ACCC assists Franchise Council with delayed Retail Tenancy Code of Conduct plans

The competition regulator is assisting the Franchise Council of Australia with its Retail Tenancy Code of Conduct to ensure there are no anti-competitive provisions in the mooted voluntary code for landlords and tenants.

Michael Schaper, the deputy chair of the Australian Competition and Consumer Commission, says the ACCC is occasionally approached by industries wanting to ensure there are no anti-competitive provisions within their voluntary code of conduct.

The ACCC’s input is standard practice, he says, and is not an endorsement of the code. The regulator also encourages industries to consult with the people it’s going to affect rather than surprising them with a code.

“There are plenty of times when an industry as a whole decides to create its own mandatory code,” Schaper says. “In those cases, it’s often the case that they come to us and we keep an eye on them [the codes] to see they don’t have anti-competitive provisions.”

The ACCC on its website says its role with voluntary industry codes of conduct in recent years has ranged from providing guidance to industry associations to participating as an observer on code administration committees. “We do not have a formal role in enforcing non-prescribed voluntary industry codes of conduct and are only able to provide guidance to assist industry. We cannot and do not provide legal advice,” it says.

FCA first flagged the Retail Tenancy Code of Conduct in July, saying it would seek to address excess rent increases, unreasonable shop fit-out requirements, unreasonable behaviour in relation to end-of-term arrangements for sitting tenants, and abuse of market power when landlords offer contracts on a “take it or leave it” basis.

The FCA said last week that despite missing its own target of unveiling the Code of Conduct at its national convention in October, real progress has been made, with 30 networks representing about 800 outlets signing up. Discussions will continue with the ACCC this month.

But the prospect of a voluntary code of conduct for landlords and tenants remains a sore spot for the Shopping Centre Council, which represents shopping centre owners and managers. It has repeatedly rejected the idea – and the idea of talking it over with the FCA – pointing to myriad legislation and regulation already covering rental agreements.

Under the plans, a code administrative committee would be established to monitor the code. The committee would consist of one appointee from the FCA, one appointee from the Shopping Centre Council and two elected representatives of the signatories.