The head of Australia’s competition watchdog has outlined the agency’s top enforcement and compliance targets for the year ahead.
Speaking at an event held by the Committee for Economic Development of Australia (CEDA), Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC) says the following areas will be those most closely looked over in 2017, as well as some important things businesses of all size can learn in the process:
1. Increased focus on big business
As Mr Sims pointed out, limited resources and a large number of complaints mean the ACCC is having to carve out its own niche and prioritise the complaints it pursues. As such, the regulator will look more at larger businesses in individual cases.
“We can’t deal with all the breaches of the [Competition and Consumer] Act,” he said, adding that last year, the ACCC received around 200,000 complaints, escalated 5,000 of those and took 30 matters to court.
This does not, however, mean that SMEs will completely avoid the gaze of the ACCC – simply that it will be more diligent in passing reports of misleading and deceptive conduct to the relevant state or territory fair trading bodies for investigation.
Additionally, the ACCC plans to take a more proactive role investigating sectors as a whole where large numbers of complaints are often received.
2. Unfair business-to-business contracts
Another aspect of its focus on corporate Australia will be to look more closely into business-to-business contracts and operations – particularly dealings with SMEs.
Unfair contract terms and clauses have long been a thorn in the side of many smaller businesses dealing with the big end of town.
“Our survey found that two-thirds of small businesses felt they had experienced harm as a result [of unfair contract terms],” said Mr Sims.
“I can foreshadow that we will have a big focus on unfair contracts in 2017, following the introduction of new laws to protect small businesses in 2016. What that means is that large companies can no longer have unilateral terms in their standard contracts that put small businesses at a significant disadvantage.”
He said addressing these concerns for SMEs is, “Almost more important than business to consumer [contracts].”
3. Fallout from court-inspired precedents
Businesses of all size, and even regulators and governments, will continue to deal with the ramifications of major court decisions. A good case in point, according to Mr Sims, was its anti-competitive proceedings against Flight Centre.
The case, in which Flight Centre was found guilty of attempted price fixing with airlines, has significant ramifications for aggregator sites and agents in a wide range of industries, including hotel bookings, where an agent competes by on-selling goods or services, but not in providing them.
Other areas where ongoing investigations will have ramifications for all operators include the gas market inquiry, health sector, agriculture and commercial construction.
4. Proactive education over reactive enforcement
“Education plays an important role in compliance, but sometimes we need to send a stronger message to businesses. Court action not only helps to sharpen businesses’ focus on what is and isn’t acceptable under the law, but acts as a deterrent to others that may be tempted in a race to the bottom,” said Mr Sims.
He added that as well as educating businesses about the law and their responsibilities, he says business leaders and marketers need to understand how their actions speak to their customers.
“Consumers do feel aggrieved, and they can have the perception of wrongdoing [by a business] even if the law was not actually breached,” he said.
“We also want to address perceptions of breaches, not just actual breaches.”
5. Consumer guarantees enshrined in law
Some business operators may find themselves under the spotlight in relation to consumer guarantees.
“[Consumer guarantee rights] exist alongside whatever policies a company has,” he said.
Mr Sims used the example of a new car dealership, where a newly purchased vehicle keeps going back for repairs because of the same issue.
“Major faults entitle a customer to a refund or a replacement,” he said.
“We need more clarity around what constitutes a major fault.”
Airlines and telcos will also be actively scrutinised to ensure that their consumer guarantees reflect the law, not just their own corporate policies.
6. NBN policing
As the NBN rollout continues, Mr Sims said the ACCC will continue its push for an NBN monitoring regime to ensure households and businesses are receiving the internet speeds they are paying for and are being promised by their ISP.
According to Mr Sims, telecommunications is a commonly complained about area, but at present it is difficult to ascertain whether telcos are underdelivering on internet speeds, or if it is the NBN itself.
Taking digitisation out of the ‘too hard’ basket for SMEs
By Jason Brouwers
The insanity of consumer expectations
By Jason Dooris
Forget how big you are: always have a start-up mentality
By Simon Larcey