporations for contraventions of the CCA have been insufficient. For example:

  • A penalty of $11 million awarded against Flight Centre for price fixing was described in the media as “immaterial” to the company and unlikely to affect the way the business operated.[1]
  • In proceedings against Coles supermarkets, maximum penalties of $1.1 million for each contravention of the CCA were described by Justice Gordon as “inadequate” for a corporation such as Coles with an annual revenue in excess of $22 billion. For further discussion regarding this case, please refer to our December On Point available here.

The ACCC’s renewed focus on the deterrent effect of penalties should not be taken lightly. The ACCC has a history of appealing decisions where it believes the penalties awarded are inadequate.[2]

New Priorities

In addition to the renewed focus on deterrence, the ACCC’s Compliance and Enforcement Policy identified a number of new priority areas for the ACCC.

Cartel Conduct in Government Procurement

Cartel conduct is an ongoing area of priority for the ACCC. However, in 2015, the ACCC will focus on cartel conduct in government procurement processes. Government procurement has been identified as an area of priority as it is an attractive target for cartel conduct due to the size of the projects and the large budgets of government agencies.

Medical and Health Sector

The ACCC has identified the medical and health sector as an area of priority in 2015. The ACCC has specified a number of competition and consumer issues in this sector which will become a focus including:

  • attempts to limit access to products, patients, procedures or facilities
  • unconscionable or misleading and deceptive conduct by medical professionals.
Industry Codes

The ACCC will also be taking a stronger line against companies that fail to adhere to Industry Codes. In particular, the ACCC identified the new Franchising Code of Conduct as an area that will be subject to increased enforcement. The Franchising Code of Conduct, which became operational on 1 January 2015, provides the ACCC with new powers and remedies which will be used to protect against breaches of the Code.

The ACCC has also indicated that the mandatory good faith obligation introduced under the Code will be the subject of enforcement proceedings in 2015.

Conclusion

It is important for you to be aware of your obligations under the CCA and to ensure that you conduct your business in accordance with your obligations under the CCA, particularly if your business operates within one of the ACCC’s new priority areas.

If you would like to know more or would like us to assist your business with these issues, please contact our Dispute Resolution & Litigation team.

 

Authors
  Gina Wilson | Partner
   Katherine Styles | Senior Associate
   Brendan Duke | Lawyer

[1] see for example: http://www.smh.com.au/business/aviation/flight-centre-appeals-price-fixing-ruling-20140417-36u9y.html

[2] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54

Some companies think they have a lot to gain from breaching our competition and consumer law; they should have much to lose as well” Rod Sims, Chairman of the Australian Competition and Consumer Commission.

Focus on Enforcement and Penalties

Last month, the Australian Competition and Consumer Commission (ACCC) released the 2015 edition of its Compliance and Enforcement Policy and the news is not good for businesses that breach the provisions of the Competition and Consumer Act 2010 (CCA), including the provisions of the Australian Consumer Law.

In 2015, the ACCC will be pushing for greater penalties to be awarded against businesses that breach the provisions of the CCA. The objective is to ensure that such penalties deter any future breaches. This renewed focus comes in the wake of criticism that the penalties imposed on big corporations for contraventions of the CCA have been insufficient. For example:

  • A penalty of $11 million awarded against Flight Centre for price fixing was described in the media as “immaterial” to the company and unlikely to affect the way the business operated.[1]
  • In proceedings against Coles supermarkets, maximum penalties of $1.1 million for each contravention of the CCA were described by Justice Gordon as “inadequate” for a corporation such as Coles with an annual revenue in excess of $22 billion. For further discussion regarding this case, please refer to our December On Point available here.

The ACCC’s renewed focus on the deterrent effect of penalties should not be taken lightly. The ACCC has a history of appealing decisions where it believes the penalties awarded are inadequate.[2]

New Priorities

In addition to the renewed focus on deterrence, the ACCC’s Compliance and Enforcement Policy identified a number of new priority areas for the ACCC.

Cartel Conduct in Government Procurement

Cartel conduct is an ongoing area of priority for the ACCC. However, in 2015, the ACCC will focus on cartel conduct in government procurement processes. Government procurement has been identified as an area of priority as it is an attractive target for cartel conduct due to the size of the projects and the large budgets of government agencies.

Medical and Health Sector

The ACCC has identified the medical and health sector as an area of priority in 2015. The ACCC has specified a number of competition and consumer issues in this sector which will become a focus including:

  • attempts to limit access to products, patients, procedures or facilities
  • unconscionable or misleading and deceptive conduct by medical professionals.
Industry Codes

The ACCC will also be taking a stronger line against companies that fail to adhere to Industry Codes. In particular, the ACCC identified the new Franchising Code of Conduct as an area that will be subject to increased enforcement. The Franchising Code of Conduct, which became operational on 1 January 2015, provides the ACCC with new powers and remedies which will be used to protect against breaches of the Code.

The ACCC has also indicated that the mandatory good faith obligation introduced under the Code will be the subject of enforcement proceedings in 2015.

Conclusion

It is important for you to be aware of your obligations under the CCA and to ensure that you conduct your business in accordance with your obligations under the CCA, particularly if your business operates within one of the ACCC’s new priority areas.

If you would like to know more or would like us to assist your business with these issues, please contact our Dispute Resolution & Litigation team.

 

Authors
  Gina Wilson | Partner
   Katherine Styles | Senior Associate
   Brendan Duke | Lawyer

[1] see for example: http://www.smh.com.au/business/aviation/flight-centre-appeals-price-fixing-ruling-20140417-36u9y.html

[2] Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54