Australian Competition and Consumer Commission
From Free net encyclopedia
The Australian Competition and Consumer Commission (ACCC), formerly known as the Australian Trade Practices Commission (TPC), is an independent Australian commonwealth government authority established in 1995 to protect consumer rights, business rights and obligations, perform industry regulation and price monitoring and prevent unauthorised anti-competitive behaviour. The ACCC administers the Trade Practices Act 1974 (Cth), more commonly known as the TPA.
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Roles
The ACCC wields a substantial amount of power in the Australian commercial realm. It has legislative and judicial power to enforce a broad range of anti-competitive commercial issues, including powers to counter price fixing cartels, misuse of market power and refusal to supply. On its consumer protection side, it has the power to investigate and litigate undue harassment in debt collection and misleading or deceptive claims in advertising.
An adjunct to its enforcement role is its role in educating would-be franchisors and franchisees of their rights and responsibilities. This flows in some respects from the fact that franchising cases often come to the ACCC as a result of misleading or deceptive conduct by the franchisor in selling the franchise, in breach of the consumer protection provisions of the TPA. The ACCC is also able to bring actions for breaches of the mandatory franchising code of conduct.
The ACCC reviews mergers to ensure they do not substantially lessen competition, in the event that they do, the ACCC does not allow the merger to occur. In reality, this equates to a very small number of mergers which are disallowed each year (usually less than 5), although the ones that do get disallowed are high profile and generate a fair amount of publicity.
The ACCC also has a role in energy regulation. In 2005, the section of the ACCC responsible for economic energy regulation was hived off and formed into a separate legal entity called the Australian Energy Regulator (AER). While it is still considered to be a part of the ACCC, it is physically and legally distinct from the ACCC.
Restrictive Trade Practices
In most cases the spirit of the act, and thus the actions of the ACCC, favours neither consumer nor supplier, but strives to achieve a competitive market without artificial restrictions. For example, refusal of supply, a producer refusing to supply a potential retailer or customer with a product is not itself illegal unless the action would have an anti-competitive effect on the market as a whole. Conversely, practices that are invariably anti-competitive are always illegal, such as price fixing.
Penalties
Penalties for non-compliance of the TPA can be quite severe, and the ACCC is vigorous in bringing court actions against companies that breach the TPA, that may result in these penalties being imposed. Companies that do not comply with the restrictive trade practices provisions of the TPA may be fined up to AU$10,000,000, and individuals may be fined up to AU$500,000. The ACCC also has powers to enforce restitutive actions on the affected parties. For example, companies are frequently forced to publish retractions of false advertising claims in national newspapers and at their places of business. Companies found in breach of the TPA are usually bound to implement a compliance program to ensure future compliance with the act.
Although the penalties permitted by the Trade Practices Act are quite severe, there has been a reluctance by the courts to impose the maximum penalty. There has been a move recently to make certain offences under competition law (such as price fixing or participation in a cartel) into criminal offences rather than purely civil breaches. It is generally thought that the possibility of being found guilty of a criminal offence -- and the possibility of a custodial sentence for executives involved -- will provide a much stronger deterrent to anti-competitive behaviour.
Consumer Confidence
The ACCC is regarded by many Australians as necessary but often ineffective. Whilst it is acknowledged that the ACCC is required and does help safeguard consumer rights, public perception of the organisation regards it as "all-talk-no-action". This perception is most likely the result of an inherent difficulty in obtaining enough evidence to sufficiently prove many corporate wrongdoings.
Former chairman Allan Fels was colloquially known by some commentators during his tenure as "Mr. Mirror" - a slang reference to for "I'll look into it" (referring to the way the ACCC is seen to do a lot of investigating and threatening but not much prosecuting). Nevertheless, Fels was heavily criticised by the business community for overzealousness and, since retiring from the Commission, has entrenched his reputation as a darling of the consumer movement, and one of its elder statesmen. The ACCC's years under Fels are sometimes referred to as its 'Golden Age'. Two other commissioners that might be described as activist, Allan Asher and Sitesh Bhojani, retired at around the same time as Fels, and the ACCC is said to have become more conservative and risk-averse in recent years.
Recently the ACCC has exercised its authority in a number of retail areas, including fining retailer Target (an offshoot of Coles Myer) for false advertising and Woolworths (or Safeway in Victoria) for illegally fixing the price of bread. Despite these very public prosecutions, public perception of the ACCC has changed very little.