Tag: ACCC

Digital Platforms Inquiry Raises Significant Issues

The ACCC has released their preliminary report into Digital Platforms. A final report will be produced next year.

The issues raised are significant and far reaching, and questions the substantial market power players such as Google and Facebook have, the data they capture and monitise and their impact on the media. 94 per cent of online searches in Australia currently performed through Google.

Facebook and Instagram together obtain approximately 46 per cent of Australian display advertising revenue. No other website or application has a market share of more than five per cent.

They say there is a lack of transparency in the operation of Google and Facebook’s key algorithms, and the other factors influencing the display of results on Google’s search engine results page, and the surfacing of content on Facebook’s News feed.

Anti-competitive discrimination by digital platforms in favour of a related business has been found to exist in overseas cases. For example, in the European Commission’s 2017 decision, Google was found to have systematically given prominent placement to its own comparison shopping service (Google Shopping) and to have demoted rival comparison shopping services in its search results.

Monopoly or near monopoly businesses are often subject to specific regulation due to the risks of competitive harm. The risk of competitive harm increases when the monopoly business is vertically integrated. The ACCC considers that Google and Facebook each have substantial market power and each have activities across the digital advertising supply chain. Google in particular occupies a near monopoly position in online search and online search advertising, and has multiple related businesses offering advertising services.

This is their executive summary:

On 4 December 2017, the then Treasurer, the Hon Scott Morrison MP, directed the Australian Competition and Consumer Commission (the ACCC) to hold an inquiry into the impact of online search engines, social media and digital content aggregators (digital platforms) on competition in the media and advertising services markets. The ACCC was directed to look at the implications of these impacts for media content creators, advertisers and consumers and, in particular, to consider the impact on news and journalistic content.

Digital platforms offer innovative and popular services to consumers that have, in many cases, revolutionised the way consumers communicate with each other, access news and information and interact with business. Many of the services offered by digital platforms provide significant benefits
to both consumers and business; as demonstrated by their widespread and frequent use by many Australians and many Australian businesses.

The ACCC considers, however, that we are at a critical point in considering the impact of digital platforms on society. While the ACCC recognises their significant benefits to consumers and businesses, there are important questions to be asked about the role the global digital platforms play
in the supply of news and journalism in Australia, what responsibility they should hold as gateways to information and business, and the extent to which they should be accountable for their influence. In particular, this report identifies concerns with the ability and incentive of key digital platforms to favour their own business interests, through their market power and presence across multiple markets, the digital platforms’ impact on the ability of content creators to monetise their content, and the lack
of transparency in digital platforms’ operations for advertisers, media businesses and consumers.

Consumers’ awareness and understanding of the extensive amount of information about them collected by digital platforms, and their concerns regarding the privacy of their data, are also critical issues. There are also issues with the role of digital platforms in determining what news and information is accessed by Australians, how this information is provided, and its range and reliability.

Digital platforms are having a profound impact on Australian news media and advertising. The impact of digital platforms on the supply of news and journalism is particularly significant. News and journalism generate broad benefits for society through the production and dissemination of knowledge, the exposure of corruption, and holding governments and other decision makers to account.

It is important that governments and the public are aware of, and understand, the implications of the operation of these digital platforms, their business models and their market power.

The ACCC’s research and analysis to date has provided a valuable understanding of the markets that are the subject of this Inquiry, including information that has not previously been available, and has identified a number of issues that could, or should, be addressed. Many of these issues are complex.

The ACCC has decided that the best way to address these issues in the final report, due 3 June 2019, is to identify preliminary recommendations and areas for further analysis, and to engage with stakeholders on these potential proposals. Such engagement may result in considerable change from the ACCC’s current views, as expressed in this report.


Australians exiting private health insurance as price rises bite

The ACCC says many people are either abandoning their private health insurance policies or downgrading to lower-cost, lower-benefit products as premium increases continue to outpace inflation and wage growth.

In its annual report into the private health insurance industry, the ACCC found Australians are increasingly dropping their hospital cover, instead opting for just extras cover. Many people are also choosing policies with higher excess payments in an attempt to keep policy premiums to a minimum.

“People are increasingly feeling the pinch of private health premium increases and growing gap payments. In response, many are shifting to cheaper products with reduced coverage, and some are dropping their cover altogether,” ACCC Deputy Chair Delia Rickard said.

The affordability of private health insurance has been an increasing concern for consumers in recent years.

Many insurers will be updating their policies ahead of the Australian Government’s private health insurance reforms, which aim to make private health insurance simpler and more affordable, and come into effect on 1 April 2019.

The ACCC is warning private health insurers they must provide clear, prominent and timely communication with customers regarding changes.

“Private health funds have clear obligations not to mislead their customers under the Australian Consumer Law. Failing to properly tell customers about cuts to their benefits or policies may be a breach of the law,” Ms Rickard said.

“Ahead of 1 April 2019, we will be monitoring to see how health funds are telling consumers about changes to their policies and benefits. Private health insurers need to be transparent about what is and isn’t included in their policies or risk losing their customers’ trust and ultimately, their business.”

A copy of the ACCC’s report is available at: Private health insurance report 2017-18

Key industry developments and trends in 2017-18:

  • In 2017–18, consumers paid about $23.9 billion in private health insurance premiums, an increase of almost $834 million or 3.6 per cent from 2016–17.
  • The amount of hospital benefits paid by health insurers was $15.1 billion and the amount of extras treatment benefits paid was $5.2 billion.
  • In June 2018, 45.1 per cent of the Australian population held hospital-only or combined health insurance cover, a decrease of 0.9 percentage points from June 2017.
  • The proportion of the population holding extras-only policies increased from 8.9 per cent in June 2017 to 9.2 per cent in June 2018.
  • About 88 per cent of in-hospital treatments were delivered with no gap payments.
  • The average out-of-pocket expenses from hospital treatment increased by 3.3 per cent. Extras treatment recorded a decline of 0.7 per cent.
  • Consumers are also continuing to shift to lower cost policies with exclusions, or excess and co-payments. In June 2018, 44 per cent of hospital policies held had exclusions, compared with 40 per cent in June 2017. There was also an increase in hospital policies with an excess or co-payment from 83 per cent to 84 per cent.
  • Complaints to the Private Health Insurance Ombudsman (PHIO) have decreased by 21 per cent since June 2017. The PHIO attributes this to improved complaint handling processes of larger insurers and the smaller premium increases in 2018 compared to recent years.
  • Despite the decrease, the number of complaints received by the PHIO in 2017–18 is the second highest level recorded over the past five years.

Private health funds must provide accurate disclosures about their policies including any changes to the benefits available under their policies. Funds are not exempt from regulation and can face significant penalties if they breach the Australian Consumer Law (ACL).

Private health insurers and other health industry participants have been the subject of a number of recent ACCC enforcement matters for alleged ACL breaches. The ACCC has recently finalised action against Australian Unity. Enforcement matters involving NIB and Ramsay Health Care are ongoing, and the ACCC’s appeal in the Medibank matter is awaiting judgment.

Background

Each year, the ACCC is required by the Senate to produce a report on key competition and consumer developments and trends impacting on people’s health cover. This report covers the 2017–18 period.

This is the ACCC’s 20th report to the Senate under this order.

ACCC authorises agreements to promote affordable housing

The ACCC has granted authorisation for arrangements between SA Housing Authority, Renewal SA and land and property developers, which are designed to increase Adelaide’s supply of affordable housing.

This authorisation enables developers to agree to requests from SA Housing Authority or Renewal SA which could otherwise be a breach of competition laws, including agreement to cap prices for some properties, to rent or sell to certain identified tenants or purchasers, or agreement not to compete for the rental or sale of property.

The South Australian government’s stated goal is to make 15 per cent of all new significant developments available as affordable housing for people in the low to moderate income category, such as people employed in the health care, social services and administrative support occupations.

“The arrangements are likely to increase the affordable housing stock in the greater metropolitan region of Adelaide. This is likely to benefit people who are otherwise unable to access the general housing market or social housing in the region,” ACCC Commissioner Mr Roger Featherston said.

On 27 September 2018, the ACCC issued a draft determination proposing to grant authorisation for 10 years. No concerns have been raised about the arrangements.

“Housing affordability criteria are set and published by the South Australia government and developers have a wide range of land and property developments from which to choose,” Mr Featherston said.

Authorisation is granted until 2028.

Further information, including a copy of the ACCC’s determination, is available at SA Housing Authority and Renewal SA.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Background

In this case, SA Housing Authority and Renewal SA, and land and property developers may be considered competitors for the supply of affordable housing.

Therefore, by arranging to cap prices and not compete for the supply of rentals and the sale of properties, they risk breaching competition laws unless they have ACCC authorisation.

Property spruiker fined record $18 million

The ACCC says that the Federal Court has imposed record penalties totalling $18 million against We Buy Houses Pty Ltd (We Buy Houses) and its sole director, Rick Otton, for making false or misleading representations about how people could create wealth through buying and selling real estate, following ACCC action.

The penalties of $12 million imposed against We Buy Houses, and $6 million imposed against Mr Otton personally, are the highest ever imposed for contraventions of the Australian Consumer Law by a corporation and an individual, respectively.

The Federal Court also banned Mr Otton from managing corporations for 10 years in Australia and permanently restrained Mr Otton and We Buy Houses from further involvement in the supply or promotion of services or advice concerning real property transactions or investment.

“We Buy Houses and Mr Otton peddled false hope to people simply looking to get a foothold in the housing market or invest money in real estate for their future,” said ACCC Chair, Rod Sims.

“The record penalties imposed against both We Buy Houses and Mr Otton reflect their egregious conduct.”

“They have also effectively been permanently banned from any further involvement in real estate in order to protect consumers,” Mr Sims said.

“These record penalties demonstrate the determination of the ACCC to take strong and effective enforcement action against businesses and individuals who prey on consumers using the false hope of creating financial success. The judgement signals the Court’s condemnation of false and misleading property spruiking and get rich quick schemes.”

“This outcome also reflects a recent trend of higher penalties for Australian Consumer Law breaches. We can expect this to continue following recent law changes to increase maximum financial penalties under consumer law,” Mr Sims said.

We Buy Houses and Mr Otton taught real estate investment strategies via free seminars, and paid ‘boot camps’ and mentoring programs that claimed people could:

  • buy a house for $1, without needing a deposit, bank loan or real estate experience, or using little or none of their own money
  • create passive income streams through property and quit their jobs
  • build a property portfolio without their own money invested, new bank loans or any real estate experience, and
  • start making profits immediately and create or generate wealth.

In August 2017 the Federal Court found these claims were false or misleading, in contravention of the Australian Consumer Law.

“In her judgement on liability, Justice Gleeson said the free seminars were a waste of time, and that the boot camps and the mentoring programs were an expensive waste of time,” Mr Sims said.

The Court also found that Mr Otton had made false or misleading representations that he had successfully implemented the wealth creation strategies he taught. In addition, a book authored by Mr Otton, and websites operated by We Buy Houses and Mr Otton, included testimonials from ‘students’ claiming they were able to buy a house for $1, which the court found were false or misleading.

Background

The ACCC instituted proceedings against We Buy Houses and Mr Otton in March 2015 following a coordinated investigation with New South Wales Fair Trading. On 11 August 2017, the Federal Court delivered judgment on liability, finding that Mr Otton and/or We Buy Houses had engaged in multiple contraventions of sections 18, 29(1)(f), 29(1)(g), 34 and 37 of the Australian Consumer Law.

We Buy Houses had been conducting training programs including free seminars, boot camps and mentoring programs throughout Australia since around 2000. Between 2011 and 2014, We Buy Houses generated the majority of its $20 million revenue from conducting these training programs.

ACCC proposes to authorise agreements to promote affordable housing

The ACCC has issued a draft determination proposing to authorise SA Housing Authority and Renewal SA to enter into arrangements with land and property developers to increase the supply of affordable housing in the greater metropolitan region of Adelaide.

The government of South Australia has set a goal that 15 per cent of all new significant developments should be available as affordable housing.

Affordable housing is to be made available to people in the low to moderate income category, who are often employed in the health care, social services and administrative support occupations.

Under the proposed arrangements, SA Housing Authority and Renewal SA may ask developers to agree to cap prices for properties in some developments, agree to rent or sell to specified tenants or purchasers and agree not to compete for the rental or sale of property.

“The ACCC considers that the arrangements are likely to contribute to an increase in the supply of affordable housing in the greater metropolitan region of Adelaide. People who may otherwise find themselves excluded from both the general housing market and social housing, are likely to benefit from an increase in affordable housing,” ACCC Commissioner Mr Roger Featherston said.

“The arrangements are unlikely to result in public detriment. Housing affordability criteria are set and published by the government of South Australia and developers have a wide range of land and property developments from which to choose.”

The ACCC proposes to grant authorisation for 10 years and expects to make a final determination in November 2018.

Further information about the application for authorisation, including copies of the ACCC’s draft determination and public submissions, is available at SA Housing Authority and Renewal SA.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Authorisation is sought as the proposed conduct may contain a cartel provision.

Background

SA Housing Authority and Renewal SA, and land and property developers may be considered competitors for the supply of affordable housing.

Therefore, by arranging to cap prices and not compete for the supply of rentals and the sale of properties, they risk breaching competition laws unless they have ACCC authorisation.

Beware scammers wanting access to your computer and bank account

The ACCC says that scammers are increasingly catching out people by impersonating well-known businesses or the police so they can get access to computers and steal money or banking information.

The ACCC’s Scamwatch website has recorded a significant spike in these types of scams, known as remote access scams, with more than 8000 reports recorded in 2018 so far and losses totalling $4.4 million.

“The spike in remote access scams is very concerning; losses so far in 2018 have already surpassed those for the whole of 2017, and sadly it is older Australians that are losing the most money,” ACCC Deputy Chair Delia Rickard said.

Scammers will impersonate a well-known company, most commonly Telstra, NBN or Microsoft, or even the police, and spin you a very credible and believable story about why they need to access your computer using software such as TeamViewer.

“The scammers are becoming more sophisticated. The old trick scammers used to use was to call people and say there was a virus on their computer that needed fixing but, in a new twist, scammers are now telling people they need their help to catch hackers,” Ms Rickard said.

The scammers claim they are tracking the ‘scammers’ or ‘hackers’, and tell the consumer that their computer has been compromised and is being used to send scam messages. This is where they say with the victim’s help, they can use the victim’s computer and online banking to trap the (fake) ‘scammer’.

The scammer will then pretend to deposit money into their victim’s account. In reality the scammer just shuffles money between the victim’s accounts (for example, from a person’s credit card account to a savings account), which gives the illusion of money being deposited. The money is then sent out of the victim’s account as part of the con to ‘catch a scammer’, straight to the scammer’s own bank accounts.

“Unfortunately there are many stories from people who give a scammer access to their computer and are then conned into giving access to online banking. Some are also tricked into providing iTunes gift card numbers over the phone to these scammers,” Ms Rickard said.

Once the scammer has a victim on the hook, if they start to doubt the situation, the scammer will become threatening, stating that the victim would jeopardise the investigation if they refuse to help and may even face legal consequences.

These types of scam can be very scary, as scammers can become threatening and aggressive if they sense they are ‘losing’ the victim, or starting to cotton on. This is particularly frightening for older people who may not be as tech savvy.

“It’s vital that people remember they should never, ever, give an unsolicited caller access to your computer, and under no circumstances offer your personal, credit card or online account details over the phone,” Ms Rickard.

“If you receive a phone call out of the blue about your computer and remote access is requested, it’s a scam 100 per cent of the time. Just hang up.”

ACCC win puts debt collectors on notice

The ACCC says that the Federal Court has found one of Australia’s largest debt collection firms, ACM Group Ltd, engaged in misleading or deceptive conduct, harassment and coercion, and unconscionable conduct in its dealings with two vulnerable consumers.

ACM’s conduct was found to be in contravention of the Australian Consumer Law.

The ACCC brought the action against ACM in respect of its conduct between 2011 and 2015 in pursuing two vulnerable customers who had defaulted on their phone bills. Their debts had been on-sold by their service provider to ACM for debt recovery.

“The ACCC and ASIC have done extensive work to improve debt collection practices,” ACCC Commissioner Sarah Court said.

“Lower-income groups suffer greater stress because of debt collection practices and have limited access to legal support, while creditors are using improper ways to escalate disputes.”

“This conduct by ACM was particularly egregious, as it included ongoing harassment of a care facility resident who had difficulty communicating after suffering multiple strokes, as well as a Centrelink recipient who was falsely told their credit would be affected for up to seven years if they failed to pay immediately,” Ms Court said.

“ACM was found to have made empty threats to litigate against both customers despite knowing they had no means, or only limited means, to repay.”

“One of the ACCC’s enduring enforcement priorities is taking action against conduct that impacts disadvantaged or vulnerable consumers,” Ms Court said.

In his judgment, Griffiths J rejected a number of explanations of why ACM had contacted one of the consumers 34 times and found that conduct amounted to undue harassment and coercion.

Griffiths J also found that the multiple telephone calls, coupled with the number and content of its correspondence was calculated to intimidate or demoralise the consumer.

Griffiths J stated that “ACM cannot justify its conduct on the basis that it required verification of information about [the] medical or financial circumstances when ACM itself did not take reasonable steps to contact people who may have been in a position to provide such verification”.

Background

The alleged conduct occurred between 2011–2015 in relation to one consumer, a resident in a care facility, and in September 2014 in relation to the other consumer, a single parent with a limited income. In each case, the debt being pursued had been sold to ACM Group by Telstra.

In 2012, in a case brought by ASIC, the Federal Court found that ACM Group had harassed and coerced consumers and engaged in ‘widespread’ and ‘systemic’ misleading and deceptive conduct when seeking to recover money.

In December 2013, the ACCC released ‘Dealing with debt collectors: Your rights and responsibilities’, a guide that helps consumers in trouble with debt understand their options and how to deal with debt collectors and creditors.

In July 2014, the ACCC and ASIC released updated guidelines for debt collection firms regarding their contact with consumers and compliance with the law. The guidelines encourage debt collectors to be flexible, fair and realistic and to recognise debtors who are vulnerable. The industry association for debt buyers, the Australian Collectors & Debt Buyers Association, required its members to accept these guidelines in March 2016.

In 2015, the ACCC released a report into the Australian debt collection industry.

Both the ACCC and ASIC are responsible for consumer protection in the debt collection industry. The two agencies work closely and in this case ASIC delegated its powers to the ACCC to pursue this action.

Beware Investment Wolves Knocking at the Door – ACCC

Scamwatch is warning the Australian community to be wary about investment scams, with statistics revealing Australians are collectively losing $4.3 million a month to these scams.

In 2018, more than $26 million has been reported lost to investment scams—already 84 per cent of the total losses recorded in 2017. This represents an average month on month increase in losses of 117 per cent compared to last year.

“The losses to investment scams are horrific. Each week the ACCC receives heartbreaking accounts of people losing hundreds of thousands, and in some cases millions, of dollars,” ACCC Deputy Chair Delia Rickard said.

“Last year, Australians reported they lost $64.6 million to investment scams to Scamwatch and the Australian Cybercrime Online Reporting Network (ACORN). If the current trend continues, combined losses reported to Scamwatch and ACORN in 2018 could be in excess of $100 million.”

“These scams are very sophisticated and the scammers are very convincing. People aged 45–64 are most at risk and make up more than half the reports sent to Scamwatch,” Ms Rickard said.

 

The vast majority of investment scams are still centred on traditional investment markets like stocks, real estate or commodities. For example, scammers will cold call victims claiming to be a stock broker or investment portfolio manager and offer a ‘hot tip’ or inside information on a stock or asset that is supposedly about to go up significantly in value. They will claim what they are offering is low-risk and will provide quick and high returns.

“Scammers will spend significant time and effort grooming their victims to invest. They will use the right technical language and also offer professional looking websites and documents to convince victims they are legitimate. It’s often only when people try to cash out their investment that they realise their money is gone,” Ms Rickard said.

Two other types of investments where scams are prevalent are cryptocurrency trading and binary options. Cryptocurrency trading scams have grown significantly in the past 12 months and are now the second most common type of investment scam offer pushed on victims.

“The rise in popularity in cryptocurrency trading has not been missed by scammers who are latching onto this new trend to con people. These are similar to any other investment scam: the scammer will claim to have inside knowledge about price movements they will use to make you a fortune. If you invest, your money will quickly disappear,” Ms Rickard said.

“Binary options trading involves scammers pretending they can predict the movements of a commodity, asset or index prices over a short time. They direct you to a website with a login, account details and a trading platform. They appear to put your money into the account and demonstrate a number of successful trades to encourage you to invest greater sums. Then your money begins to disappear and so too does the scammer.”

The clearest warning sign you’re dealing an investment scammer is how they contact you and the promises they make.

“It can be very difficult to tell what is and isn’t legitimate these days. If someone calls, emails or texts you out of the blue with investment advice, don’t engage with them no matter how legitimate they sound. Hang up the phone, or delete the email or text. If you’re searching for new investment opportunities online, don’t always trust what you read. It’s easy for scammers to create professional looking investment websites,” Ms Rickard said.

“Any claims like ‘risk-free investment’, ‘low risk, high return’, ‘be a millionaire in three years’, or ‘get-rich quick’ are also easy tells that you’re dealing with a scammer.”

“If you are keen to invest, start by visiting ASIC’s MoneySmart website (link is external). This a fantastic resource that explains the steps you should take before committing to an investment and how to avoid scammers. Always check ASIC’s list of companies you should not deal with (link is external) before you invest,” Ms Rickard said.

Consumers’ right to their own data is on its way

Good on the ACCC. Someone has our back!

The consumer data right (CDR), which will enable customers to safely share their data with trusted service providers is a fundamental competition and consumer reform, ACCC Chair Rod Sims said in a speech at the Consumer Policy Research Centre’s Consumer Data Conference in Melbourne today.

The ACCC will have the lead role in turning the concept of a consumer data right into a reality, including rule-making, consumer education and, eventually, enforcement.

“The consumer data right is essentially a data portability right,” Mr Sims said.

“We believe it will enable consumers to actually benefit greatly from the data that businesses already hold about them.”

Using banking, the first industry to be designated under the CDR as an example, Mr Sims explained how existing customer data held by banks can benefit homeowners.

“It is often difficult and costly for borrowers to compare the offers of mortgage providers,” Mr Sims said.

Under the CDR, “banks will make some data, such as customers’ transaction details, available to the customer or the customer’s chosen data recipient.”

“Consumer data rights will reduce the cost to borrowers of discovering and comparing offers,” Mr Sims said.

Mr Sims also stressed the importance of privacy and security in developing the CDR.

The agency will work very closely with the Office of the Australian Information Commissioner on privacy matters.

“Robust privacy protection and information security will be a core feature of the CDR,” Mr Sims said.

The data “can only be accessed by trusted parties who have the customer’s consent to access their data.”

The ACCC has created a dedicated Consumer Data Right Branch and work is already underway with a framework paper on the data rules expected for public consultation in August.

“We will also conduct consultation work with consumers and businesses,” Mr Sims said.

A copy of the speech is available at Consumer data and regulatory reform.

Why Do Companies Behave Badly?

ACCC Chair Rod Sims delivered the Giblin Lecture in Tasmania, and shared his observations on company behaviour that drives breaches of Australia’s competition and consumer laws. The speech is excellent and worth reading as it gets to the heart of why so many companies are behaving poorly, and on an ongoing basis. Many, he says, puts immediate profit ahead of their customers.

He walk through a whole series of bad company behaviour, and recounted the famous Adam Smith quote:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

“Few companies behave badly often, but rather many engage in occasional significant instances of bad behaviour, which remains unacceptable.”

“It is often said that companies succeed by looking after the needs of their customers. I have been surprised over very many years, however, at the way in which many businesses often do precisely the opposite.”

“Companies appear to put immediate profit ahead of their customers either by engaging in misleading or unfair conduct, or even unconscionable conduct towards their customers, or they engage in cartel or other anti-competitive activity that raises prices for their customers.“

“Too many large companies continue to mislead their customers, or treat them unconscionably. And it is not just customers who are subjected to bad behaviour from big companies. More recently, the ACCC has been taking action over unfair contract terms imposed on small businesses.”

“On the competition side we have seen a range of cartel behaviours; where competitors agree to raise prices directly or restrict supply to achieve the same result, all of which hurts their own customers.”

“There is clearly no shortage of work for the ACCC. Many well-known and respected major Australian companies have admitted, or been found, to have breached our competition and consumer laws. These same companies regularly proclaim to put their customers first.”

“Being the best at meeting the needs of consumers is not the only, or even the dominant, way firms succeed. Staying ahead of rivals through continual improvement is a difficult task for most companies; eventually someone works out how to do things better and cheaper.”

“In some cases, company executives push the boundaries to achieve short-term growth targets. Some appear to ignore the risk of reputational damage over the longer term to achieve short-term gains.”

“The strongest constraint on firm behaviour is the risk of losing sales. The larger the number of customers that ‘vote with their feet’ in response to poor behaviour by firms, the more firms will do to avoid engaging in such behaviours.”

“Poor behaviour can interfere with the competitive process and cause a ‘race to the bottom’. We have observed firms winning customers through misrepresenting their offers and employing high pressure selling tactics. In addition to hurting consumers, this type of behaviour hurts rival firms.”

“It often appears as if company executives behave differently when they are at work, than the way they would privately, as if they feel their obligations to their company compels them to pursue profit to the maximum, even if their behaviour pushes too close to the boundaries of the law.”

“The market economy is based on incentives. When the incentives for misconduct are strong, and the penalties for misconduct are comparatively weak, it is easy to understand that company boards and senior management do not act strongly enough to ensure such behaviour does not occur.”

“Accordingly, the ACCC strongly encourages the Parliament to approve changes to the Australian Consumer Law, or ACL, bringing increased penalties for contraventions of the ACL. Increasing penalties for contraventions of the Competition and Consumer Act, and the ACL, has long been a priority focus of the Commission.”

“Just imagine if the penalties we have achieved recently were 10–20 times higher. Then perhaps some companies would not be behaving so badly. And then, when they say they put their customers first, it might have more validity than it does today.”