Rod Sims calls for reforms to ‘game-changer’ Competition and Consumer Act

Fresh from a bruising tussle with Google and Facebook, ACCC chief Rod Sims has called for further reforms to the Competition and Consumer Act.

ACCC chairman Rod Sims: ‘For laws to be effective, there must be serious and effective consequences for breaches.’ Picture: Jonathan Ng

Fresh from a bruising multi-year tussle with Google and Facebook, competition tsar Rod Sims has called for further reforms to the Competition and Consumer Act, declaring that the law requires further improvement to ensure it is effectively enforced and that consumers are better protected against unsafe products.

Speaking at a webinar at a ­Monash University National Commercial Law Seminar to mark 10 years since the Competition and Consumer Act was introduced, Mr Sims said the law was a “game changer” that allowed the ACCC and state and territory regulators to better collaborate, but said further work was still needed.

“The key change was the introduction of civil pecuniary penalties for consumer law contra­ventions. These civil pecuniary penalties transformed the ACCC’s armoury when taking enforcement action in the courts against businesses for alleged contraventions of the competition law,” Mr Sims said.

“This in turn has transformed compliance with the consumer law. For laws to be effective, there must be serious and effective consequences for breaches.”

Mr Sims said the Federal Court had imposed a total of almost $400m in civil pecuniary penalties in proceedings instituted by the ACCC in the last 10 years, including the recent Volkswagen and ­Viagogo penalties, which are both currently under appeal.

“The Coles unconscionable conduct case in 2014 represents, in my mind, one of the most important results delivered by the ACCC under the consumer law on behalf of smaller business suppliers,” he said. “Indeed, this was one of the first findings of unconscionable conduct in a business-to-business context under the consumer law.

“In my view Coles’s behaviour was dreadful and needed to be strongly dealt with, and it was.

“That only around $5m in criminal fines was obtained for consumer law breaches prior to this reform says it all.”

Despite having just delivered landmark media and tech reform, Mr Sims added that further law reform was now needed, including a new law that would make a failure to comply with the consumer guarantee and unfair contracts term provisions a contravention of consumer law and subject to penalties.

“It is our view there is a need for an unfair trading practices prohibition as it would remove or avoid the need for some intrusive industry-specific regulation and could help lessen the overall regulatory burden,” Mr Sims said. “We also see a need for a general safety provision to prohibit suppliers from supplying unsafe products.”

Mr Sims also indicated that the ACCC was actively considering reform to the merger control regimen, to ensure competition was not eroded via mergers.

“In recent years we have become increasingly concerned as to whether Australia’s merger control regimen remains fit for purpose and, in particular, whether it is achieving the balance required to ensure good outcomes for consumers and the economy,” he said.

“Our merger control regimen is skewed towards clearance, which presents real challenges for our economy given the damage that can be done by anti-competitive mergers.

“We therefore consider that the approach to merger control needs to be rebalanced. We are currently exploring merger law reform options to bring about this change.

“We all must remember the benefits achieved through harmonisation ten years ago. We need the continued, if not increased, co-operation between jurisdictions to meet the challenges of the present and future.”