2017 ACCC Enforcement Priorities: Onwards and Upwards with Penalties

On 24 February the Chairman of the ACCC launched its 2017 Compliance and Enforcement Policy which identifies the industries and issues it will focus on in the year ahead.

Enforcement activity will be directed in particular to misleading and deceptive practices, anti-competitive conduct, and unfair contract terms affecting small businesses, with particular priority on:

  • Unilaterally imposed standard contract terms which place small businesses at a significant disadvantage, following the introduction of new laws to protect small business in 2016.
  • Cartels, with advanced investigations into further cartel activity following the first 2 criminal cartel charges being laid in 2016.
  • Misconduct in the health sector, including improving compliance with the Australian Consumer Law in the private health insurance industry and taking further enforcement action against health insurers.
  • Anti-competitive conduct in the commercial construction sector, with the establishment of a new commercial construction investigation unit within the ACCC.
  • The Agriculture sector, following the appointment of a commissioner dedicated to the sector, Mick Keogh, in early 2016.
  • The application of consumer guarantees to complex products and services including practices in the airline, telecommunication and motor vehicle industries.

It is clear that the ACCC will also be seeking increased penalties in enforcement action for contraventions of both consumer and competition law. In launching the ACCC’s policy Mr Sims said:

In 2017 we will be making concerted efforts to ensure that the penalties we seek make larger companies and individuals who work in them consider their business practices, and how their business practices meet their obligations under competition and consumer law. This approach may lead to fewer agreed settlements, at least initially.

That approach follows and is supported by 2 significant developments in December 2016:

  • The Full Federal Court decision of Jagot, Yates and Bromwich JJ to increase penalties to Reckitt Benckiser for misleading representations from $1.7m to $6m (Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181).
  • The decision of Justice Wigney in the Federal Court when considering whether to approve penalties for attempted anticompetitive conduct agreed between the ACCC, the ANZ Bank and Macquarie Bank (Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Limited [2016] FCA 1516 at [146]-[149]). where his Honour expressed reservations and said the agreed penalties were: “in my view, the agreed penalties are at the very bottom of the range of appropriate penalties. … A very sizable penalty is plainly required to deter a financial institution of the size of ANZ from engaging in such conduct again. Equally, a very sizeable penalty is required to deter institutions in positions similar to ANZ who might be tempted to engage in similar contravening conduct … I almost certainly would have imposed higher penalties”.

Ian Wylie was the founding Head of Dispute Resolution and Competition at Practical Law Australia. Prior to joining the Practical Law Australia team, he practised as a partner in Norton Rose Fulbright followed by Ashurst for 16 years, then as a barrister at the New South Wales Bar for 11 years. He has experience in a range of industry sectors advising on corporate and commercial law and dispute resolution management and strategy, and appearing in regulatory investigations and competition and consumer protection, intellectual property and other commercial litigation.

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