The Australian Competition and Consumer Commission (ACCC) is an independent Commonwealth statutory authority whose role is to enforce the Competition and Consumer Act 2010 (Cth) (CCA) and a range of additional legislation, promoting competition and fair trading, and regulating national infrastructure for the benefit of all Australians.

The Commission is the primary decision-making body of the ACCC and comprises six full-time members: the Chair, two Deputy Chairs and three members. Members are appointed by the Governor-General for terms of up to five years, and appointments are made after the majority of state and territory jurisdictions support the selection. Further information on the Commission is provided in Part 4 - Management and accountability of this report.

The Australian Energy Regulator (AER) is Australia’s national energy market regulator. The AER has its own independent Board, comprising two Commonwealth members and three state/territory members. One member is appointed as the Chair and another member is appointed as the Deputy Chair. The Board is supported by employees who are engaged exclusively on energy matters. It also has access to the ACCC’s legal and economic specialists. The AER’s functions are set out in national energy market legislation and rules. Its functions mostly relate to electricity and gas markets in eastern and southern Australia.

While specific functions vary according to the legislated responsibilities that underpin the ACCC and AER, the two bodies share many common objectives, both working to protect, strengthen and supplement competitive market processes.

ACCC Commissioners and AER Board members are statutory officers. ACCC and AER employees are Australian Public Service (APS) employees. Both agencies are within the Treasury portfolio.

Purpose

The ACCC and the AER work in close coordination to achieve our common purpose: making markets work for consumers, now and in the future.

The competition and infrastructure regulation roles of the ACCC and AER should be seen in the context of the thinking that underpins National Competition Policy—that competition provides the best incentive for businesses to become more efficient, innovative and flexible and to operate in the long-term interests of consumers. Where competition is not feasible, effective regulation is required to deliver outcomes in line with those achieved by competitive markets. Together the ACCC and AER champion strong, efficient and effective markets.

Legislative framework

In addition to administering the CCA, the ACCC has responsibilities under many other Acts and rules. The AER regulates under the national energy legislation. The legislation and associated functions and responsibilities are outlined in Appendix 7: Competition and Consumer Act 2010 and other legislation.

Role and functions

For competition to remain healthy, businesses need to operate within the boundaries of acceptable and fair behaviour towards their customers, competitors and suppliers. Those boundaries are set out in the CCA and the other Acts the ACCC enforces. The ACCC’s role is critical in making markets work for consumers now and in the future by:

• maintaining and promoting competition by preventing anti-competitive mergers and cartels,intervening when misuse of market power is identified, and implementing the Consumer Data Right
• protecting the interests and safety of consumers and supporting a fair marketplace—addressing misleading behaviour, removing unsafe goods and tackling unconscionable dealings
• driving efficient infrastructure through industry-specific regulation and access regimes undertaking market studies and inquiries to support competition, consumer and regulatory outcomes.

The AER’s functions as set out in national energy legislation include:

• regulating electricity networks and covered gas pipelines in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks
• enforcing the laws for the National Electricity Market (NEM) and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition
• protecting the interests of household and small business consumers by enforcing the National Energy Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the Australian Capital Territory and Queensland.

Government expectations

The Australian Government has issued a Statement of Expectations for the ACCC. The statement outlines the government’s expectations of the ACCC’s role and responsibilities; its relationship with the government, the responsible minister and the Commonwealth Treasury; issues of transparency and accountability; and organisational governance and financial management. The government states that it is imperative that the ACCC act independently and objectively in performing its functions and exercising its powers as set out in the CCA.

The government’s vision is for the ACCC to be a high-performing and responsive agency that administers a principles-based regulatory framework.

The ACCC provides a Statement of Intent responding to the government’s Statement of Expectations for the ACCC.

The Statement of Expectations and Statement of Intent are available on the ACCC website.

The ACCC also takes on additional roles and responsibilities at the direction of the government, including:

• using inquiry powers to increase transparency in the gas market, including by identifying the use of market power and other obstructions to the efficient supply of gas to households and businesses as part of a wide-ranging inquiry into the supply of and demand for wholesale gas in Australia
• the ACCC’s inquiry into the prices, profits and margins in the supply of electricity in the NEM. The ACCC will report on this every six months until the conclusion of the inquiry in 2025. The ACCC is also responsible for enforcing the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Act 2019 (Cth), which prohibits certain misconduct in electricity markets
• undertaking inquiries into specific competition issues across the financial sector to assess whether competition is sufficient to drive the best outcomes for consumers. This has included inquiries into foreign exchange currency conversion services and home loan pricing
• undertaking an inquiry into the supply of residential building, contents and strata insurance products to consumers in northern Australia. Our inquiry is looking into the industry’s prices, costs and profits to address concerns about the high price of insurance in the region
• undertaking an inquiry into competition in markets for the supply of digital platform services, with particular regard to the concentration of power, the behaviour of suppliers, mergers and acquisitions, barriers to entry or expansion, and changes in the range of services offered by suppliers of digital platform services. The ACCC will provide the Treasurer with interim reports every six months until the inquiry concludes with a final report in 2025. We are also undertaking an inquiry into markets for the supply of digital advertising technology services and digital advertising agency services
• producing industry reports on aspects of consumer interest in the fuel market, including an in-depth petrol report detailing the financial performance of the industry from 2002 to 2018, and preparing quarterly reports on price movements in capital cities and over 190 regional locations across Australia
• undertaking an inquiry into markets for tradeable water rights in the Murray–Darling Basin, including recommending options to enhance their operations, transparency, regulation, competitiveness and efficiency
• monitoring and regularly reporting on the domestic air travel market, particularly in relation to its competitiveness.

As at 30 June 2020 the responsible minister for the ACCC was the Treasurer, the Hon. Josh Frydenberg MP.

In 2019–20 the AER was accountable to the Australian Government and Council of Australian Governments (COAG) Energy Council, which was a ministerial forum responsible for pursuing priority issues of national significance and key reforms in the energy and resources sectors.

On 2 June 2020 the National Cabinet agreed to continue as the forum for first ministers, to form the National Federation Reform Council and to cease COAG. Six National Cabinet Reform Committees (NCRCs) were formed to oversee six initial priority areas of reform, including energy. The NCRC for Energy will take the place of the COAG Energy Council. Specific arrangements for the transition to the new NCRC structure are still under consideration.

To strengthen accountability and performance frameworks, the former COAG Energy Council and the Australian Government have previously issued Statements of Expectations for the AER. The AER responded by providing Statements of Intent to respond to these Statements of Expectations. The most recent Statement of Intent can be found on the AER website. The AER reported against this Statement of Intent to the former COAG Energy Council through the AER Annual Report in December 2019.

Setting priorities

The ACCC cannot pursue all possible breaches of the CCA that come to our attention. The ACCC’s role is to focus on those matters that will, or have the potential to, harm the competitive process or result in widespread consumer or small business detriment. The ACCC exercises discretion to direct resources to matters that provide the greatest overall benefit. To aid the decision-making process, every year the ACCC identifies the compliance and enforcement priorities and the product safety priorities on which we will focus our efforts.

The ACCC’s compliance and enforcement priorities are determined following external consultation and an assessment of existing or emerging issues and their impact on consumer welfare and the competitive process. There are also some forms of conduct that are so detrimental to consumer welfare and the competitive process (for example, cartel conduct) that the ACCC will always regard them as a priority. Our compliance and enforcement priorities are on our website and are discussed further at 2019–20 compliance and enforcement priorities.

Each year the ACCC identifies priorities to minimise the risks posed by unsafe consumer goods. The product safety priorities reflect the ACCC’s role in conducting consumer product safety investigations and surveillance, administering consumer product safety recalls and making recommendations on product safety regulations, including standards and bans. Our product safety priorities, and the principles we use to prioritise and address product safety risks, are on our website.

Outcome and program structure

Under the outcome and program framework as presented in the Portfolio Budget Statement, we have one outcome and two programs:

Outcome: Lawful competition, consumer protection, and regulated national infrastructure markets and services through regulation, including enforcement, education, price monitoring and determining the terms of access to infrastructure services.

Program 1.1: Australian Competition and Consumer Commission: To achieve compliance with the CCA and other legislation to protect, strengthen and supplement the way competition works in Australian markets and industries to improve the efficiency of the economy and to increase the welfare of Australians.

Program 1.2: Australian Energy Regulator: The AER’s priorities and work program are guided by the objectives of national energy legislation and rules. The common objective through the legislation is to promote efficient investment in, and efficient operation and use of, energy services for the long-term interests of end users of energy with respect to price, quality, safety, reliability and security.

The details of the ACCC and AER strategies, deliverables and performance indicators are listed in Part 3 - Annual performance statement.

Commissioners

Australian Energy Regulator

Organisational structure of the ACCC and AER

Figure 2.1: Organisational structure of the ACCC and AER (at 30 June 2020)