ACCC 2014 compliance and enforcement policy promises action on drip pricing

The Australian Competition and Consumer Commission has released its 2014 Compliance and Enforcement Policy. The policy outlines the ACCC’s priority areas for the year and sets out the factors to be taken into account when deciding whether to pursue matters.


Launching the policy a Committee for Economic Development of Australia (CEDA) in Sydney, ACCC Chairman Rod Sims said a strategic review confirmed many previously identified priorities and added some new areas.

“Each year the ACCC focusses upon new and emerging issues. In 2014, this includes misleading promotions in retail energy plans; protecting consumers’ extended warranties rights, disruption of scams that rely on building deceptive relationships, and complexity and unfairness in consumer or small business contracts.”

“Anyone who has gone online to buy an airfare or ticket to the football will be aware of ‘drip pricing’,” Mr Sims said.

“Consumers may see a ‘headline’ price advertised at the beginning of the booking process but when they progress to the payment phase, they find that additional fees and charges have been added.”

“The ACCC is looking to take enforcement action in this area in the near future,” Mr Sims said.

The ACCC has identified nine consumer protection priorities:

  • activity in the telecommunications and energy sectors including door to door selling and telemarketing, with a particular focus on savings representations, also referred to as “discounts off what?”
  • emerging consumer issues in the online marketplace, particularly drip-pricing and comparator websites
  • competition and consumer issues in highly concentrated sectors, in particular in the supermarket and fuel sectors
  • the disruption of scams that rely on building deceptive relationships and which cause severe and widespread consumer or small business detriment
  • complexity and unfairness in consumer or small business contracts
  • credence claims, particularly those with the potential to adversely impact the competitive process and small businesses
  • misleading carbon pricing representations
  • the ACL consumer guarantees regime, particularly in the context of the sale of extended warranties
  • consumer protection issues impacting on Indigenous consumers.

“However, some forms of conduct are so detrimental to consumer welfare and the competitive process that the ACCC will always assess them as a priority such as cartel conduct, anti-competitive agreements and misuse of market power,” Mr Sims said.

“Just like others other forms of anti-competitive conduct, secondary boycotts can be extremely detrimental to businesses, consumers and the competitive process. Where the ACCC becomes aware of possible secondary boycott conduct, it will investigate.”

As Australia’s product safety regulator the ACCC continues to focus on this important area. Among other activities, the ACCC will focus on low cost imported goods sold in our major stores.

In the area of mergers, Mr Sims said that the ACCC expected a number of mergers and acquisitions to raise challenging issues for the ACCC during 2014. He cited the recent David Jones/Myer merger speculation as an example of a matter that would need to be closely reviewed if it were to formally proceed.

In the regulatory side of the ACCC’s activities, Mr Sims said the watchdog would continue its important work in various infrastructure sectors. He pointed to the changing nature of Australia’s telecommunications industry, with the expansion of the NBN, as particular area of focus.

“A highlight of 2014 will be the government’s broad ranging competition review. We need to realise that opening new sectors to competition, and removing barriers to competition, usually sees many new businesses emerge. The threats to established companies are often the opportunities for other, often smaller or even new, companies,” Mr Sims said.

“Competition enlivens existing companies and creates opportunities for others, which drives innovation.  Those with most to lose are established, protected businesses which are unable or unwilling to change; those with most to gain are those who comprise the rest of the Australian economy.”

Photo Credit: Hammonton Photography