The ACCC has released its ACCCount report, providing an insight into the ACCC’s activities for the April to June quarter and its performance against its key outcomes. You may recall from our earlier blog post that, in setting the ACCC’s priorities for the year, Chairman Rod Sims emphasised that effective enforcement of competition laws goes hand-in-hand with market studies so as to lower barriers to competition and ensure markets are well-functioning. The ACCC’s recent performance reflects this dual-track approach to championing the objectives of competition law.
The April to June 2019 quarter saw the ACCC achieve a number of key enforcement outcomes, including:
- obtaining a penalty of $19 million against PT Garuda, the last in the series of air cargo cartel cases which were first commenced by the ACCC in 2008;
- commencing eight proceedings for alleged breaches of the Australian Consumer Law on top of the 29 continuing proceedings. Notably, the ACCC narrowed its focus on consumer issues faced by vulnerable and disadvantaged consumers by commencing proceedings against Bupa Aged Care for allegedly false or misleading representations to its aged care residents about services it did not provide;
- continuing to monitor compliance with the compulsory Takata airbag recall.
The ACCC also made inroads into meeting its commitment to bringing at least two criminal cartel matters each year, as criminal cartel proceedings were commenced against Vina Money Transfer and five individuals in June 2019 for alleged price fixing of the Australian dollar/Vietnamese dong exchange rate.
The quarter was slightly less busy for the mergers team with 59 confidential merger matters pre-assessed (down from 79 in the previous quarter) and 4 public reviews carried out (down from 7 in the previous quarter). A key decision in the quarter was the ACCC’s high profile opposition of a proposed merger between TPG Telecom Limited and Vodafone Hutchison Australia, which was opposed on the basis that it would reduce competition and contestability in the sector. The ACCC’s decision is being challenged by Vodafone and TPG before the Federal Court of Australia. This case, along with the ACCC’s recent appeal in the PN Aurizon proceedingsare likely to be the most significant substantial lessening of competition cases since the ACCC’s ultimately unsuccessful challenges of Metcash and Franklins’ merger in 2010.
In the post-Royal Commission world, regulators’ willingness to enforce the law is being closely appraised. In Mr Sims’ view, however, a singular focus on enforcement is not the best way of promoting the objectives of competition and consumer laws. Rather, Mr Sims advocates the use of other public policy tools, including through market studies and market research.
The importance that the ACCC places on its market studies and research remit is reflected in the steadily expanding scope of the ACCC’s research and market studies, much of which is interdisciplinary and spans a number of complex policy areas. In the Digital Platforms Inquiry, the ACCC considered issues relating not only to competition law, but consumer law, privacy and media content policy, and data practices. We expect this broad approach to market studies to continue.
As evidence of the level of activity in both self-initiated and government-directed studies, during the quarter, the ACCC:
- provided the government with a 618-page final report in the Digital Platforms Inquiry, after issuing more than 60 compulsory notices to market participants;
- commenced a review of major customer loyalty schemes;
- published interim reports for the Wine Grape Market Study and the Gas Inquiry; and
- released the Guide to the Electricity Retail Code, to assist retailers to understand their obligations under the code.
The ACCC continues to consider market studies as a key part of its regulatory toolkit and a method by which it is able to meet growing public expectations.
Hand Tools in Black and White by Hunter Hayley / Unsplash / Licence / Resized
