The Australian Competition and Consumer Commission is now in a better position to assist small business after changes to the Trade Practices Act received Royal Assent.
"The new legislation fills in gaps in the protection already given to small business with unconscionable conduct provisions passed in 1998," Mr John Martin, ACCC Commissioner responsible for small business, said today.
"The amendments to the Act not only enhance the ACCC's ability to respond to cases of unreasonable exploitation, they also recognise the benefits of more flexible access to the courts and state tribunals."
In summary the amendments cover a range of elements:
- court discretion to allow the ACCC to intervene in private proceedings where the issues are of public interest;
- maximum monetary penalties for a breach of the consumer protection sections of the Act (Part V) have been increased to $1 million for corporations and $200,000 for individuals;
- giving the ACCC the right to seek declarations from the court on the operations of the Act. Previously the ACCC was only able to intervene in existing matters. Declarations are relatively quick and inexpensive, providing authoritative statements on the operations of the Act;
- removal of doubts about how the unconscionable conduct provisions (s. 51AC) apply to State/Territory jurisdictions
- extending to 6 years the period in which a claim under the Act can be commenced
- extending the ACCC's right to take representative action under Part IV of the Act relating to restrictive trade practices (except the secondary boycott provisions Section 45 D&E). Previously this was restricted to part IVA (unconscionable conduct) and Part V (consumer protection)
- courts to have discretionary power to ensure compensation for victims of a TPA breach receives priority over recovery of a fine or penalty
- for mergers and acquisitions, the definition of a market to now include a substantial market in regional Australia
- the court to be able to award an extended range of non-financial remedies including orders in respect of probation , community service, corrective advertising and adverse publicity
- In giving the ACCC the right to undertake representative actions, it will be able to seek damages on behalf of third parties for most contraventions of the Restrictive Trade provisions of the Act.
This will allow the ACCC to assist small business protect its rights in relation to anti-competitive conduct such as price fixing by cartels of large businesses.
Small business will also benefit from the 'drawing down' of 51 AC or the unconscionable conduct provisions in the Act. This amendment will remove any doubt that States as well as the Commonwealth can use legislation in relation to unconscionable conduct.
For example, the New South Wales Government can now proclaim the unconscionable conduct provisions in its Retail Leases Amendments Act. This will give small business retailers cost-effective options, such as access to State Tribunals, should there be a need to resolve disputes with their landlords.
The amendments also address some of the time constraints that faced small business when it comes to initiating court action.
The Act previously stated that action for damages must be taken within three years and in some cases two years, of the breach. This created difficulties where problems take some time to become apparent. For example, signing an insurance contract where the problems surface later; or lengthy investigations. The time has now been extended to 6 years, placing small business in a better position to deal with unfair business practices.
By filling in gaps in existing legislation and clarifying some important anomalies, these changes as a whole emphasise Parliament's recognition of the need to support small business against unconscionable and anti-competitive behaviour of larger organisations. The ACCC welcomes its broadened role in providing that support.