Competition, Consumer & Regulatory

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In touch

Competition news

July 2016

Fiona Crosbie

Fiona Crosbie
Practice Leader, Competition
+61 2 9230 4383
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In Touch looks at what's been happening in Competition this month, and what it means for your business.

We hope you find this issue interesting and helpful. Please let us know if you would like us to investigate any competition news in the next month and, as always, get in touch.

Interesting Competition facts – July 2016

  • Following an investigation by the ACCC, criminal charges have been laid against Japanese company Nippon Yusen Kabushiki Kaisha for alleged cartel conduct. This is the first time criminal cartel proceedings have been brought in Australia.
  • Last week the UK's new Prime Minister, Theresa May, identified competition law reform as a key issue for the next government, through ensuring that 'markets work better for people'. Ms May dusted off the idea of the 'national champion', referring to the negative consequences of British companies, such as Cadbury's or AstraZeneca, being acquired by foreign corporations.
  • The Australian Competition Tribunal has, once again, authorised a merger that the ACCC previously opposed. Sea Swift was granted authorisation to acquire certain assets of the Northern Territory and far north Queensland marine freight business of Toll Marine Logistics Australia.

Unconscionable conduct: ACCC sues Medibank Private

The ACCC is suing Medibank Private, alleging it engaged in unconscionable and misleading conduct. The case relates to Medibank’s failure to notify in advance its own members, and those of its subsidiary brand 'ahm', its decision to restrict benefits payable for in-hospital pathology and radiology services.

The ACCC alleges that Medibank did not provide members with any advance notice of the change despite previously representing that it would do so and adopted a strategy of keeping communications about this change contained and reactive. The ACCC also alleges that Medibank calculated there was a risk that the publicity around the benefit change would damage Medibank’s brand and reputation, and have a negative impact on its planned initial public offering of securities. The ACCC's press release is available here.

What this means
  • This case will provide further guidance on the often complex law relating to unconscionable conduct and is indicative of the ACCC's renewed focus on bringing proceedings.
  • The decision will have important implications for the insurance industry, and the need to make sure policy holders are kept up to date with amendments and modifications to their policies.

If you would like more information on this issue, get in touch with Rosannah Healy.

Online reviews and endorsements: consumer law goes international

Consumer law has gone international in the wake of the release of guidelines by the International Consumer Protection and Enforcement Network (ICPEN) for those involved in the collection, moderation and publication of online reviews and endorsements. Consumer protection agencies around the world, including the ACCC, are examining and exchanging information on online reviews and endorsements. The ACCC suggests that businesses should familiarise themselves with ICPEN’s guidelines. Although not mandatory, it is hoped that compliance with these guidelines will build consumer confidence in online reviews, and help review platforms, traders and bloggers avoid regulatory action. ICPEN has developed three targeted guidelines, including:

What this means
  • For those involved in managing online review platforms, as well as traders and bloggers, these guidelines will assist in developing their compliance strategies and processes.
  • The ACCC is increasing its focus on compliance with consumer protection laws in the online space combined with a greater level of international cooperation with other consumer protection agencies.

If you would like more information on this issue, get in touch with Jacqui Downes.

Market study: ACCC launches market study into new car retailing

Following a trend that began in 2015, the ACCC recently announced another market study, this time focused on new car sales in Australia. ACCC Chairman Rod Sims said the ACCC was taking action after continuing to receive a high volume of complaints from consumers about vehicle defects, covering a broad spectrum of manufacturers:

These complaints reveal that many consumers are having difficulty enforcing their consumer guarantee rights, which are in addition to the warranties provided by manufacturers.1

The market study will focus on:

  • compliance with the consumer guarantees in the Australian Consumer Law (the ACL) and consumers' ability to enforce their rights;
  • false, misleading and deceptive practices in performance, fuel efficiency, fuel consumption and emissions; and
  • the effect on competition and consumers of post-sale care arrangements (such as servicing).
What this means
  • Market studies are becoming an increasingly common mechanism for the ACCC to investigate an entire industry sector.
  • Compliance with the ACL provisions on pricing, advertising and consumer guarantees are likely to feature strongly in the ACCC's market study.
  • The ACCC will release an issues paper later this year, providing detailed information on the scope of the study and invite written submissions. A draft report of findings will be released in the first quarter of 2017.

If you would like more information on this issue, get in touch with Carolyn Oddie.

Cartel conduct: ACCC prosecutes polycarbonate roof sheeting cartel

The ACCC is suing four companies and three individuals for alleged cartel conduct in relation to the supply of polycarbonate roof sheeting (polycarb) to retailers. Among those being sued are Palram Australia and Ampelite, two of Australia’s largest distributors of polycarb to retailers including hardware stores and construction companies, and also EGR, a manufacturer of polycarb. The ACCC alleges that between 2008 and 2013, these companies made and gave effect to a number of cartel arrangements that had the purpose of preventing or restricting the supply of polycarb to retailers, thereby increasing prices.

Further, the ACCC claims that the key representatives of each company, as well as Palram Australia’s parent company, were knowingly concerned with the alleged conduct. The ACCC is seeking declarations, pecuniary penalties against the companies and individuals and other orders.

What this means
  • The ACCC continues its practice of joining individuals to cartel proceedings.
  • It will be interesting to see whether the building and construction sector is likely to be a continued area of focus for the ACCC.

If you would like more information on this issue, get in touch with Kon Stellios.

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