ACCC’s 2022 enforcement priorities – what you need to know
Steady as she goes – A new Chair, some new priorities, but otherwise a steady approach for 2022/23
Earlier today, Mr Rod Sims, Chair of the Australian Competition & Consumer Commission (ACCC), gave his final delivery of the ACCC's enforcement priorities at the annual CEDA ACCC Enforcement and Compliance Policy Update luncheon, before he steps down as Chair on 21 March 2022.
Mr Sims signalled only a small number of new priorities for the ACCC and it otherwise appears that the ACCC will adopt a 'business as usual' approach consistent with the approach adopted in recent years. In doing so, Mr Sims noted that the ACCC’s enforcement priorities for the 2022/23 financial year (as opposed to the 2022 calendar year which had been the ACCC’s traditional approach) would include two new competition-related priorities.
Otherwise, the ACCC’s priorities for the next 16 months do not represent a radical departure from the previous few years, with most of the ‘usual suspects’ getting a mention. This is unsurprising, given that the new Chair, Ms Gina Cass-Gottlieb, replaces Mr Sims in a few weeks and will no doubt need time to establish herself in the role and determine her focus for her first year in the job.
New competition priorities
Mr Sims noted competition issues in global and domestic supply chains, particularly where they are disrupted by the COVID-19 pandemic, will be the ACCC’s first new competition priority for 2022/23. He observed that the effects of COVID-related staff shortages, port congestion and transport interruptions have disrupted the supply of many retail goods (including fresh food, groceries, clothing and medications) and that these disruptions have led to higher freight rates and higher prices for consumers. The ACCC (in conjunction with its ‘five eyes working group’ comprising fellow competition authorities in the US, the UK, Canada and New Zealand) will take action where it sees businesses taking advantage of the situation to fix prices or share markets.
In addition, Mr Sims said the ACCC will focus on exclusive arrangements by firms with market power which impacts competition. The ACCC is particularly concerned about firms with market power restricting access to bottleneck goods or services, impacting the ability of competitors or new entrants to compete and that so-called ‘most favoured nation clauses’ preventing competitors from offering a better deal to consumers can also raise concerns. Mr Sims said the ACCC already has ‘several’ investigations underway to address this concern and that its current court action against Peters Ice Cream is one such case. It looks like we might finally see the wave of prosecutions for misuse of market power the ACCC foreshadowed several years ago.
2022 enforcement priorities
Environmental and sustainability claims
Mr Sims observed the growing concerns from consumers regarding the way businesses falsely promote environmental or ‘green’ credentials to capitalise on these kinds of consumer preferences. He also stated businesses incurring the costs of genuine environmentally friendly manufacturing processes face unfair competition from businesses making misleading ‘green’ claims without incurring the same costs. In doing so, the ACCC will not solely focus on consumer goods but will be reviewing claims made in the manufacturing and energy sectors. In particular, he noted the ACCC’s concern regarding businesses seeking to gain an advantage by making misleading claims about the carbon neutrality of their production processes.
Advertising and marketing in the digital economy
The ACCC will also focus on manipulative or ‘dark pattern’ techniques used by businesses to exploit or pressure consumers. Mr Sims referred in particular to:
- false scarcity reminders, such as low-stock warnings
- false countdown timers for online sales
- targeted advertising utilising consumers’ own data to exploit their individual characteristics
- pre-selected add-ons
- design interfaces that discourage ‘unsubscribing’.
See our article on ‘Dark Patterns’ for further analysis.
Off the back of its success in the Trivago appeal proceedings in late 2020, the ACCC will also continue to monitor digital manipulation of online reviews as well as social media influencers who do not disclose they are paid to promote the products they are pitching.
Last year, Mr Sims observed the increasing uncertainty inherent in Australia’s ‘forward looking’ merger test has become a reason for courts to approve mergers opposed by the ACCC. Mr Sims was concerned at the time the test was open to manipulation and the focus on the ‘counterfactual’ in many cases and risked overlooking the likely anti-competitive effects of the merger itself. The ACCC intends to continue discussing these issues in the coming year, however, Mr Sims conceded it will be a matter for the Government to determine what the next steps are and whether further legislative changes are required. Given the ACCC’s intention to conduct ongoing post-merger market reviews and analysis, businesses should not expect this topic to go away anytime soon.
What else for the year?
In addition to the ‘big-ticket’ priorities set out above, Mr Sims announced the ACCC would continue to focus on:
- promoting competition and investigating allegations of anti-competitive conduct in the financial services sector, with a focus on payment services
- seeking improvements to the information available to customers regarding telecommunications in rural and remote areas, particularly in terms of coverage comparisons and the quality of services offered by different providers
- continuing its work to develop a future NBN regulatory framework and to deliver key outcomes, such as ensuring NBN Co has the opportunity to earn the minimum revenues needed to meet its legitimate financing objectives
- examining the prices, costs and profits of airports in Brisbane, Sydney, Melbourne and Perth, as well as monitoring domestic airline activity to identify any behaviour within the industry which may be damaging competition
- continuing to take enforcement action in the franchising sector to ensure franchisees and prospective franchisees make informed decisions about the risks unique to this business.
Policy and advocacy
As well as continuing advocacy for merger reform, the ACCC will continue to seek reforms directed to:
- the consumer guarantee regime and the unfair contract term provisions
- the introduction of a general safety provision which prohibits the supplying of unsafe products to consumers.
As we commented at the start of this update, there are some new areas of focus, but it is very much ‘a steady as she goes’ approach for the ACCC this year. Not surprising, given there will be a new captain at the helm.
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