The Chairman of the Australian Competition and Consumer Commission, Rod Sims, has recently announced the Commission's key goals for 2012. While formally releasing an expanded and more detailed Compliance and Enforcement Policy, Mr Sims outlined the Commission's five 'high level objectives' for 2012. In this article, we summarise these objectives and comment on their practical implications for business.
Mr Sims expressed some concern that the recent introduction of the nationally integrated Australian Competition Law has brought with it profound changes both to the law and the ACCC's powers of enforcement that are not fully appreciated. The ACCC is to work closely with its state and territory counterparts to remedy this. While it will engage in the education of consumers and the business community, special focus will also be placed on taking enforcement action.
It can be expected that sectors such as telecommunications and retail energy supply will be subjected to special scrutiny.
The ACCC will commit resources to work against advantage being taken of what it sees as particularly vulnerable consumers, such as the elderly or indigenous Australians in remote areas. Areas of particular concern include high pressure door-to-door selling, the sale of useless goods and direct debit arrangements.
The ACCC intends to watch concentrated markets especially carefully to guard against anticompetitive mergers and arrangements, as well as unilateral conduct.
The Commission is acutely aware of public concern and discussion about the perceived conduct of operators in the supermarket and retail petrol industries. The ACCC will give priority to determining whether there are, in fact, any contraventions of competition laws in these sectors.
The ACCC will also increase its efforts with respect to cartel conduct, again through the two-pronged approach of education and enforcement. The Commission is concerned that a great deal of business people at all levels are still insufficiently informed about the types of behaviour that amount to cartel conduct or how to detect them. It is anticipated that criminal prosecutions may have to be brought simply to get the message across.
The Commission intends to have a higher level of engagement in public debate about policy and has highlighted merger policy and the regulation of monopoly assets as areas of focus this year.
While existing merger policy in Australiaworks well in the vast majority of cases, the ACCC appears to see some room for possible refinement. In an apparent response to the Federal Court's criticism of the ACCC's analysis as being overly theoretical and speculative in the recent Metcash case, the Commission has affirmed that future merger reviews will be based on commercial assessment, rather than abstract theory. However, the Commission also considers that it is often criticised after the event for failing to anticipate the consequences that flow from a merger. It would appear that the Commission's intention is to explore ways to avoid this.
The Commission will also agitate discussion about whether the existing regulatory regime is the most appropriate model or whether greater certainty for investors and potential users of new facilities can be achieved through a different approach.
Given the international aspects of many markets, and in light of already successfully having worked with regulators internationally in combating cross-boundary cartel behaviour (such as the air cargo cartel), the ACCC intends to step up its engagement and cooperation with its international counterparts, particularly within the Asia-Pacific region.
The fact that the ACCC has both developed and publicly announced a programme of key areas of focus for the year gives some indication of the direction the agency will take under its new Chairman.
It is apparent that each year the Commission will actively look for and strategically select a number of areas of the economy that warrant particular attention. It will aim continually to improve all aspects of its own activities, and seek to influence developments in competition and consumer policy and the law. It will also engage with the public more effectively, both in terms of its own activities and objectives, education and policy debate.
What effect its "commercial assessment" approach to merger reviews will mean in practical terms remains to be fully seen. It will require a number of more complex reviews to be conducted before any pattern or trend can be identified.
Most notably, however, the regulator has made it clear that it intends to be much more willing to take enforcement action against perceived contraveners, particularly in the Courts. In this context it should always be borne in mind that, while the ACCC may focus on particular industries or types of conduct from time to time, this will not distract it from monitoring all other areas of the economy and taking enforcement action when necessary.
These factors, in combination with the continual developments in competition and consumer law, mean that steps must be taken to ensure that compliance programmes are frequently reviewed and kept up to date. In particular, active monitoring of legal developments is required and, whenever appropriate, training of personnel must be promptly updated.
Be the first to receive the latest articles, news and publications.