The latest in competition and consumer law 4 min read
On 20 May 2022, the Australian Labor Party published a competition policy outline that pointed to a strong focus on protecting consumers and small businesses.
The objectives shared included:
- increasing maximum penalties for anti-competitive behaviour from $10 million to $50 million;
- introducing a 'Super Complaint' function within the ACCC; and
- making unfair contract terms illegal and subject to ACCC investigation and pecuniary penalty, consistent with legislation that was before parliament prior to it being prorogued for the election.
According to the new Labor Government, these changes will address anti-competitive behaviour which is driving up the cost of living for Australian families whilst recognising the issues faced by small businesses, including unpredictable cash flows and staff shortages.
To learn more, see our Insight: What to expect from the new Labor Government on competition policy, where we outline the policy changes in more detail and what they mean for businesses.
On 30 May 2022, the ACCC instituted proceedings in the Federal Court against Mastercard for allegedly engaging in conduct with the purpose of substantially lessening competition. The ACCC alleges that Mastercard entered into agreements with over 20 major retailers with the purpose of deterring the volume of debit card transactions through the competing eftpos network. The agreements gave retailers cheaper rates for Mastercard credit card payments, provided they committed to processing all or most of their debit card payments through Mastercard, rather than eftpos.
The ACCC considers Mastercard's conduct meant retailers did not receive the full benefit of increased competition and lower prices intended to flow from the RBA's least cost routing initiative. Least cost routing gives businesses the option to choose the lowest cost debit card network to process their debit transactions. The ACCC alleges that out of the three major debit card networks, eftpos was often cheaper than Mastercard or Visa.
These proceedings are consistent with the ACCC's focus on improving competition in the financial services sector and tackling anti-competitive conduct by firms it considers to have market power. ACCC Chair Ms Gina Cass-Gottlieb also outlined these priorities in the keynote address to the AFR Banking Summit on 31 May 2022. Ms Cass-Gottlieb spoke of the need for strong enforcement action in the financial services sector, combined with working with businesses to raise compliance and best practice.
A number of Australia's largest chicken meat processors have agreed to change terms in their contracts with chicken growers after the ACCC investigated the use of unfair terms in the industry.
The ACCC's investigation found that a number of terms in the contracts were potentially unfair and could lead to significant financial harm to growers. Some terms allowed processors to unilaterally vary growers' supply arrangements or impose additional costs on growers.
The ACCC considers the agreed changes to the terms will provide greater certainty and transparency for growers, including by clarifying when a processor may require growers to upgrade their farm facilities.
The ACCC commented that proposed changes to unfair contract term laws will also better protect Australian small businesses from these kinds of terms. To learn more about the proposed changes, see our Insight: What to expect from the new Labor Government on competition policy.
The ACCC has urged consumers to urgently check whether their LG, SolaX or Opal home energy solar systems are using dangerous and recalled LG solar energy storage batteries. Consumers are advised to switch off their batteries if they are, and contact the manufacturer immediately.
These batteries present a safety risk as they can overheat and catch fire, causing nine reported incidents in Australia since 2019. Despite LG issuing a recall, around 6400 affected batteries have not been replaced. The ACCC is concerned that some consumers may be unaware of the recall and the dangers of the batteries.
LG will replace all affected batteries free of charge when replacements are available.
The ACCC has published NBN Co's proposed variation to its Special Access Undertaking and is seeking submissions from stakeholders.
The variation to the Special Access Undertaking is a key part of NBN regulation and sets the maximum terms and conditions for broadband providers' access to the NBN until 2040. Given the impact of the proposed variation on the price, quality and range of broadband offers, the ACCC is conducting a public consultation to hear from stakeholders, including retailers who sell NBN services and households and businesses that are reliant on the NBN.
The variation would create a single regulatory framework covering all network technologies by incorporating fibre-to-the-node as well as other copper-based technologies within the undertaking. It also proposes significant changes to product and pricing commitments, NBN Co's framework for cost recovery and ACCC rules for assessing network expenditure.
The ACCC is seeking feedback from interested parties on the proposed variation by 8 July 2022.