Competition and Consumer Act and key legislation

Airports Act 1996 (Cth)

Australian Postal Corporation Act 1989 (Cth)

Competition and Consumer Act 2010 (Cth) (CCA)

Competition and Consumer (Consumer Data Right) Rules 2020

National Electricity Law and Rules

National Gas Law and Rules

National Energy Retail Law and Rules

Telecommunications Act 1997 (Cth)

Water Act 2007 (Cth)

Water Market Rules 2009 (Cth)

Water Charge (Termination Fees) Rules 2009 (Cth)

Water Charge (Infrastructure) Rules 2010 (Cth)

Water Charge (Planning and Management Information) Rules 2010 (Cth)

Lawful competition and informed markets

Consumer Data Right

Part IVD of the CCA establishes the Consumer Data Right (CDR) framework and provides the ACCC with a range of functions and powers to implement and administer the Consumer Data Right.

The ACCC’s powers relate to:

• developing and making the Competition and Consumer (Consumer Data Right) Rules 2020 (Cth) (CDR Rules) (Part IVD, Division 2, Subdivisions A and C)
• accreditation of data recipients (Part IVD, Division 3, Subdivisions A, and C)
• establishing and maintaining the CDR Register (Part IVD, Division 3, Subdivisions B and D)
• compliance and enforcement (Part IVD, Division 2, Subdivision B).

Developing and making the CDR Rules

The ACCC is empowered to make rules for the operation of the Consumer Data Right in relation to designated sectors by legislative instrument, with the consent of the responsible minister.¹ The ACCC made the CDR Rules in February 2020. The CDR Rules have general application, with specific rules for the banking sector—the first sector designated by the minister—contained in Schedule 3.

The ACCC can make rules dealing with:²

• the disclosure, collection, use, accuracy, storage, security or deletion of CDR data
• designated gateways for CDR data
• accreditation of data recipients
• reporting, recordkeeping and auditing
• matters incidental or related to any of the above matters.

The rules must require accredited data recipients to delete CDR data on a request from a CDR consumer.

The ACCC must consider certain matters before making the rules, including the likely effect of the rules on the interests of consumers and the privacy and confidentiality of their information, as well as the promotion of competition and data-driven innovation. The ACCC is also required to consult with the public, the Information Commissioner, the primary regulator of a particular designated sector, and any other prescribed person or body. The ACCC undertakes best-practice regulatory processes including Privacy Impact Assessments and Regulatory Impact Assessments for the CDR Rules and amendments to the CDR Rules.

Data Recipient Accreditor

Entities that wish to collect consumer data under the Consumer Data Right must be accredited by the Data Recipient Accreditor. The Data Recipient Accreditor is provided with a number of functions and powers related to this accreditation role by the new Part IVD of the CCA and by the CDR Rules. The Data Recipient Accreditor can accredit an accreditation applicant if satisfied that the applicant meets the accreditation criteria specified in the CDR Rules; impose, vary or remove conditions on an accreditation; and revoke or suspend an accreditation. The CDR Rules also allow the Data Recipient Accreditor to accept the surrender of an accreditation, approve the form in which an accreditation application can be made, consult with other regulators and request further information from applicants.

The ACCC published accreditation guidelines to assist applicants with lodging a valid application to become an accredited person.

Accreditation Registrar

The Accreditation Registrar has a number of functions and powers under Part IVD of the CCA and specified in the CDR Rules. The Registrar must establish and maintain the Register of Accredited Persons.³ Information in the register must be made publicly available by the Registrar as required by the CDR Rules. The CDR Rules also require the Registrar to create and maintain a database of data holders associated with the register. This will contain a list of data holders and associated technical information.

The CDR Rules⁴ give the Registrar additional functions to:

• manage the process of onboarding the accredited data recipients and data holders to the register by requiring them to provide information to be stored in the register that is necessary for the processing of requests for CDR data
• maintain the security, integrity and stability of the register, including undertaking and facilitating testing of accredited data recipients and data holders
• issue requests to data holders and accredited data recipients to do specified things where necessary or convenient in order for the Registrar to exercise its powers or, where this is necessary, to ensure the security, integrity and stability of the register
• inform the Data Recipient Accreditor of any failure of an accredited data recipient to comply with a condition of its accreditation or to do things requested by the Registrar.

CDR compliance and enforcement

There are a range of enforcement options available to respond to and resolve breaches of the CDR legislation (including the privacy safeguards), CDR Rules and data standards. These are detailed below, including enforcement by the Office of the Australian Information Commissioner (OAIC) as co-regulator.

Administrative resolutions

• Accepting a voluntary written commitment from a business to address a non-compliance issue
• Recommending improvements to a CDR participant’s internal practices and procedures (for example, by implementing a compliance program, improving internal operational procedures or ensuring appropriate employee training)
• Monitoring compliance with voluntary commitments

Infringement notices

• Issuing data holders or accredited data recipients with infringement notices if the ACCC considers a breach of a civil penalty provision has occurred⁵

Court enforceable undertakings

• Accepting a formal undertaking (see s. 87B of the CCA) from a CDR participant that it will take or refrain from certain action. For example, an undertaking may include commitments to do an internal audit to ensure that the CDR participant has identified the root cause of a breach and the risk of future breaches is mitigated
• Seeking court orders, including declarations of a breach, injunctions and penalties, if a CDR participant has not complied with an enforceable undertaking

Suspension or revocation of accreditation

• The Data Recipient Accreditor (the ACCC) may suspend or revoke an accredited person’s accreditation status under certain circumstances (see rule 5.17 for details)—for example, if the Data Recipient Accreditor reasonably believes that a revocation or suspension is necessary in order to protect consumers
• An accredited data recipient is prohibited from seeking to collect data while a suspension is in effect

Determination and declarations power (OAIC)

• Making a determination to either dismiss or substantiate a breach of a privacy safeguard or rule relating to the privacy or confidentiality of CDR data, following an investigation
• The determination may include a declaration or order that the CDR participant should not repeat or continue the conduct, should take relevant steps within a specified period to ensure the conduct is ceased, and should redress any loss or damage suffered by consumers, including compensation

Court proceedings

• Initiating legal action for a breach of the legislation (including the privacy safeguards), CDR Rules and/or data standards
• A court can make a range of orders including civil penalties, action to remedy a breach, an injunction to restrain a CDR participant from engaging in the conduct, and orders disqualifying individuals from being directors of corporations
• The ACCC is more likely to initiate court proceeding where the conduct:
  • results, or has the potential to result, in competitive harm or substantial consumer detriment
  • is widespread, such that enforcement action is likely to have a significant deterrent effect
  • involves a CDR participant that has a history of previous breaches of competition, consumer or privacy laws.

Enforcement

The ACCC investigates cartel and other types of anti-competitive conduct—which are illegal for all businesses in Australia.

Court cases

The ACCC takes court action where, after considering all aspects of a matter, we see it as the best way to achieve our enforcement and compliance objectives. We are more likely to litigate where we see the conduct as particularly bad, where we are concerned about likely future behaviour or where the party involved fails to resolve the matter satisfactorily.

The ACCC may refer matters involving alleged criminal cartel offences to the Commonwealth Director of Public Prosecutions for possible criminal prosecution.

For individuals, a cartel offence is punishable by imprisonment for up to 10 years and/or fines up to $420 000 per contravention. Corporations found guilty of a cartel offence may be fined up to $10 million, three times the value of the illegal benefit or, where the benefit cannot be calculated, 10 per cent of the corporate group’s annual Australian sales turnover (whichever is the greater).

In relation to civil cartel prohibitions and other forms of anti-competitive conduct, the ACCC may initiate court action for contraventions of the CCA.

To enforce the civil provisions of the CCA relating to anti-competitive conduct, the ACCC can seek:

• declarations of contraventions
• findings of facts
• injunctions
• damages and compensation
• community service orders
• probation orders
• divestiture orders
• disqualification of a person from managing corporations
• adverse publicity orders
• corrective advertising, public notices and disclosure
• penalties of up to $10 million, three times the value of the illegal benefit or, where the benefit cannot be calculated, 10 per cent of the corporate group’s annual turnover (whichever is the greater) for companies; and $500 000 for individuals.

Enforceable undertakings

The ACCC often resolves alleged breaches of the CCA by accepting court enforceable undertakings from the business involved. In these undertakings, which we record on a public register, the businesses often undertake to:

• make good the harm they have caused
• accept responsibility for their actions
• establish or review and improve their compliance programs and culture.

If necessary, we can take action to enforce the undertaking in the Federal Court of Australia.

We may also accept court enforceable undertakings to address our competition concerns about a proposed merger or acquisition.

The ACCC maintains a public register of enforceable undertakings.

Administrative resolution

In some cases—for example, where we assess the potential risk of harm to competition or consumer detriment from particular conduct as low—we may accept an administrative resolution. Administrative resolutions generally involve the business agreeing to stop the conduct, compensate those who suffered, and take other measures needed to prevent future recurrences.

Education and advice

We believe that preventing a breach of the CCA is better than acting after a breach has occurred. Therefore, the ACCC runs regular educational campaigns to inform and advise consumers and businesses about their rights and obligations under the CCA and to encourage compliance. Our campaigns aim to educate both big and small businesses.

The ACCC publishes targeted and general information, including tips and tools, to encourage businesses to comply with the CCA. We use a wide range of channels to disseminate this information. We also liaise extensively with business, consumer and government agencies about the CCA and our role in its administration.

Mergers

Section 50 of the CCA prohibits mergers and acquisitions that substantially lessen competition in any market in Australia or are likely to do so.

To assist business, the ACCC has an informal clearance process that enables parties who are planning a merger or acquisition to seek the ACCC’s view on whether the proposed transaction is likely to have the effect of substantially lessening competition. Businesses may also apply to the ACCC for an authorisation of a merger or acquisition which, if granted, provides statutory protection from s. 50.

There is no legislation underpinning the informal process; rather, it has developed over time so that merger parties can seek the ACCC’s view before they complete a merger.

The ACCC assesses mergers that come to our attention where they potentially raise concerns under s. 50. These mergers are generally notified by the merger parties via a request for informal clearance. Alternatively, the ACCC may become aware of a proposed or a completed acquisition by monitoring media reports, from complaints or through referrals from Australian and overseas regulators.

We use the information available to us to determine whether a public review is required. Where we are satisfied that there is a low risk of a substantial lessening of competition based on an initial assessment, we may decide that a public review of the merger is unnecessary. These mergers are described as being ‘pre-assessed’. A significant proportion of the mergers we consider are pre-assessed. Clearing mergers by pre-assessment enables the ACCC to respond quickly where there are no substantive competition concerns.

Mergers can be pre-assessed, without conducting a public review, on the basis of the information from the parties or other information before us. Alternatively, in some non-confidential mergers we may conduct targeted inquiries to help inform the decision.

Where pre-assessment is not considered suitable or possible, the ACCC conducts a public review for non-confidential mergers.

Merger authorisation provides an alternative clearance option to the informal merger review process. In order to grant merger authorisation, the ACCC must be satisfied that either:

• the proposed acquisition would not be likely to substantially lessen competition, or
• the likely public benefit from the proposed acquisition outweighs the likely public detriment, including any lessening of competition.

The ACCC’s power to grant merger authorisation is limited to proposed acquisitions.

While a merger authorisation is in force, the authorised parties will be able to acquire the relevant shares or assets without the risk of the ACCC or third parties taking legal action for a contravention of s. 50 of the CCA.

Non-merger authorisations and notifications

The CCA primarily aims to prevent conduct that damages or is likely to damage competition. However, if markets are not working efficiently and they are failing to maximise welfare, some restrictions on competition may be allowed in the public interest.

Authorisation provides businesses with statutory protection from legal action to engage in potentially anti-competitive arrangements.

The authorisation process recognises that, in certain circumstances, particular conduct may not harm competition or may give rise to benefits to the public that outweigh the public detriment.

The ACCC may, if the authorisation test is met, grant authorisation to conduct to which one or more provisions in Part IV of the CCA would or might apply, including:

• contracts, arrangements, understandings or concerted practices that have the purpose, effect or likely effect of substantially lessening competition
• anti-competitive arrangements, including cartel provisions (such as price fixing, controlling output, sharing markets or collective bargaining)
• secondary boycotts (where two or more parties prevent a third party such as a potential customer or supplier from doing business with a target)
• conduct that may be considered to fall within the misuse of market power provisions
• exclusive dealing (where a person trading with another imposes restrictions on the other’s freedom to choose with whom, in what or where they deal)
• resale price maintenance (where the supplier specifies a minimum price below which goods or services may not be resold)
• dual-listed company arrangements that affect competition.

The legal test that the ACCC must apply when assessing an application for authorisation depends upon the conduct for which authorisation is sought.

For conduct that is prohibited outright (such as cartel conduct), the ACCC may grant authorisation if it is satisfied that the likely public benefit from the conduct outweighs the likely public detriment.

For other conduct, the ACCC may grant authorisation if it is satisfied that either:

• the conduct would not be likely to substantially lessen competition, or
• the likely public benefit from the conduct outweighs the likely public detriment.

As an alternative to authorisation, the CCA allows parties to obtain statutory protection from legal action under the notification regime in relation to exclusive dealing, certain collective bargaining and collective boycott arrangements, and resale price maintenance. In some cases the notification process can be faster than seeking authorisation, but it is not available for all types of conduct.

For exclusive dealing notifications, the ACCC will assess whether the notified conduct:

• has the purpose, effect or likely effect of substantially lessening competition, and
• if so, will result in a likely public benefit that would outweigh the likely public detriment.

For collective bargaining and resale price maintenance notifications, the ACCC will assess whether the likely benefit to the public from the conduct will outweigh the likely detriment to the public from the conduct.

Both the notification and authorisation processes are public. The ACCC publishes the applications, public submissions and ACCC decisions on the public register on our website.

Fair trading and consumer protection

Enforcement

To enforce the civil provisions of the CCA (including the Australian Consumer Law) relating to fair trading and consumer protection, the ACCC can seek:

• declarations of contraventions
• findings of facts
• injunctions
• damages and compensation, including for non-party consumers
• community service orders
• probation orders
• disqualification of a person from managing corporations
• adverse publicity orders
• corrective advertising, public notices and disclosure
• penalties of up to $10 million, three times the value of the illegal benefit or, where the benefit cannot be calculated, 10 per cent of the corporate group’s annual turnover (whichever is the greater) for companies; and $500 000 for individuals.

Court enforceable undertakings

To protect consumers and resolve matters under investigation, in appropriate circumstances we can accept court enforceable undertakings, rather than taking litigation.

Under a court enforceable undertaking, a company or an individual will generally agree to:

• remedy the harm caused by the conduct
• accept responsibility for their actions
• establish or review and improve their compliance programs and culture.

Court enforceable undertakings may also include:

• corrective advertising in the print and electronic media
• refunds to affected customers
• community service remedies, such as industry-wide education programs funded by the company providing the undertaking.

Infringement notices

Where we have reasonable grounds to believe that a person has contravened a relevant provision of the CCA but we consider that a resolution is possible without going to court, we can also issue an infringement notice. We may also issue infringement notices in combination with a court enforceable undertaking.

The penalty amount in each infringement notice will vary depending on the alleged contravention, but in most cases for the period of this report, was fixed at $12 600 for a corporation (or $126 000 for a listed corporation) and $2520 for an individual for each alleged contravention.⁶

Administrative resolutions

In some cases—for example, where we assess the potential risk of harm to competition or consumer detriment from particular conduct as low—we may accept an administrative resolution.

Depending on the circumstances, administrative resolutions can range from a commitment by a trader in writing to a signed agreement between the ACCC and a trader setting out detailed conditions.

Administrative resolutions generally involve the trader agreeing to stop the offending conduct, compensate those adversely affected and take other measures necessary to ensure that the conduct does not recur. If a trader reoffends after they have accepted an administrative resolution, we are likely to resolve the new matter differently.

Infrastructure services and markets where competition is limited

Regulation

The ACCC and AER regulate access to monopoly infrastructure services and the price for that access where there is no or limited competition.

The ACCC has regulatory responsibility in relation to a number of key infrastructure services in the economy, including telecommunications, rail, water, fuel, bulk wheat export, postal services, ports and airports. As the infrastructure in each of these sectors is generally provided by one or a small number of suppliers, regulation by the ACCC will promote the economically efficient operation of, use of and investment in Australia’s key infrastructure. The effect of competition and investment will therefore enhance community welfare and promote the long-term interests of Australian consumers.

The AER regulates the electricity and gas industries. The AER promotes the economically efficient operation of, use of and investment in Australia’s key energy infrastructure by setting the amount of revenue that network businesses can recover from customers for using electricity networks and setting the prices that pipeline operators can charge users of fully regulated gas pipelines.

The AER regulates the costs of electricity network services in eastern and southern Australia and electricity networks in the Northern Territory. The AER regulates access prices for covered pipelines in jurisdictions other than Western Australia.

The AER monitors the wholesale electricity and gas markets for compliance with the National Electricity Law and Rules and the National Gas Law and Rules, and takes enforcement action for breaches.

The AER has roles and functions under the National Energy Retail Law and the National Energy Retail Rules in the Australian Capital Territory, Tasmania, South Australia, New South Wales and Queensland. These include authorising retailers to sell energy; administering the national Retailer of Last Resort scheme aimed at protecting customers and the market in the event of retailer failure; monitoring the performance and compliance of energy businesses and taking enforcement action where appropriate; and maintaining a price comparator website (Energy Made Easy) to help residential and small business energy customers choose an energy plan that suits their needs.

The AER and ACCC also have roles under the Competition and Consumer (Industry Code— Electricity Retail) Regulations 2019. The AER, through the Default Market Offer, sets price caps for standing offers for retail electricity supply in certain distribution zones in Australia. The ACCC has enforcement responsibility for compliance with the code, which includes additional controls over the advertising and presentation of discounts for market offers in relation to retail electricity supply.

The ACCC also has a role in enforcing Part XICA of the CCA, introduced by the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Act 2019 (Cth), which came into effect on 10 June 2020.