Certain complaints made to the ACCC by consumer or small business advocacy groups may soon be streamlined and escalated under the Federal Government’s ‘super complaints’ bill (the Bill) (available here) currently being considered by Parliament, and recently endorsed in a report by the Senate’s Economics Legislation Committee (Senate Committee Report) (available here). There were also no complaints from the ACCC which welcomed the Bill.
This blog post explains what’s in the Bill, what we can expect it to achieve in Australia based on similar ‘super-complaints’ legislation in the United Kingdom, as well as what stakeholders had to say in their submissions to the Senate Committee Report.
What is in the draft Bill?
The Bill establishes a system for certain groups, as approved by the Minister (designated complainants), to submit complaints to the ACCC (designated complaints) which the ACCC will be required to respond to within 90 days. Key elements of the Bill are outlined below.
What is a designated complaint?
The Bill proposes that a designated complaint must relate to:
- a significant or systemic market issue affecting consumers and/or small businesses in Australia; and
- either a breach of the Competition and Consumer Act 2010 (CCA), or the ACCC’s powers or functions.
Additional requirements may be prescribed by the Minister.
Who will be able to make a designated complaint?
The precise details of how designated complainants are determined is not yet known. However, the proposed mandatory considerations for the Minister’s decision on applications suggest that established consumer and small business advocates with broad market interests are likely to be prioritised. The Bill states that the Minister must consider “the experience and ability of the applicant” in representing consumer and/or small business interests in relation to a range of market issues, and whether the applicant would, if approved, “act with integrity” in connection with its role as a designated complainant.
The Bill also provides the Minister with the ability to cap both the total number of designated complainants and the number of complaints that a designated complainant may make in a specified period.
When and how will the ACCC be required to respond to a complaint?
Once a designated complainant makes a designated complaint, the ACCC must respond within 90 days by either:
- issuing a ‘further action notice’ setting out actions the ACCC proposes to take in response to the complaint, commencing within the next 6 months. The ACCC may issue this notice if it is satisfied that the complaint meets the minimum requirements of a designated complaint (outlined above).
- issuing a ‘no further action notice’ if the ACCC is not satisfied that the designated complaint meets the criteria for further action.
Publication requirements
The ACCC will be required to publish on its website any notice or notification it provides in response to a complaint. There are limited exceptions to these publication requirements, such as where the ACCC is satisfied that the information should not be published due to its confidential nature.
How does this compare to legislation overseas?
As stated in the Explanatory Memorandum (available here), the Bill expressly draws on the United Kingdom’s super-complaints function under the Enterprise Act 2002 (UK). We have compared the key features of the Bill and the UK legislation below.
The most significant difference between the two legislative frameworks appears to be the timing by which the regulator must act, with the ACCC required to commence its actions in response to a complaint within 6 months, whereas there is no prescribed timeframe for regulator or government action under the UK system.
UK Super-complaints system in action: the loyalty penalty case
A well-publicised example of the UK super-complaint system in action is the complaint submitted by Citizens Advice in September 2018 in relation to so-called ‘loyalty penalties’.
The basis of the Citizens Advice complaint was a concern about long-term customers paying more for goods and services compared to new customers (a ‘loyalty penalty’), particularly in relation to mobile, broadband, savings accounts, mortgages and household insurance.
In December 2018, the CMA agreed that this was a significant problem for consumers and set out a package of reforms which included taking enforcement action and making recommendations to Ofcom (the telecommunications regulator) and the Financial Conduct Authority (FCA).
Outcomes have included new Ofcom rules requiring firms to notify mobile and broadband customers when contracts are ending and if better deals are available, and new FCA rules requiring home and motor insurers to offer renewing customers a price that is equal to or lower than the price for new customers. These actions were taken over the course of almost two years.
What changes did stakeholders recommend to the Senate Economics Legislation Committee?
Last week, the Senate Committee Report on the Bill was released (available here). The committee noted that submissions received were, overall, supportive of the proposed complaints mechanism and the benefits it would bring to consumers and small businesses. Some suggested changes to the legislation received from stakeholder submissions include:
- expanding the circumstances in which a ‘no further action notice’ should be issued by the ACCC – e.g. where the complaint has been subject to an inquiry or review in the past two years
- narrowing the circumstances in which a ‘no further action notice’ should be issued by the ACCC by reducing the ACCC’s discretion in deciding to issue such a notice
- amending or removing the Minister’s ability to set a maximum number of designated complainants and maximum number of designated complaints in a specified period due to concerns about these caps being too restrictive and the potential to limit the complaints mechanism’s effectiveness
- changes to the proposed 90-day timeframe for the ACCC to respond to complaints – one submission called for a shorter timeframe of 30 days to minimise the amount of damage experienced while waiting for the ACCC to investigate complaints, while others called for a longer timeframe to give the ACCC sufficient time to undertake comprehensive investigations
The committee acknowledged the concerns regarding the caps on the number of complainants and complaints but stated that these caps would support effective resource allocation within the ACCC. The committee recommended that the bill be passed.
The next step is for the Senate to debate and vote on the Bill. If passed, the legislation is expected to commence from July 2024.
By Brian Wu and Michael Baker
Image Credit: You Got Mail by Erica Steeves / Unsplash / Licence / Remixed to B&W and resized
