ACCC to crack down on compliance

Take firmer stance on penalties.

The ACCC will further increase its enforcement action over the next year, ACCC chair Rod Sims told members at the Law Council of Australia’s Business Law Section annual general meeting held in Sydney.

Recently, the ACCC has won three significant consumer protection penalties: $10 million for Telstra; $10 million for Ford; and $9 million for Apple.Competition penalties have also been increasing, with a maximum penalty of $46 million for Yazaki, although this is currently under appeal.

“The ACCC is increasing its enforcement activities, and taking a firmer stance on sanctions and penalties with a view to making an even greater impact on compliance,” Sims said.

“We have been vocal in our advocacy for imposition of meaningful penalties that look not only at the conduct in question but also, crucially, the relative size of the company.

“We must alter incentives; it must matter a lot more to companies and their senior executives that they avoid breaching the Competition and Consumer Act.

“In consumer protection, we hope Federal Parliament will pass legislation this month that will see penalties increased nine-fold from $1.1 million to $10 million, with the further framework of options for three times the gain or 10% of turnover, to get this key deterrence.”

Sims also outlined the change in the ACCC’s approach to the merger review process for the growing number of complex and contentious transactions that require a public review.

“The most obvious change is our increasing use of our powers to obtain information, documents and evidence to improve our evidence gathering. In the last financial year we issued 89 notices, significantly more than the 44 in the previous financial year,” he said.

“These were concentrated in the relatively small number of mergers where our concerns warranted increased evidence gathering to be used for possible litigation.

“Merger parties should be aware that we do not just take a narrow merger assessment during our reviews and will consider any other related agreements to determine whether they would, combined with the acquisition, be likely to substantially lessen competition or whether separately they potentially breach other provisions in the Competition and Consumer Act.

“Despite the noise and commentary, I think that those of you who deal with us on a regular basis know well that our processes are consistently applied and our end game is getting the right decision.”

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