You must beware! Considerably higher penalties for infringements of competition and consumer law are planned
Consider commenting by August 29 on the proposed competition and consumer law penalty increases.
As we reported in July, the Labor Government’s ‘Better Competition’ declaration promised to ‘tackle anti-competitive behaviour’ by increasing penalties and creating a new ‘super complaint’ function at the Australian Competition Commission and consumers (ACCC).
A Draft Bill, Treasury Law Amendments (Competition and Consumer Reforms No. 1) Bill 2022: More Competition, Better Prices, accompanied by explanatory documents, has now been published for public consultation.
This draft legislation focuses on part of the Better Competition statement, namely a substantial increase in penalties for anti-competitive behavior under Part IV of the Competition and Consumer Act 2010 (VAC) and the Australian Consumer Law (ACL). Amendments are also proposed to the relevant provisions of Part IVBA (Compulsory News Media and Digital Platforms Trading Code); Part XII (the telecommunications industry); XICA (electricity industry) part of the CCA.
Why are these penalty changes being made?
The intention is to increase the severity of Australia’s sanctions regime and facilitate the imposition of more consistent sanctions in foreign jurisdictions. As we noted earlier, in Europe, companies that violate competition laws can be penalized up to 10% of the worldwide turnover of the entire group of companies during the previous year. . Meanwhile, in the United States, companies can be penalized up to $100 million per violation.
The government wants the price of misconduct to be high enough to deter unfair activity and improve competition, and to deter consumers. By increasing penalties, the intention is to promote competition and better business behavior in Australia, thereby ensuring a strong level of protection for consumers.
The large penalty increases at a glance
The proposed increase in maximum penalties is a very significant increase over existing penalties, but it will not have retroactive application. The new maximum penalty for breaching a relevant offense or civil penalty provision for competition and breaches of consumer law for businesses will be bigger of:
For individuals, there will also be a significant increase in maximum monetary penalties, from $500,000 to $2.5 million.
To make a comment
Interested parties only have until August 25, 2022 to comment on this consultation, so it is important to start determining now whether you support this change to the sanctions regime in Australia.