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ACCC caught in the middle

Briefs

Cite as: December 2011 85(12) LIJ, p.12

Unconscionable conduct and the misuse of market power were among the issues discussed by the Australian Competition and Consumer Commission (ACCC) chair, Rod Sims, at an LIV breakfast attended by more than 100 lawyers in October.

Mr Sims told the breakfast audience that these were two of the most challenging sections of the Competition and Consumer Act 2010.

He said despite recent amendments to s46 – which relates to the misuse of market power, establishing s46 cases would still be difficult.

He said the ACCC was waiting for the outcome of a Federal Court case, where the respondents include Cement Australia, Pozzolanic Enterprises and others, which alleges contravention of s46 over an ingredient in ready-mix concrete.

“That decision is likely to provide judicial guidance, and it comes after the amendments made to the Act in the last few years,” Mr Sims said.

He said the ACCC was caught in the middle, with high public expectations on one side, and high legal standards and few successful cases on the other.

“In my view, we still need to resolve the questions around section 46 as it currently stands.”

When it came to unconscionable conduct (s21 and s22), he said the problem lay in the lack of a clear definition of what constituted “unconscionable conduct”.

Despite the complexities, Mr Sims said the unconscionable conduct provisions were an important component of the Act and could be potentially applied to a broader range of circumstances. “For example, in areas such as door to door energy selling, and perhaps even the dealings of major supermarkets with their suppliers.

“We already have a number of cases before the court tackling important issues and making the unconscionable case in different ways,” he added. “You may see more cases that come at these provisions from different angles.”

The regulatory chief also touched on the ACCC’s role when carbon pricing begins in mid 2012.

“I anticipate this subject will occupy the ACCC heavily over the next 12-18 months and, as professional advisers, many of you will be asked about this by your clients,” he told the audience.

The ACCC’s role is to ensure businesses don’t make misleading claims when attributing price increases to the carbon tax and will use substantiation notices – a new power under the Australian Consumer Law – as a preliminary investigative tool.

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