On 3 March 2022, Rod Sims announced the ACCC’s annual compliance and enforcement priorities for 2022/23 (ACCC Priorities) in his annual address to the Committee for Economic Development Australia (Annual Address). The Annual Address is one of Rod Sims’ final addresses as Chair of the ACCC before Gina Cass-Gottlieb commences on 21 March 2022.
In this article, we provide an overview of the ACCC Priorities as they relate to businesses that provide goods and services to consumers.
Consumer and fair trading priorities
The ACCC Priorities for 2022/23 include the following issues related to consumer and fair trading:
- ‘Greenwashing’: noting that consumers are increasingly interested in the environmental impacts of the products and services they acquire, the ACCC will be scrutinising businesses for any false promotion of environmental or ‘green’ credentials that capitalise on consumer preference. The ACCC noted that this behaviour (called ‘greenwashing’) is a concern for both those consumers who are unable to determine the accuracy of credentials, and those businesses which incur costs in genuine environmentally-friendly manufacturing processes that face unfair competition from those making misleading ‘green’ claims without incurring the same cost;
- False scarcity tactics: the ACCC will be focused on unearthing manipulative buying tactics used by businesses which exploit or pressure consumers into buying – such as ‘low-stock’ warnings, false sale countdown timers, targeted advertising which utilises consumers’ own data to exploit individual characteristics, pre-selected add-ons and design interfaces that discourage unsubscribing;
- Social media influencers: under the banner of manipulative buying tactics, the ACCC will be prioritising enforcement and compliance activity related to practices in the market that seek to distort or disregard consumer choice in the digital economy, such as fake reviews and social media influencers who do not disclose that they are paid to promote the products they pitch to consumers;
- Prohibition on ‘unfair practices’: in line with previous ACCC literature, the ACCC has affirmed its commitment to advocate for law reform related to the introduction of a prohibition on unfair trading practices. The ACCC believes this type of market-wide prohibition is necessary to ensure that consumers are not harmed by practices which would not necessarily fall within the current prohibitions listed under the Australian Consumer Law (ACL);
- COVID-19 disruptions: with the effects of COVID-19 entering their third year, the ACCC continues to investigate complaints of unperformed contracts and withheld refunds and credits through the COVID-19 Taskforce. A new item of investigation for the ACCC will be disruption in the supply of rapid antigen tests and related pricing concerns; and
- Motor vehicles and caravans: non-compliance with consumer guarantees continues to be the issue most reported to the ACCC by consumers, particularly in relation to motor vehicles and caravans. The Annual Address noted that dealers often cite difficulties in being indemnified by manufacturers as the reason for their reluctance to provide consumer guarantee remedies. The ACCC made it clear that it will continue to advocate for law reform in this key area of consumer protection to make non-compliance with consumer guarantee obligations illegal, and also to make it illegal for a manufacturer to not indemnify a supplier that does give a consumer a remedy under the ACL.
The ACCC Priorities for 2022/23 include the following issues related to competition:
- Supply chains disrupted by COVID-19: of importance to the ACCC from a competition perspective this year is maintaining effective and competitive supply chains. The ACCC cited the effects of COVID-related staff shortages, port congestion and transport interruptions on the supply of many retail goods from fresh food to clothing and medications. These disruptions have resulted in higher freight rates which have been passed through to consumers in the form of higher prices. The ACCC announced that it has joined with competition authorities in the US, the UK, Canada and New Zealand to form a ‘five eyes’ working group, which will share intelligence and collaborate to detect attempts by businesses to use pandemic conditions as a veil for illegal conduct in global supply chains; and
- Exclusive arrangements between market leaders: the ACCC will be focusing on exclusive arrangements between businesses with market power that impact competition. While the ACCC noted that exclusive arrangements are common in the commercial world and are in many cases benign, it also noted that there are some examples in Australia of large and powerful businesses engaging in exclusionary behaviour that materially impacts competition. The ACCC is particularly concerned with market-dominant businesses restricting access to ‘bottleneck’ goods or services and impacting the ability of new entrants to compete, and so-called ‘most favoured nation clauses’ that prevent competitors from offering a better deal to consumers.
Product safety priorities
The ACCC Priorities for 2022/23 include the following issues related to product safety:
- Button batteries: new button battery standards will commence in June 2022 which will apply to around 30 million products supplied each year. The ACCC has stated that these ‘world-first’ standards will improve safety in the design of products containing button batteries, the packaging of button batteries and the warning requirements alerting customers to the risk associated with button batteries;
- General safety provision: the ACCC will continue to advocate for the introduction of a general safety provision in the ACL that prohibits the supply of unsafe products to consumers. The ACCC noted that while most consumers would expect such a law to exist, there is in fact no current prohibition to fall back on. The ACCC noted that Australia is lagging behind many other countries on this point, including most OECD members which already have such a law in place; and
- Communication with businesses: the ACCC will make it a priority to communicate with businesses as part of its product safety work, after market research showed that 50% of businesses do not see consumer safety as their responsibility, and more than half do not know that they need to submit a recall notice to the ACCC when they identify a hazardous product.
Takeaways for Businesses
If 2021 is any indicator, the ACCC will be swift to take action in respect of the ACCC Priorities (see, for example, our previous article). Businesses should continue to ensure that they can back up the claims they make when marketing or selling goods or services and avoid engaging in behaviour that could be considered anti-competitive, unsafe or unfair. In particular, businesses should not take ACCC investigations or enforcement action lightly, and should manage potential 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.
How can we help?
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, Solicitor and Alexandra Youn, Law Graduate.