Mackay Chapman October 2024 ACCC Update

In this month’s ACCC update:

• Woolworths and Coles sued over misleading pricing claims;
• Energy Australia fined $14 million for misleading consumers;
• ACCC authorises collaboration for cash-in-transit services;
• Honda penalised for breach of information sharing scheme;
• ACCC authorises accreditation scheme by Victorian Electricity Distributors;
• Updated guidelines on interim authorisation process;
• ACCC will not oppose Optus and TPG regional mobile network sharing; and
• Stronger penalties and enforcement powers against telcos breaching the law.

Woolworths and Coles Sued Over Misleading Pricing Claims

The ACCC has filed separate lawsuits against Woolworths and Coles, alleging breaches of the Australian Consumer Law through misleading discount claims on numerous products.

• Misleading Promotions: Both retailers misrepresented their "Prices Dropped" and "Down Down" promotions, with prices often higher than previous regular prices.

• Planned Price Hikes: Woolworths and Coles allegedly raised prices by at least 15% before promoting products at supposed discounts.

Examples:

Woolworths: Allegedly misled consumers on 266 products, like the Oreo Family Pack, which increased from $3.50 to $5.00 before being promoted to $4.50.

Coles: Misrepresented 245 products, such as Strepsils Throat Lozenges, which rose from $5.50 to $7.00 and were then advertised at $6.00.

The ACCC seeks financial penalties and community service orders requiring both supermarkets to support meal delivery programs for those in need.

No collusion between the companies is alleged.

Consumer complaints and social media monitoring prompted this investigation and it is separate to a broader inquiry into supermarket pricing practices commenced in January 2024. 

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EnergyAustralia Fined $14 Million for Misleading Consumers

The Federal Court has fined EnergyAustralia $14 million for misleading statements about electricity prices and breaching the Electricity Retail Code. 

The company misled around 566,000 consumers between June and September 2022 by failing to provide accurate pricing information. The ACCC noted this conduct hindered consumers' ability to make informed choices during rising prices. EnergyAustralia is also required to review its compliance program and cover the ACCC's costs. 

This case is the ACCC's first court action related to breaches of the Code since its introduction in 2019.

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ACCC Authorises Collaboration for Cash-in-Transit Services

The ACCC has authorised the Australian Banking Association (ABA), member banks, Australia Post, and other industry participants to collaborate on cash-in-transit services to ensure continuity during potential disruptions. 

This collaboration will help establish safeguards for businesses and consumers in the event of service interruptions.

The authorisation requires regular reporting to the ACCC regarding industry consultations. Additionally, the ACCC granted interim authorisation for the ABA and banks to provide financial contributions to Armaguard and discuss operational sustainability, with conditions for transparency.

This decision aims to maintain cash access, particularly in remote areas where banking services are limited, ensuring that consumers and businesses can continue to rely on cash-in-transit services.

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Honda Penalised for Breach of Information Sharing Scheme

Honda Australia has paid an $18,780 penalty after the ACCC issued an infringement notice for allegedly breaching the Motor Vehicle Service and Repair Information Sharing Scheme (MVIS scheme). This scheme aims to provide independent repairers with access to essential diagnostic software and technical information.

The ACCC claims that from July 1, 2022, to May 6, 2024, Honda only offered its diagnostic software through yearly subscriptions, failing to provide daily or monthly access options. Acting ACCC Chair Catriona Lowe emphasised the importance of flexibility for independent repairers, stating that various access periods help foster competition and lower prices for consumers.

This enforcement action marks the ACCC's first regarding the MVIS scheme, indicating ongoing scrutiny in this sector. In serious cases, non-compliance could lead to penalties of up to $10 million per breach. The ACCC plans to release updated guidance on the MVIS scheme in the coming months.

Further details about the scheme and Honda's obligations are available on the ACCC website.

Payment of an infringement notice is not an admission of contravention of the law.

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ACCC Authorises Accreditation Scheme by Victorian Electricity Distributors

The ACCC has authorised Victoria’s five Electricity Distribution Network Service Providers (AusNet Electricity Services, Citipower, Jemena Electricity Networks (Vic), Powercor Australia, and United Energy Distribution) to continue their accreditation scheme for civil contractors involved in underground works with electrical infrastructure assets.

An interim authorisation was granted on 8 May 2024 to prevent disruption to the industry while awaiting the final decision. On 17 July 2024, the ACCC proposed a 10-year authorisation, which was formally issued on 11 September 2024. The interim authorisation will remain effective until the final determination is implemented.

For more details, visit the ACCC’s public register.

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ACCC Publishes Updated Guidelines on Interim Authorisation Process

The ACCC has released updated guidelines for authorising non-merger conduct, clarifying expectations regarding interim authorisation requests and decisions. Under certain conditions, interim authorisation allows conduct to proceed before a thorough assessment of an authorisation application. Key factors the ACCC considers include potential impacts on competition, urgency, and possible harms or benefits to parties involved.

To secure interim authorisation, the proposed conduct must be clearly defined and may differ from that for which final authorisation is sought. Requests must present compelling reasons for the need for interim authorisation. The timing of decisions will depend on the specific circumstances, with quick approvals possible in exceptional cases. However, last-minute applications or marketing deadlines are typically insufficient grounds for expedited authorisation.

The guidelines also address applications related to national emergencies and recognise the role of interim authorisation in urgent sustainability collaborations. The ACCC is currently reviewing feedback on its draft guide for sustainability collaborations, which will inform the final version, including aspects of interim authorisation.

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ACCC Will Not Oppose Optus and TPG Regional Mobile Network Sharing

The ACCC has decided not to oppose the regional mobile network and spectrum-sharing agreements between Optus Mobile Pty Ltd and TPG Telecom Limited. These agreements will enhance mobile services in specific regional areas, allowing Optus to use certain TPG spectrum while providing network services to TPG. TPG will decommission most of its sites in these regions, transferring some to Optus.

The ACCC evaluated the impact on competition, concluding that the agreements are unlikely to substantially lessen competition. ACCC Commissioner Dr Philip Williams stated that the arrangement will improve TPG’s coverage, enhance its competitive ability, and provide more options for consumers.

With TPG having significantly less infrastructure compared to competitors like Telstra and Optus, the agreements are expected to lead to greater service improvements than TPG could achieve alone. While the ACCC has no immediate competition concerns, it will continue to monitor the evolving mobile market structure. 

The agreements involve a Multi-Operator Core Network (MOCN) arrangement with an initial term of 11 years and a five-year extension option, facilitating better mobile services for about 17 per cent of Australia’s population.

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Stronger Penalties and Enforcement Powers Against Telcos Breaching the Law

The ACCC has issued new guidelines regarding its approach to enforcing compliance with the carrier separation rules under the Telecommunications Act. Following recent legislative changes, the ACCC now has the authority to issue infringement notices to network operators and intermediaries that fail to comply with these rules, with penalties increased to a maximum of $10 million per contravention in serious cases.

The carrier separation rules mandate that superfast network operators operate on a wholesale-only basis unless they obtain an exemption. This aims to enhance retail competition and consumer choice in the fixed-line broadband market. The ACCC is committed to ensuring compliance, as violations could involve network operators favouring their retail operations over competitors.

The updated guidelines enable the ACCC to act swiftly against non-compliance, although it will also pursue serious breaches through the Federal Court when necessary. This enforcement strategy is crucial for maintaining effective retail competition in broadband services across Australia.

For further details, the guidelines are available on the ACCC's website.

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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.