ACCC 2023-24 Compliance and Enforcement Priorities:  The New, the Continuing and the Enduring

Key takeaways

Key takeaways from the Australian Competition and Consumer Commission (ACCC)’s 2023-24 enforcement priorities are as follows:

• On 7 March 2023, ACCC Chair Gina Cass-Gottlieb announced the ACCC’s enforcement priorities for 2023-24¹.
• With the new penalty regime for the expanded unfair contract terms provisions coming into effect in November 2023, unsurprisingly the ACCC will be focusing its efforts on compliance in this area. Other new priorities for 2023-24 include wholesale gas market price cap compliance and scam prevention.
• Cost of living pressures, the price of essential services, the integrity of environmental and sustainability claims, supply chain issues, and manipulative practices in the digital economy continue to feature heavily in the 2023-24 priorities, as do enduring priorities such as cartels, anti-competitive conduct, vulnerable consumers and product safety.
• The ACCC has established a new internal taskforce focusing on sustainability and its intersection with competition and consumer law. The ACCC intends to not only continue its enforcement of consumer protection issues relating to environmental and sustainability claims by businesses (ie greenwashing), but also to expand the scope of its enforcement activities in this area to cover competition law and product safety issues.
• In relation to potential new law reforms to watch in the coming year and beyond, Ms Cass-Gottlieb:
  • reaffirmed the ACCC’s support for an economy-wide ban on ‘unfair trading practices’ designed to prohibit certain forms of conduct that might otherwise fall outside of the existing prohibitions under the Australian Consumer Law (ACL); and
  • flagged ACCC support for reform that would make it a contravention of the ACL, presumably including the imposition of penalties, for businesses to fail to comply with their obligations under the statutory consumer guarantees regime.

Snapshot of ACCC enforcement priorities for 2023-24

What’s new?

New ACCC priorities for 2023-24 include the following:

• Unfair contract terms in consumer and small business contracts: Having successfully campaigned for the introduction of significant penalties and other amendments to the unfair contract terms provisions of the ACL with effect from November 2023 (see our series of articles on these changes here), the ACCC will switch its focus to enforcing this area of law. The ACCC will undertake a new review of business terms and conditions across numerous sectors to identify potentially unfair terms that will be used as the basis for future enforcement activities. Businesses are therefore on notice to review and update their standard terms and conditions to ensure compliance in advance of the new penalty regime coming into effect from November.
• Competition issues in gas markets, including wholesale price cap compliance: In response to soaring energy prices and disruption to global gas markets, the Federal Government introduced an emergency price cap on the wholesale supply of gas in December 2022. The ACCC has been tasked with enforcing the cap, as well as assessing and granting exemptions under the price cap. The ACCC is also working with the Federal Government to develop a mandatory code of conduct for gas producers.
• Scam prevention and supporting the implementation of the National Anti-Scam Centre: The ACCC is already a key regulator involved in investigating, monitoring and preventing scams, including through the ACCC’s ‘Scamwatch’ service. The ACCC has also undertaken to lend support to the establishment of the Government’s National Anti-Scams Centre.

Continuing priorities from 2022-23

Many of the ACCC’s existing enforcement priorities for 2022-23 (see our previous update here) have been carried over to 2023-24, including the following:

• Environmental claims and sustainability: Both the ACCC and the Australian Securities and Investments Commission (ASIC) have already been focusing on false or misleading claims by companies regarding the environmental and sustainability credentials of their businesses or the goods or services they supply (ie “greenwashing”). For example:
  • On 2 March 2023, the ACCC announced the results of an internet sweep of 247 businesses across 8 industries which identified that 57% of the businesses reviewed had made concerning claims about their environmental credentials (see our recent “greenwashing” update here); and
  • Last month, ASIC launched its first court action for alleged “greenwashing” conduct against Mercer Superannuation (Australia) Limited, relating to statements allegedly made about the sustainable nature and characteristics of some of its superannuation investment options.

The ACCC also announced that it has established a new internal taskforce on sustainability to examine and seek to influence a range of issues where environmental and sustainability issues intersect with competition and consumer laws. The ACCC intends to not only continue its enforcement of consumer protection issues relating to environmental and sustainability claims by businesses (ie greenwashing), but also to expand the scope of its enforcement activities in this area to cover competition law and product safety issues. For example, the ACCC noted that coordination by industry participants in support of new technology may require ACCC authorisation. Accordingly, in addition to businesses ensuring that they can substantiate any sustainability claims they make, they also need to continue to take care when engaging on these issues with other industry participants who may be their competitors (as part of industry associations or other forums), to avoid potential cartel conduct risk.

• Compliance with consumer guarantees (focus on motor vehicles and caravans): Ms Cass-Gottlieb flagged the ACCC’s support for law reforms that would make it a contravention of the ACL, presumably including the imposition of penalties, for businesses that fail to comply with their consumer guarantee obligations under the ACL. It is not entirely clear what form any such amendments may take, or why such amendments are required, given the ACCC’s active enforcement of the existing prohibition of false or misleading representations concerning the existence, exclusion or effect of the consumer guarantees provisions of the ACL (which can already attract a penalty of up to $50 million per contravention). This is a key issue to watch, as consumer guarantees compliance is important not only for end suppliers of goods, but also businesses in other stages of the supply chain, including manufacturers and importers.
• Manipulative or deceptive marketing practices in the digital economy: The ACCC will continue to focus on businesses that make it difficult for consumers to unsubscribe or cancel a paid service, use consumer data to exploit individual characteristics in making sales, or manipulate online reviews and search results, as well as comparison websites and social medial influencers that don’t disclose commercial relationships or paid promotions (see our previous social media and influencer article here).
• Pricing and selling of essential services (focus on energy and telecommunications): With rising costs of living impacting almost all businesses and consumers, the ACCC has again indicated that competition and consumer protection issues relating to essential services are key focuses for the upcoming year. This follows the ACCC’s recent enforcement activity in the area, including Telstra, Optus and TPG being ordered to pay a total of $33.5 million after admitting to making false or misleading representations to customers about the maximum speeds of their NBN internet plans.
• Global and domestic supply chains (focus on transport and logistics): While the initial disruptions to supply chains associated with COVID-19 and related government restrictions may have subsided to varying degrees, supply chains have continued to be affected by the war in the Ukraine, as well as other factors including increased costs of living, rising inflation and natural disasters such as floods and fires. Businesses should continue to take care in managing any supply chain disruptions, including to avoid false or misleading representations regarding the reasons for delays or supply chain disruptions, as well as assessing cartel conduct risk associated with coordinated industry efforts to alleviate supply chain disruptions. If businesses do consider it necessary to coordinate activities with competitors, there may be the potential option to seek ACCC authorisation for such activities. For example, last month the ACCC granted urgent interim authorisation permitting the cooperation and sharing of information by companies in certain retail goods supply chains to ensure the continuity of supply to businesses and consumers in WA and the Northern Territory, due to natural events in South Australia that interrupted rail and road networks.
• Competition and consumer issues relating to digital platforms: Last year, the ACCC released the fifth interim report for the Digital Platform Services Enquiry. The ACCC’s report highlighted competition and consumer law issues associated with digital platforms, including:
  • online interface design choices that exploit behavioural biases and distort consumer choice, subscription traps, and practices intended to induce consumers to agree to unfair or unfavourable contract terms;
  • an increase in scam activities, including from fraudulent apps and fake reviews;
  • the potential ability of large digital platforms to engage in anti-competitive conduct, including tying or bundling of products by way of pre-installation agreements and conduct that impedes customers from switching platforms or providers; and
  • recommended new service-specific mandatory codes of conduct for certain digital platforms.

The Treasury has concluded its consultation on the recommendations from the report and we await policy decisions by the Government in this area. Ms Cass-Gottlieb also reinforced the ACCC’s support for an economy-wide ban on ‘unfair trading practices’ to address certain business practices that might not otherwise be covered by other prohibitions under the ACL.

• Anti-competitive conduct in the financial services sector (focus on payment services): The ACCC has made it clear both in its priorities and recent enforcement action that competition in financial services and payment systems remains a key area of focus. For example, in May 2022 the ACCC commenced proceedings against Mastercard Australia for alleged misuse of market power and/or anti-competitive exclusive dealing in relation to the supply of debit card acceptance services.
• Exclusive arrangements by firms with market power that impact competition: The ACCC remains concerned about potential competitive harm that can be caused by exclusivity arrangements used by businesses in a position of market power. This follows the ACCC’s successful action against Peters Ice Cream, which was last year ordered to pay $12 million for anti-competitive exclusive dealing arrangements relating to its distribution of ice creams in petrol stations and convenience stores (see our previous exclusive dealing article here).
• Small businesses protections (focus on agriculture and franchising): The ACCC will continue to actively monitor and investigate compliance with mandatory industry codes of conduct including in the franchising, dairy and horticulture sectors. In September 2022, Lactalis Australia Pty Ltd was found to have breached the Dairy Code of Conduct by failing to meet some of its obligations in relation to the 2020-21 milk season.
• Consumer product safety issues for young children: The ACCC has indicated that it will continue to tackle product safety issues affecting children, noting that 43 recalls unsafe children’s products have been undertaken in the year date, and the introduction in Australia of the world’s first mandatory safety standards for button batteries last year. The ACCC has also indicated that more announcements regarding the ACCC’s full suite of product safety priorities for 2023-24 will made at the National Consumer Congress.

Enduring ACCC priorities

In addition to announcing the 2023-24 Priorities, Ms Cass-Gottlieb also confirmed that the ACCC will continue to maintain a number of enduring priorities, including:

• Cartel conduct (noting a number of high profile civil and criminal cartel proceedings were finalised in the previous year, with others currently making their way through the Courts);
• Conduct impacting First Nations consumers;
• Product safety;
• Anti-competitive conduct (including the misuse market power); and
• Consumers experiencing vulnerability or disadvantage.

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This article was written by David Fleming, Partner, and Alexander Shepherd, Associate.

¹See speech to CEDA on 7 March 2023: https://www.accc.gov.au/speech/ceda-speech ; ACCC media release 7 March 2023: Competition and consumer issues in essential services, sustainability among 2023-24 compliance and enforcement priorities | ACCC ; ACCC enforcement priorities: Compliance and enforcement policy and priorities | ACCC