Mackay Chapman July 2024 ACCC Update

In this month’s ACCC update:

• Consumers Lack Visibility and Choice Over Data Collection Practices;
• Industry to Continue Collaborating on Cash Transit Arrangements;
• Scammers Claiming to Fix Technical Issues as Losses Spike;
• ACCC Welcomes Proposal for Stronger Merger Laws; and
• Sigma and Chemist Warehouse's Proposed Merger Raises Competition Concerns.

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Consumers Lack Visibility and Choice Over Data Collection Practices‍

A new report by the ACCC highlights a growing concern: consumers are largely unaware of the extent to which their data is collected, used, and shared by businesses. This data is used to create products and services for various purposes, including targeted advertising and risk management.

The crux of the issue lies in consumers' lack of control. Long and complex privacy policies make it difficult to understand exactly what data is being collected and how it's being used. This is concerning because data collection practices often go beyond what consumers expect.

The ACCC is particularly worried about vulnerable consumers being identified and targeted based on data categorization. For instance, a data segment  of "frequent gamblers" could be used to advertise gambling products to those struggling with addiction.

To address these issues, the ACCC reiterates its support for reforms that strengthen privacy laws and introduce a ban on unfair trading practices. The report also raises a potential competition concern: data firms might restrict access to valuable data sets, harming competition in certain industries.

This is the eighth report in a five-year inquiry into digital platform services. The ACCC has previously recommended a new regulatory framework to address these concerns, including mandatory codes of conduct and stronger consumer protections against scams and misleading information.

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‍Industry to Continue Collaborating on Cash Transit Arrangements

Australia's cash distribution network is facing challenges, according to Armaguard, a major supplier in the industry. To address this, the ACCC has granted authorisation with conditions to various industry players, including banks, retailers and the ABA, allowing them to collaborate on solutions.

This authorisation is temporary, expiring in October 2024, and only permits discussions and preliminary agreements. The ACCC emphasises ensuring initiatives consider maintaining cash access in remote areas, where cash use is higher and options are limited.

This is not the first ACCC action related to cash distribution. Previously, the ACCC granted interim authorisation for discussions on contingency plans in case of cash supply disruptions. The ACCC also approved the merger of Linfox Armaguard and Prosegur Australia in June 2023.

It's important to note that the ACCC's role is to assess competition concerns and grant exemptions if collaboration benefits outweigh drawbacks. They are not involved in funding or business continuity arrangements.

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‍Scammers Claiming to Fix Technical Issues as Losses Spike

There's been a surge in remote access scams targeting Australians, with reported losses jumping significantly in the first quarter of 2024. Scammers are impersonating well-known companies like Microsoft and tricking people into downloading software that grants them access to bank accounts.

The ACCC warns that these scammers sound professional and pressure victims into downloading screen sharing apps like AnyDesk or Teamviewer. Once they have access, they can steal your money directly from your bank accounts.

Here's how to protect yourself:

• Never download software over the phone: No legitimate company will ask you to do this.
• Don't share personal information: This includes banking information, passwords, and security codes.
• Be cautious of unsolicited calls: If someone calls you about a problem with your computer or account, hang up. Verify any issues by contacting the company directly using a trusted phone number.
• Report scams: If you've been targeted by a scam, report it to Scamwatch.

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ACCC Welcomes Proposal for Stronger Merger Laws

The ACCC is applauding the government's decision to strengthen the country's merger laws. These changes aim to bring Australia in line with other developed economies.

Currently, Australian businesses don't need to notify the ACCC before merging. The new laws will introduce mandatory notification for deals exceeding a certain size, ensuring the ACCC can assess potential anti-competitive effects before they occur. Additionally, mergers won't be allowed to proceed without ACCC or tribunal approval.

The reforms also address the issue of "serial acquisitions," where multiple smaller mergers over time can significantly harm competition.

The ACCC also welcomes the appointment of Dr. Philip Williams, a prominent economist, as a commissioner.  They value his expertise in competition law and economics.

Finally, the Treasurer announced a new Statement of Expectations (SOE) outlining the government's priorities for the ACCC. This includes promoting competition, innovation, and well-functioning markets that benefit consumers.  The ACCC has responded with a Statement of Intent outlining how they will meet these expectations.

More information can be found here.

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Sigma and Chemist Warehouse's Proposed Merger Raises Competition Concerns

The ACCC has raised concerns about a proposed merger between Sigma Healthcare and Chemist Warehouse. Sigma is a major wholesaler to pharmacies, while Chemist Warehouse is a large pharmacy chain.

The ACCC worries that the combined company would have too much power in the market. This could lead to higher prices for consumers and fewer choices for pharmacies.

Here are some of the specific concerns:

• Less competition: Since Sigma supplies many independent pharmacies that compete with Chemist Warehouse, the merger could reduce competition overall.
• Data advantage: Chemist Warehouse might gain access to sensitive data about pharmacies Sigma supplies, giving them an unfair advantage.
• Unfair treatment of independent pharmacies: The merged company might favour Chemist Warehouse stores over independent pharmacies supplied by Sigma.
• Impact on suppliers: The merger could harm suppliers, especially those who compete with Chemist Warehouse's own brands.

The ACCC is inviting public feedback on the proposed merger before making a final decision. Read more here.

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The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.