On 23 February 2021, ACCC Chair Rod Sims released the ACCC’s 2021 compliance and enforcement priorities (ACCC Priorities) as part of his annual address to the Committee for Economic Development Australia (Annual Address).1
The ACCC Priorities will be an important consideration for businesses in the upcoming year, especially for those businesses that are still managing (or reeling from) the impacts of COVID-19 (COVID).
In this article, we provide an overview of the ACCC Priorities as they relate to businesses that provide goods and services to consumers.
In his Annual Address, Rod Sims noted that the ACCC was forced to reconsider and adapt many of its 2020 priorities due to the impacts of COVID.
The main actions taken by the ACCC in 2020 were:
- The granting of exemptions in response to COVID, allowing businesses to cooperate in ways that the ACCC would not normally allow. There were 28 authorisations granted in the medical supplies, groceries, energy, telecommunications and banking sectors. These measures came with strict monitoring and disclosure requirements and are currently set to conclude on 30 September 2021;
- The establishment of a COVID-19 Taskforce created to manage the significant rise in complaints received by consumers in response to COVID and its related restrictions. In particular, there was a 500% increase in reports received about the travel sector in 2020;
- The facilitation of resolutions between consumers and businesses by the ACCC. While it was noted in the Annual Address that complaints handling is not generally part of the ACCC’s role, in 2020 the ACCC was willing to facilitate resolutions between consumers and businesses in situations where significant complaints warranted the involvement of the ACCC. This intervention resulted in millions of dollars in refunds and many changes made to business practices and procedures;
- Numerous investigations and enforcement actions against various businesses for contraventions of the Competition and Consumer Act 2010 (Cth) (CCA) and the Australian Consumer Law (ACL),2 in relation to both:
- Alleged contraventions related to COVID: including enforcement investigations into Flight Centre, Qantas and Etihad for refusing to provide refunds to customers for cancelled flights, or charging cancellation fees in respect of those flights,3 and enforcement action against Lorna Jane for false or misleading claims made about its ‘Anti-virus Activewear’;4 and
- Alleged contraventions not related to COVID: including enforcement actions that are currently before the courts against large food retailers and car dealerships, Google and Facebook. The ACCC noted its success in 2020, including against Telstra for unconscionable conduct in contravention of the ACL,5 but also its losses, including unsuccessful against Kimberly Clark for representations made about its flushable wipes, which we discussed in a previous article.6
- Actions in relation to product safety to address COVID concerns as they arose. For example, the ACCC moved quickly to develop a standard for the packaging of hand sanitiser, which requires that businesses disclose on hand sanitiser packaging the alcohol content and effectiveness of the product.
Rod Sims then delivered the ACCC Priorities for 2021, noting that many of these priorities were a continuation of those planned in 2020 that were hindered by the impacts of COVID. The ACCC Priorities that are relevant for suppliers of goods and services to consumers include:
- The travel and aviation industry: the COVID-19 Taskforce will be actively scrutinising the travel industry, with the sales practices of travel businesses and the potential for misrepresentations in advertising and marketing being of particular concern, especially in light of the uncertainty that persists with regard to travel restrictions. Similarly, there will be ongoing monitoring of the aviation industry targeted at addressing any anti-competitive behaviours that attempt to prevent new operators from entering the market;
- Consumer protection: as usual, the ACCC will continue to focus on compliance and enforcement action to protect consumers. The ACCC noted that there is a number of consumer and fair trading cases currently before the courts, with the franchising, motor vehicles and technology and digital sectors being a particular area of focus;
- Product safety: the ACCC’s product safety work for 2021 will prioritise implementing new safety standards for button batteries and promoting compliance through education during the transitional period between the old safety standards and the new. As well, there will be scrutiny on the safety standards and design of quad bikes after a high number of quad bike accidents in 2020, with the ACCC pledging to work in conjunction with the government in all states and territories to conduct surveillance of compliance with new obligations imposed;
- The funeral sector: a new point of emphasis for the ACCC in 2021 will be to examine any unconscionable conduct and anti-competitive behaviour in the funeral sector. The ACCC indicated that it will explore criticisms that have been made about funeral businesses (including that the major players use their market power to bundle services and prevent other businesses from entering the market) and will take targeted action where necessary;7
- The finance sector: the ACCC will implement recommendations from its 2020 Home Loan Price Enquiry, with a particular emphasis on alerting borrowers to the rates available to them and lowering the administrative hurdles that consumers must currently overcome to switch home loan providers. There are further investigations currently in progress and additional enforcement outcomes are expected in the coming months. The ACCC will also be monitoring debt collection practices as the government’s COVID financial support schemes come to an end and debt repayments resume;
- Franchising: there will be increased scrutiny on the franchising sector to ensure that franchisors are not making misleading representations about franchises in regard to earning potential and use of marketing funds. The ACCC emphasised the importance of ensuring that all small businesses enjoy the protections afforded to them under the Australian Consumer Law;
- Agriculture: compliance will be a priority in the agricultural sector, with the ACCC looking to ensure that businesses conform with the recently commenced Dairy Code and the Horticulture Code. To this end, education, compliance and enforcement activities will be undertaken;
- Motor vehicle and caravan industries: 2020 saw a growing number of consumer guarantee complaints in the motor vehicle industry. The ACCC plans to take enforcement action against numerous motor vehicle dealers as a means of effecting industry-wide behaviour changes, which Mr Sims described as a key project. Similar concerns were found in the caravan sector, with the failure of caravan manufacturers and dealers to comply with consumer guarantees obligations coinciding with significant growth in the demand for caravans in 2020.
Beyond 2021 – Law Reform
The Annual Address set out the ACCC’s commitment to continuing to advocate for law reform targeted at the key issues affecting consumers and small businesses. In particular, the ACCC will, in 2021 and beyond, advocate for:
- Changes to address deficiencies in the law related to consumer guarantees and unfair contract terms under the ACL. This aligns with previous indications that have been made by the Federal government which suggest that unfair contract terms will be made unlawful,8 as well as upcoming changes to the definition of consumer under the ACL;9 and
- The imposition of a general prohibition against unfair trading practices in the ACL to address unfair practices engaged in by businesses that cause significant detriment to consumers but which do not neatly fit within the current consumer protections laws in the ACL. The Annual Address noted that this is currently being discussed by Australian government and agencies following a review of the ACL in 2018, and was a key recommendation made in the ACCC’s Digital Platform and Perishable Goods inquiries.10
Takeaways for businesses
- Businesses that trade in the ACCC’s focus areas for 2021 should remain vigilant and ensure that they are well-acquainted with the ACCC Priorities for the upcoming year;
- Businesses should not take investigations or enforcement action by the ACCC lightly, especially considering the higher penalties that the ACCC may now impose for a breach of the ACL.11 Businesses should manage their exposure by seeking legal advice from the outset of any investigation, in order to get on the front foot when addressing any of the ACCC’s concerns; and
- More than ever, businesses that supply goods and/or services to consumers (particularly those that are the focus of the ACCC Priorities) need to check their contracts, including standard form contracts, to ensure that they do not contain unfair contract terms. This is important for all businesses, including businesses that supply goods and/or services to other businesses (as businesses can also be considered “consumers” under the broad definition of “consumer” under the ACL).12
We have a dedicated consumer law team that can help you review your contracts and business practices to ensure that you comply with the ACL. If you would like more information about the services we provide please contact us.
This article was written by Teresa Torcasio, Partner, Zoe Vise, Law Graduate and Yi Tung, Law Graduate.
1. Australian Competition & Consumer Commission (ACCC) (Cth), ACCC 2021 Compliance and Enforcement Priorities, Annual Address to Committee for Economic Development Australia (23 February 2021) (ACCC Priorities Report).
2. Competition and Consumer Act 2010 (Cth) Sch 2 (“Australian Consumer Law” or “ACL”).
3. ACCC, ‘Flight Centre to refund cancellation fees’ (media release, 3 May 2020) <https://www.accc.gov.au/media-release/flight-centre-to-refund-cancellation-fees>; ACCC, ‘Qantas offers refunds for flight cancellations’ (media release, 19 June 2020) <https://www.accc.gov.au/media-release/qantas-offers-refunds-for-flight-cancellations>; ACCC, ‘Etihad offers refunds for all cancelled flights purchased in Australia’ (media release, 28 July 2020) <https://www.accc.gov.au/media-release/etihad-offers-refunds-for-all-cancelled-flights-purchased-in-australia>.
4. ACCC, ‘ACCC takes Lorna Jane to court over ‘Anti-virus Activewear’ claims (media release, 21 December 2020) <https://www.accc.gov.au/media-release/accc-takes-lorna-jane-to-court-over-anti-virus-activewear-claims>.
5. ACCC, ‘Telstra in court over unconscionable sales to Indigenous consumers’ (media release, 26 November 2020) <https://www.accc.gov.au/media-release/telstra-in-court-over-unconscionable-sales-to-indigenous-consumers>.
6. Teresa Torcasio et al, ‘ACCC appeal on Kleenex flushable wipes claim dismissed’, HWL Ebsworth Lawyers (19 June 2020) <https://hwlebsworth.com.au/accc-appeal-on-kleenex-flushable-wipes-claim-dismissed>.
7. ACCC Priorities Report (n1), item 2, paragraph 5.
8. Teresa Torcasio et al, ‘Unfair contract terms to become unlawful under proposed changes to the ACL’, HWL Ebsworth Lawyers (12 November 2020) <https://hwlebsworth.com.au/unfair-contract-terms-to-become-unlawful-under-proposed-changes-to-the-acl/>.
9. Teresa Torcasio and Caitlyn White, ‘A key change to the definition of “consumer” under the Australian Consumer Law will lead to more business customers being able to rely on consumer guarantees’, HWL Ebsworth Lawyers (20 November 2020) <https://hwlebsworth.com.au/a-key-change-to-the-definition-of-consumer-under-the-australian-consumer-law-will-lead-to-more-business-customers-being-able-to-rely-on-consumer-guarantees/>.
10. ACCC, Digital Platforms Inquiry, Final Report (2019); ACCC, Perishable Agricultural Goods Inquiry, Final Report (2020).
11. Teresa Torcasio and Marian Ngo, ‘Breaches of the Australian Consumer Law attract a record breaking $26.5 million penalty’, HWL Ebsworth Lawyers (9 October 2019) <https://hwlebsworth.com.au/breaches-of-the-australian-consumer-law-attract-a-record-breaking-26-5-million-penalty/>.
12. Section 3, ACL. See also Teresa Torcasio et al, ‘Consumer guarantees for goods and services acquired for business purposes – you may have more rights than you realise’, HWL Ebsworth Lawyers (30 May 2019) <https://hwlebsworth.com.au/consumer-guarantees-for-goods-and-services-acquired-for-business-purposes-you-may-have-more-rights-than-you-realise/>.