The Australian Competition and Consumer Commission has published its December 2014 quarterly report, ACCCount, which highlights some of the agency’s key activities in late 2014.
The December 2014 quarter saw strong enforcement outcomes along with action to improve consumer welfare, protect competition and put a stop to conduct which is anti-competitive or harmful to Australians. Highlights for the quarter include:
- responding to over 59 000 complaints and inquiries from businesses and consumers
- securing over $19 million in penalties for breaches of the Competition and Consumer Act 2010 (CCA)
- commencing eight new civil proceedings in the Federal Court and obtaining four court enforceable undertakings
- receiving payment of $224 400 for four infringement notices under the Australian Consumer Law (ACL)
Two significant penalties were determined by the courts. The first was against Renegade Gas Pty Ltd, Speed-E-Gas Pty Ltd, and three current and former senior officers of the two companies, who paid penalties totalling $8.3 million, for engaging in cartel conduct.
“Secret agreements between competitors drive up prices, cheat consumers, and harm the wider economy. Detecting, disrupting and destroying cartels is a prime focus of ACCC activity and this penalty should serve as a warning that the ACCC will target both business and individuals in the pursuit of cartel conduct,” ACCC Chairman Rod Sims said.
The second major penalty, $10 million and costs, was against Coles Supermarkets Australia Pty Ltd for unconscionable conduct in relation to its practices. This is one of the first findings of unconscionable conduct in a business-to-business context under the Australian Consumer Law.
‘This judgement should serve as a clear signal to larger businesses about the conduct that is unacceptable in commercial dealings with smaller suppliers,” said Mr Sims.
The ACCC also instituted proceedings in the Federal Court against the Construction Forestry Mining and Energy Union (CFMEU), alleging it engaged, or attempted to engage, in secondary boycott conduct. The case is ongoing.
The ACCC rolled out an educational campaign to inform the franchising sector about the new Franchising Code of Conduct, which commenced on 1 January 2015. The campaign included guidance materials, digital advertising to Franchising Information Network subscribers, an address and webinar delivered by Deputy Chair Dr Michael Schaper, and presentations by ACCC staff to various forums.
The ACCC also continued its Scam Disruption Project (commenced in April 2014) to stop potential scam victims from sending more money to scammers. Approximately 60 per cent of those receiving the ACCC's warning letters have stopped sending money overseas for at least a six week period. Just over 80 per cent of the people who contacted the ACCC after receiving the letter were scam victims. Collectively, these people had lost $2.4 million, at an average of about $31 000 each.
Product safety remains an ACCC priority. The quarter saw a total of 147 product recalls, including further progress on the recall of Infinity cables, with a second announcement in October of recalls being conducted by eight further suppliers. The cables become brittle prematurely, and once brittle, physical contact with the cables could dislodge the insulation and lead to electric shock or possibly fires.
Significant merger decisions in the quarter included the ACCC’s decision to not oppose the proposed clay brick joint venture between CSR Limited and Boral Limited and the decision not to oppose Elgas Limited’s acquisition of Wesfarmers Kleenheat Gas Pty Ltd’s east-coast LPG business, following the acceptance of court-enforceable undertakings.
In October 2014 Ms Paula Conboy commenced as the new Chair of the AER, following the departure of former Chair Mr Andrew Reeves. The AER also delivered draft decisions in November 2014 on the revenue proposals submitted by seven energy distribution and transmission business in NSW and ACT.
The AER also instituted proceedings against EnergyAustralia Pty Ltd for alleged contraventions of the National Energy Retail Law. The AER alleges that EnergyAustralia made false or misleading representations and engaged in misleading or deceptive conduct when dealing with certain consumers to sell electricity and gas plans. The ACCC has instituted against EnergyAustralia alleging similar breaches of the Australian Consumer Law.
“The ACCC will build upon our achievements in 2014 to protect consumers and improve competitive outcomes in 2015’, Mr Sims said.