INSIGHT

COVID-19 cooperation to continue; international regulators team up on investigations; charity claims under the lens; and other developments

By Jacqueline Downes
ACCC Consumer law Infrastructure Technology Telecommunications

Latest from In Touch 8 min read

The ACCC has authorised supermarkets and energy market participants, amongst others, to continue to cooperate in response to the COVID-19 pandemic. Coles and the Australian Energy Market Operator (AEMO), both represented by Allens, successfully applied to the ACCC for authorisation to engage in industry cooperation in light of the pandemic, with Coles seeking to ensure that consumers have fair and equitable access to groceries; and AEMO seeking to ensure safe, secure and reliable access to energy for Australian homes and businesses.

The ACCC announced that competition regulators from five countries including Australia have signed a new cooperation agreement. The agreement aims to facilitate better coordination on cross-border investigations, particularly those into digital platforms.

The Federal Court has penalised eyewear retailer Oscar Wylee $3.5m for misleading or deceptive conduct and making false or misleading representations about its charitable donations and affiliations.

The ACCC has cleared the merger between Mylan and Upjohn (currently owned by Pfizer) after the parties offered divestment undertakings in response to the ACCC's competition concerns. Allens acted for Pfizer/Upjohn in securing clearance for this transaction.

As part of its Digital Platform Services Inquiry, the ACCC has released an Issues Paper seeking to examine the state of competition in mobile app markets.

The Australian Competition Tribunal has granted authorisation for a new consumer code for retailers of 'new energy tech' products, varying the conditions from those previously imposed by the ACCC in relation to 'buy now pay later' finance providers. Allens acted for the authorisation applicants before the Tribunal.

Supermarkets, energy market participants and others authorised to continue to coordinate in response to the COVID-19 pandemic

On 3 September 2020, the ACCC issued a final determination granting authorisation to allow supermarket operators including Coles, Woolworths, Metcash and Aldi to continue cooperating in response to the COVID-19 pandemic. Coles, represented by Allens, applied for authorisation on behalf of itself and the other supermarket chains.

Cooperation will be permitted to ensure that consumers have fair and equitable access to groceries while the pandemic persists. In light of the COVID-19 outbreak and Stage 4 restrictions in Victoria, the ACCC highlighted the benefits of the authorisation in assisting retailers to maintain the supply of grocery products, including to customers in regional and remote areas.

On 17 September 2020, the ACCC issued a final determination granting authorisation to allow the AEMO and participants in gas and electricity markets to continue to cooperate on measures to ensure secure energy supplies during the pandemic. Allens represented AEMO in its application for authorisation.

The authorisation allows energy market participants to continue to cooperate to share essential personnel, essential inputs such as parts and equipment, information about the operation of their facilities, and to coordinate repairs and maintenance. The ACCC noted that reliable and efficient energy supplies are essential to Australian homes and businesses, and that the authorisation will allow industry to cooperate to minimise the risk of energy shortfalls over the summer peak period. The authorisation does not allow sharing of information about, or agreements on, wholesale or retail energy prices, or retail costs or profits.

The ACCC has granted further COVID-19-related final authorisations to a range of other organisations recently, including the Australian Institute of Petroleum, nbn co, the National Pharmaceutical Services Association and the Medical Technology Association of Australia.

Strength in numbers: competition regulators sign agreement to cooperate on cross-border investigations

On 3 September 2020, the ACCC announced that competition regulators from five countries including Australia have signed a new cooperation agreement.

The Multilateral Mutual Assistance and Cooperation Framework for Competition Authorities (MMAC) was signed by the ACCC along with competition regulators in the United States, United Kingdom, New Zealand and Canada. In order to better coordinate cross-border investigations, the competition regulators from the five countries have agreed to share:

  • intelligence and confidential information;
  • case theories; and
  • investigative techniques.

The cooperation agreement also intends to improve the provision of mutual investigative assistance, executing searches and seizures and cross-border evidence gathering.

ACCC Chair Rod Sims noted the increasingly interconnected nature of the global economy and that many players in the digital economy operate internationally. Mr Sims also outlined that the cooperation agreement will be particularly helpful in existing and future investigations of digital platforms, many of which are being closely monitored by competition regulators globally.

Federal Court puts charity claims under the lens, penalising Oscar Wylee $3.5m

Eyewear retailer Oscar Wylee has been ordered by the Federal Court to pay $3.5m in penalties for misleading or deceptive conduct and for making the following false or misleading representations about its charitable donations and affiliations:

  • Oscar Wylee made a range of statements in its social media posts, emails, promotional merchandise and on its website that for each pair of glasses a consumer purchased, it would donate a pair of glasses to someone in need. Oscar Wylee admitted that, in fact, it only donated about one set of frames for every 100 pairs sold.
  • Oscar Wylee also admitted to making false or misleading representations to consumers that it was closely affiliated with the charitable organisation Rose Charities, which helps build eye care programs in Cambodia. In fact, Oscar Wylee's association with Rose Charities in the period 2014—2018 consisted of a single donation of $100 and 100 frames in 2014.

The ACCC was critical of Oscar Wylee's statements, commenting that not only were the statements false and unable to be verified by consumers; but also that Oscar Wylee portrayed itself as a socially-conscious and charitable company when in fact it 'deprived disadvantaged people in need of the benefits it promised'. The Federal Court agreed, characterising the conduct as a 'betrayal' of Oscar Wylee's promises to socially-conscious consumers.

The ACCC has also noted that the penalty should 'serve as a reminder for any company considering making false claims to its customers in its marketing material, whether online, by email, on video, on social media or in store.'

ACCC clears the merger of Pfizer's Upjohn division with Mylan

The ACCC has announced it will not oppose the merger of Pfizer's Upjohn division with Mylan after the parties offered divestment undertakings. Allens acted for Pfizer and Upjohn in securing clearance for this merger, which will create a new company named Viatris.

Pfizer, Upjohn and Mylan are global pharmaceutical companies offering a wide range of products in Australia. Upjohn's Australian products are 'off-patent' products (brand-name products subject to patents that have expired) whereas Mylan supplies generic, branded and biosimilar products in Australia.

The ACCC sought undertakings in respect of three branded products, specifically Caduet (a lipid-regulating cardiovascular treatment), and Xalatan and Xalacom (both anti-glaucoma treatments). The parties undertook to divest these three products to Aspen Global Inc, a large third-party pharmaceutical company.

The ACCC intends to publish a Public Competition Assessment setting out its reasons for clearing the transaction in due course. The merger is also subject to review in other jurisdictions, and has been conditionally cleared in the European Union and cleared subject to divestments in New Zealand.

What's app-ening: ACCC publishes Issues Paper examining competition in mobile apps market

The ACCC has announced it will be examining the state of competition in mobile app markets, as its five-year Digital Platforms Services Inquiry continues. The ACCC intends to explore the use and sharing of data by apps, the extent of competition between Google and Apple's app stores, and whether more pricing transparency is needed in Australia's mobile apps market. ACCC Deputy Chair Delia Rickard also noted that the ACCC intends to provide greater transparency on app store owners' processes for providing access to their stores to app developers and suppliers—a matter that is currently the focus of an antitrust lawsuit lodged against Apple by Epic Games in the United States.

The ACCC has released an Issues Paper seeking views and feedback from app developers and suppliers, as well as surveys for consumers and app developers to share their views. App marketplaces will be the subject of the ACCC's second interim report in this inquiry, due on 31 March 2021.

In the meantime, the ACCC's first interim report in this Inquiry is due on 30 September 2020 and will focus on internet search engines, social media and online private messaging. The ACCC is required to produce further interim reports six-monthly until its final report in March 2025.

Australian Competition Tribunal authorises New Energy Tech Consumer Code

The Australian Competition Tribunal has granted authorisation for a new consumer code for retailers of 'new energy tech' products.

The New Energy Tech Consumer Code sets minimum standards of good practice and consumer protection in relation to solar generation systems, energy storage systems, electrical vehicle charging and other emerging energy products and services. It applies to all aspects of customers' interactions with participating retailers, including marketing, sales, finance, payments, warranties and complaints handling processes.

In December 2019, the ACCC originally imposed conditions seeking to strengthen consumer protection requirements for 'buy now pay later' (BNPL) providers. Flexigroup, a BNPL provider, sought a review of the ACCC's determination, seeking to replace the ACCC's conditions with less stringent requirements, including the removal of the prohibition on BNPL finance being offered with unsolicited sales of new energy tech products.

The Tribunal concluded that the evidence did not establish that the provision of BNPL finance with new energy tech products generated material consumer harm. It also found that BNPL was a significant and popular finance option for consumers and that there was substantial detriment in restricting access. Having reached this conclusion, the Tribunal varied the conditions of authorisation in relation to the requirements that BNPL finance providers must meet in order for signatories to offer BNPL finance arrangements under the Code, and removed the prohibition relating to unsolicited sales.

Allens acted for the Authorisation Applicants (Australian Energy Council, Clean Energy Council, Smart Energy Council and Energy Consumers Australia) before the Tribunal.