Roles
The ACCC administers the Trade Practices Act, and has standing to take action in the Federal Court of Australia to enforce its provision. The Trade Practices Act contains a broad range of provisions, such as provisions on [price fixing] cartels, misuse of market power, and misleading or deceptive conduct. The ACCC also reviews mergers. The ACCC, under the Act, also regulates certain industries by providing access to national infrastructure. The ACCC also has an educative role and seeks to educate both consumers and businesses as to their rights and responsibilities under the act.
The Australian Energy Regulator is a constituent but separate part of the ACCC and is responsible for economic energy regulation. It shares staff and premises with the ACCC, but has a separate board, although at least one board member must also be a Commissioner at the ACCC.
Restrictive trade practices
In most cases the spirit of the act, and thus the actions of the ACCC, favours neither consumer nor supplier, but strives to achieve a competitive market without artificial restrictions. For example, refusal of supply – a producer refusing to supply a potential retailer or customer with a product – is not itself illegal unless the action would have an anti-competitive effect on the market as a whole.
Penalties
The ACCC is committed in bringing court actions against companies that breach the Trade Practices Act. Penalties for non-compliance of the TPA can be quite severe.
Companies that do not comply with the restrictive trade practices provisions of the Trade Practices Act may be fined by the Federal Court. There are three ways the maximum fine can be calculated. The maximum possible fine is the larger of A$10,000,000; or three times the value of the illegal benefit; or (if the value of the benefit cannot be ascertained) 10% of turnover for the preceding 12 months. Individuals may be fined up to $500,000
Companies that do not comply with the consumer protection provisions of the Trade Practices Act may be fined by the Federal Court, up to $1.1 M for companies and $220,000 for individuals.
The ACCC also has power to accept, on its on behalf, court enforceable undertakings under s87B of the Trade Practices Act. Such undertakings may include a wide range of remedies to the conduct.
A range of other remedies can be ordered by the court. For example, companies are frequently forced to publish retractions of false advertising claims in national newspapers and at their places of business. Companies found in breach of the Trade Practices Act are usually bound to implement a compliance program to ensure future compliance with the act.
Although the penalties permitted by the Trade Practices Act are quite severe, there has been a reluctance by the courts to impose the maximum penalty. There has been a move recently to make certain offences under competition law (such as price fixing or participation in a cartel) into criminal offences rather than purely civil breaches. It is generally thought that the possibility of being found guilty of a criminal offence—and the possibility of a custodial sentence for executives involved—will provide a much stronger deterrent to anti-competitive behaviour.
Consumer confidence
The ACCC is regarded by some Australian business people as necessary but often ineffective, echoing the critics of American anti-trust laws, while Australian consumers generally hold the ACCC in high regard. Whilst it is acknowledged that the ACCC is required to help safeguard consumer rights, there has been occasional criticism of the organisation as being "all-talk-no-action". This criticism is most likely due to the inherent difficulty in obtaining sufficient evidence to prove breaches of the restrictive trade practices provisions of the Trade Practices Act.
Recently the ACCC has exercised its authority in a number of retail areas, including fining retailer Target for false advertising and Woolworths (including some Safeway branded supermarkets in Victoria, Australia) for anti-competitive liquor deals.[2] In 2008 the ACCC published findings of its inquiry into the competitiveness of retail prices for groceries in Australia. The report found that the Australian supermarket sector is "workably competitive", but price competition is limited by barriers to entry and a lack of incentive for the two major players, Coles and Woolworths, to compete on price. The report also noted that Coles and Woolworths engage in deliberate strategies designed to ensure they maintain exclusive access to prime sites such as shopping centres to prevent centre managers leasing space to competing supermarkets. In September 2009 the ACCC reached agreement with Coles and Woolworths to phase out restrictive lease agreements. The ACCC has enforced the law against producers of quack devices with medical claims like Power Balance.
Product safety and recalls
The ACCC maintains a website listing all Australian product recalls and the following organisations are commissioned to assist with the surveillance and monitoring of product safety in relevant areas.
Food products – Food Standards Australia New Zealand
Motor vehicles Department of Infrastructure, Transport, Regional Development and Local Government (Australia)
Therapeutic goods – Therapeutic Goods Administration
Agricultural and veterinary products – Australian Pesticides and Veterinary Medicines Authority
Electrical goods – Australian Electrical Equipment Safety Regulators
Gas and appliance – Gas Technical Regulators Committee Australia New Zealand
The ACCC, in conjunction with state and territory offices of fair trading, is responsible for developing and enforcing mandatory consumer product safety standards except where the product falls into the jurisdiction of one of the specialist regulators mentioned above.
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