Overview

The Australian Competition and Consumer Commission (ACCC) administers, enforces and ensures compliance with the Competition and Consumer Act 2010 (CCA), including the Australian Consumer Law (ACL). This work enhances the welfare of Australians by promoting competition and fair trading, and protecting consumers from unfair business practices. The ACCC and Australian Energy Regulator (AER) also regulate national infrastructure services and other markets where there is limited competition and natural monopoly characteristics.

The ACCC obtained a penalty of $1.25 million in Federal Court proceedings against Harvey Norman Holdings for two separate incidents of misleading advertising in catalogues it distributed. This included representations in September 2010 that created a misleading and deceptive impression that consumers in all places where the catalogue was distributed could buy and use a 3D television to watch the 2010 AFL and NRL grand finals in 3D format. Harvey Norman consented to further remedies in the form of declarations, injunctions and corrective advertising.

Judgment was delivered in proceedings against three construction companies in Queensland for illegal ‘cover pricing’ relating to tenders for state and local government projects. The ACCC was successful in obtaining penalties of $1.3 million against the three companies and another $80 000 against two individuals who were knowingly concerned in the conduct. Cover pricing is a form of anti-competitive conduct that creates false signals as to the price of a building works project and the level of competition for those works.

Korean Airlines became the eighth international airline to settle proceedings against it for a cartel to fix prices in relation to the carriage of air freight. The ACCC obtained a penalty of $5.5 million, injunctions and costs.

Ticketek was penalised $2.5 million for misusing its market power by engaging in conduct with the anti- competitive purpose of preventing Lasttix from supplying its ticketing and promotional services.

The ACCC released the ‘Carbon Price Claims Guide for Business’ to assist business understand their rights and obligations when making claims about the impact of a carbon price. The guide provides initial assistance to businesses preparing for the implementation of the Carbon Pricing Mechanism. The ACCC will continue to engage with the business community and will develop further guidance for consumers and industry.

In collaboration with ACL state and territory regulators, the ACCC achieved good outcomes for consumers through negotiation with Qantas airways. Qantas extended its offer of refunds and compensation for reasonable losses to any consumer that was affected by the grounding of its fleet in October.

Following concern that high concentrations of peroxides used in the teeth whitener products resulted in gum and mouth chemical burns, the ACCC took action to notify suppliers that products with high concentrations of peroxide should not be supplied to consumers. After negotiation with nine suppliers, 22 home use teeth
whitening products were recalled from the marketplace. The ACCC is continuing to negotiate voluntary recalls of the remaining unsafe teeth whiteners.

Major merger matters decided during the December 2011 quarter included:

• Commonwealth Bank of Australia proposed acquisition of Count Financial—the ACCC did not oppose
• Arrow Energy Holdings Pty Ltd proposed acquisition of Bow Energy Limited—the ACCC did not oppose
• Woolworths Limited completed acquisition of Graystanes Shopping Centre—the ACCC did not oppose

In its adjudication role, the ACCC granted a final authorisation in respect of an alliance between Virgin Australia and Singapore Airlines for a period of five years.

Structural reform of the telecommunications sector continued to be an area of significant focus for the ACCC in the December quarter.

The ACCC issued a notice to revoke authorisation given to Football Queensland in April 2008 for exclusive dealing in relation to its ‘Teamwear’ apparel and equipment licensing program. This decision was reached after submissions to the ACCC revealed that the proposed benefits did not outweigh the detriment of the anti-competitive conduct.

The ACCC is currently assessing an application from NBN Co to authorise an agreement with SingTel Optus to migrate Optus’ high-fibre coaxial subscribers to the national broadband network.
 
The ACCC’s regulatory activities during the December 2011 quarter included the commencement of public consultation on NBN Co’s special access undertaking and the issuing of a discussion paper in relation to Telstra’s revised structural separation undertaking. Final decisions on both of these matters are scheduled for release in early 2012.

In a related matter, the ACCC released draft guidelines on the non-discrimination provisions contained in Part XIC of the CCA. As part of the National Broadband Network reforms, NBN Co and other providers of superfast telecommunications services are prohibited from discriminating between their customers, except in limited circumstances.

The AER released a number of decisions including the final decision for the Advanced Metering Infrastructure (or ‘smart meter’) roll-out in Victoria from 2012.

A plan and Statement of Approach was also released for a new national Retailer of Last Resort (RoLR) framework under the National Energy Retail Law, designed to ensure that in the event of retailer failure, arrangements are in place to ensure that customers continue to receive electricity and/or gas supply. To support these functions, the Law provides wide ranging functions and powers to the AER to oversee the RoLR scheme.

During the December quarter the ACCC received an application for accreditation from the Essential Services Commission of Victoria to approve or determine rural water infrastructure charges levied by Goulburn-Murray Water and Lower Murray Water.

The ACCC released its latest petrol monitoring report in December. Key findings of the report included: that Australian retail petrol prices closely followed the international benchmark prices of refined petrol; and that structural changes to the petrol industry continued, including an increased share of refined petroleum product imports by independent operators.