Online retail, carbon pricing on ACCC’s hit list for 2012

The competition regulator has warned that it will be taking a strong look at online sales and the relationship between ‘bricks and mortar’ and online sites, as part of a broad-ranging agenda this year.

In a speech delivered last night, Australian Competition and Consumer Commission chairman Rod Sims said problems with online sales were on the watchdog’s hit list for 2012, as well as raising the awareness of business and consumers about new consumer laws.

“The online economy provides many opportunities, but brings with it many risks,” Sims told the Law Society of New South Wales, Corporate Lawyers’ Committee.

“I still sometimes find businesses that think consumer law does not apply if you are trading online.”

“On the other hand, some ‘bricks and mortar’ businesses seem to think anything goes when it comes to preventing competition from new online players.”

The comments come as the ACCC reminds businesses and consumers of their rights and responsibilities under the new national Australian Competition Law, which provides statutory consumer guarantees. The regulator says its evidence suggests that some businesses, including high-profile ones, either don’t understand their obligations, or if they do, breach them.

It also follows reports in SmartCompany that some suppliers are trying to curb the growth of online retailers by refusing to supply them with product, and by attempting to manipulate prices.

Sims revealed that more than $11.2 million in penalties have been awarded by the Federal Court since July 2010, with two cases subject to appeal, under the new consumer laws. The ACCC has also issued 75 infringement notices since the law took effect, with more than $450,000 in penalties paid.

Sims says the results suggest that “some businesses are only slowly recognising the need for accuracy and honesty in advertising and claims they make to consumers or customers”.

“Too many businesses still have a long way to go before they meet legal and public expectations regarding accuracy and honesty in dealing with consumers,” he said.

The ACL contains penalties of up to $1.1 million for corporations and $220,000 for individuals, as well as infringement notices.

In a wide-ranging speech, Sims reiterated the ACCC’s intention to take on cases where the outcome before the courts is less than certain, and said the watchdog would be vocal about changes in law it thinks are necessary. “If we see a need for the law to be changed we will say so, publicly, so everyone can engage in the debate,” he said.

Other areas of focus for the ACC will be:

• Unconscionable conduct, which applies to both consumer-to-business transactions and many business-to-business transactions, and is defined as conduct that is irreconcilable with what is right or reasonable and it must show no regard for conscience. Areas such as door-to-door energy sales, and perhaps in the dealings of some major businesses with their suppliers are tipped.
• Misuse of market power by firms which have substantial power in order to substantially damage or eliminate their competitors.
• Vulnerable consumers; that is, consumers with low financial or language literacy, people in remote locations, and with restricted access to advice or services, and indigenous people.
• Misleading and deceptive conduct generally, particularly in relation to price rises flowing from the carbon price’s introduction in July.