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Australian Competition and Consumer Commission - (ACCC)

Responsibility

The Australian Competition and Consumer Commission (ACCC) is an independent authority of the government of Australia. It was established in 1995 with the amalgamation of the Australian Trade Practices Commission (TPC) and the Prices Surveillance Authority to administer the Trade Practices Act 1974 (Cth). Its mandate is to protect consumer rights, business rights and obligations, perform industry regulation and price monitoring and prevent illegal anti-competitive behaviour.

The ACCC’s primary responsibility is to ensure that individuals and businesses comply with the Commonwealth competition, fair trading and consumer protection laws.

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 vigorous in bringing court actions against companies that breach the TPA. Penalties for non-compliance of the TPA can be quite severe.

Companies that do not comply with the restrictive trade practices provisions of the TPA 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 AU$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 AU$500,000

Companies that do not comply with the consumer protection provisions of the TPA may be fined by the Federal Court, up to $1.1 million 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 TPA 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 RTP provisions of the TPA.

Recently the ACCC has exercised its authority in a number of retail areas, including fining retailer Target for false advertising and Woolworths (known as Safeway in Victoria) for illegally fixing the price of bread however in the field of petrol price fixing between Coles and Woolworths, the ACCC remains mute. Federal Government and State Government both benefit by way of taxes raised by petrol sales - there is very little incentive to reduce prices and currently, very little public pressure to do the same, though before the 2008 Q4 price drop there was considerable public pressure to force petrol retailers to pass on price drops.

Product recall

The ACCC also cares of nation wide product recall and the following organisations are commissioned to assisting surveillance and monitoring of products quality in relevant areas [1].

  • 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

Chairpersons

Links

See: Trade Practices Act 1974 or RTF Format - Part 1 Part 2 Part 3














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