New ACCC super complaints proposal will require super compliance

From July 2024, small business and consumer advocacy groups will have the ability to ‘fast track’ competition and consumer law complaints for regulatory scrutiny, via a newly created dedicated complaints function.

What is the ‘Designated Complaints Function’?

The ACCC receives hundreds of thousands of enquiries and complaints per year, making review and investigation of all complaints impossible.

Under the new designated complaints function, the ACCC will expedite its review of complaints relating to widespread, systemic conduct raised by consumer advocates and business groups. These complaints will be reviewed separately to the ACCC’s standard complaints review process.

In order to qualify for fast track review, complaints will need to be raised by a ‘designated’ consumer and business group (for example CHOICE) nominated by the government. These designated groups will be able to “enlist the competition regulator to investigate serious complaints of behaviour that’s hurting Australians.”

It is likely that the ACCC will be required to investigate any complaint from a designated group.

How will it operate?

There are currently few details on how the complaints function will operate. However, it is likely that the government will draw inspiration from the ‘Super-Complaint’ mechanism that operates in the United Kingdom (UK).

Under the UK’s ‘Super-Complaint’ process a designated consumer body can make a complaint to the Competitions Markets Authority (CMA), provided the complaint meets certain criteria (including that it significantly harms the interests of consumers). The CMA must then (within 90 days of receiving the complaint) publish a response on how it proposes to deal with the complaint, including whether it will take action and what such action will be.

The UK process has been effective at raising complaints not just concerning individual businesses but also regarding economy/industry wide practices.

For example, in 2018 Citizens Advice submitted a super-complaint to the CMA regarding conduct of companies in various markets where long term and existing customers were being penalised and paying more for goods and services (‘loyalty penalty’). As a result of the complaint, the CMA launched ‘loyalty penalty’ investigations in 5 markets. The investigation also uncovered additional conduct including stealth price rises, costly exit fees, restrictions on switching contracts, and unfair auto-renewal. As a result, the CMA recommended enforcement action against the companies involved, pricing interventions and a “package of reforms” including recommendations to other UK regulators.

It is likely that the proposed ACCC designated complaints function could result in similar broad enforcement/regulatory outcomes.

What practices are most likely to be the subject of complaints?

Given the nature of the interest groups that will have access to the designated complaints function, conduct that is likely to result in significant harm to consumers or small businesses will take priority.  Some examples include: 

• unfair terms in standard form contracts with consumers or small businesses especially rights to refunds and other remedies;
• greenwashing or environmental sustainability claims;
• health claims;
• conduct affecting consumers who are vulnerable; and
• exclusive arrangements or predatory pricing that harm small business rivals.

In addition, complaints about price gouging may be raised with the ACCC even though it may not be a contravention of the law.

What does this mean for you?

The new complaints mechanism will provide a direct channel for designated groups to raise concerns with the ACCC about individual business conduct or more widespread sector conduct.

Companies may wish to brief these groups to make complaints to the ACCC on their behalf.  This strategy is likely to be successful if it can be shown that there is significant consumer harm from the conduct that is the subject of the complaint.

The new proposal also means that companies will again need to update and strengthen their compliance processes.  While previously the ACCC may not have commenced investigations on the basis of individual complaints, the ACCC is likely to be required to investigate complaints made by a designated group.