Updates to ACCC undertakings – what you need to know

The ACCC recently updated its “Guidelines on ACCC approach to court enforceable undertakings” (Guidelines).

The Guidelines reflect the ACCC’s current approach to negotiating and administering court enforceable undertakings. Undertakings can be a cost-effective, timely and tailored redress solution for businesses in response to ACCC enforcement actions.

What you need to know

• Businesses will now need to make an explicit admission of their contraventions for the ACCC to accept an undertaking.
   
• The ACCC will now allow businesses greater flexibility to engage the same external expert to undertake both the risk assessment and compliance program audit (which will reduce overall costs of the program).
   
• Businesses should review and update their training and compliance programs, including drawing their officers’ attention as part of their compliance policies to potential personal liability should they be ‘involved’ or ‘knowingly concerned’ in a contravention.

Guideline updates

The key changes to the Guidelines are:

1. the ACCC indicating a strong preference for admissions to be included in undertakings to better reflect the contravener’s contrition and commitment to future compliance. Mere acknowledgment of the ACCC’s concerns is unlikely to be considered sufficient; 
    
2. clarification that there is no legal condition that the ACCC needs to be satisfied that a breach has, or is likely to have, occurred before it can accept an undertaking;
    
3. an emphasis that the ACCC’s decision on each undertaking is on a case-by-case basis, and prior undertakings do not create precedents. That is, the ACCC is not bound to accept undertakings in similar circumstances in the future nor does the acceptance limit the ACCC’s assessment of what conduct may or may not amount to a contravention in other circumstances; and
    
4. inclusion of an express statement that a court enforceable undertaking does not restrict the ACCC’s ability to take enforcement action if the undertaking terms are not complied with or if there is new evidence of a contravention.

Compliance program template updates

The ACCC has also updated its compliance program templates to reflect the Guidelines (given many undertakings involves the contravener making a commitment to implement or update its compliance programs).

The compliance program template clarifies that:

1. as part of the business’ compliance policies, businesses need to draw their officers’ attention to the risk of personal liability where its officers are involved in a contravention, including risk of internal disciplinary action and indemnification prohibitions under the law; and
    
2. businesses can now engage an independent compliance expert (i.e. an external law firm) to undertake both the risk assessment reports and compliance reviews for compliance programs where that expert is not otherwise conflicted and has not designed any aspect of the business’ compliance program.

With the significant repercussions for breaching competition and consumer law, compliance is king.