ACCCount
A report of the Australian
Competition and Consumer
Commission’s and Australian
Energy Regulator’s activities
1 October to 31 December 2014
Australian Competition and Consumer Commission
23 Marcus Clarke Street, Canberra, Australian Capital Territory 2601
© Commonwealth of Australia 2015
ISBN 978-1-921973-73-4
This work is copyright. Apart from any use permitted by the Copyright Act 1968, no part may be reproduced without prior written
permission from the Commonwealth, available through the Australian Competition and Consumer Commission. Requests and
inquiries concerning reproduction and rights should be addressed to the Director Publishing, Australian Competition and
Consumer Commission, GPO Box 3131, Canberra ACT 2601 or by email to [email protected].
www.accc.gov.au
1
Table of Contents
Overview ............................................................................................................................... 4
1.
Maintaining competition.................................................................................................. 7
Enforcing the CCA for businesses and consumers ......................................................... 7
Competition enforcement ........................................................................................ 7
Proceedings ............................................................................................................ 7
Maintaining competition in concentrated sectors .......................................................... 11
Mergers ............................................................................................................... 11
Remedy market failure ................................................................................................. 15
Authorisations and notifications ............................................................................. 15
2.
Protecting consumers and fair trading .......................................................................... 19
Consumer protection outcomes.................................................................................... 19
Action to protect consumers .................................................................................. 19
Other significant activities ...................................................................................... 30
Product safety ....................................................................................................... 33
3.
Effective Regulation ..................................................................................................... 38
Energy ......................................................................................................................... 38
Decisions and determinations................................................................................ 38
Energy wholesale markets .................................................................................... 41
Energy retail markets ............................................................................................ 43
Telecommunications .................................................................................................... 44
Decisions and determinations................................................................................ 45
Other significant events ......................................................................................... 46
Reports released ................................................................................................... 48
Fuel price monitoring .................................................................................................... 49
New fuel price monitoring direction ........................................................................ 49
Price movements in the September 2014 quarter .................................................. 49
Rail access................................................................................................................... 52
Decisions and determinations................................................................................ 52
Bulk wheat export – access to port terminal services ................................................... 52
Container stevedoring monitoring ................................................................................. 55
Release of the annual Container stevedoring monitoring report ............................ 55
2
Water ........................................................................................................................... 55
Independent Review of the Water Act 2007........................................................... 55
4.
Increasing engagement ................................................................................................ 57
Outcomes from international forums and conferences.................................................. 57
International partnerships and collaboration .......................................................... 57
International cooperation ....................................................................................... 59
Consumer engagement ................................................................................................ 60
Consumer Consultative Committee ....................................................................... 60
Product safety awareness raising .......................................................................... 60
AER Customer Consultative Group ....................................................................... 61
Other stakeholder engagement and consultation undertaken by the AER ............. 62
Business engagement .................................................................................................. 62
Franchising Consultative Committee ..................................................................... 62
Small Business Consultative Committee ............................................................... 62
Industry research................................................................................................... 62
Government liaison ...................................................................................................... 63
Submission to the Department of Infrastructure and Regional Development
Consultation on the Review of the Motor Vehicle Standards Act 1989 Act............. 63
Free range eggs .................................................................................................... 63
Country of origin .................................................................................................... 63
Voluntary Prescribed Grocery Industry Code of Conduct....................................... 64
Unfair contract terms and small business .............................................................. 64
Fuel price boards................................................................................................... 64
Major speeches ............................................................................................................ 64
5.
Appendices .................................................................................................................. 66
Complaints and inquiries .............................................................................................. 66
Enforcement outcomes and matters in court ................................................................ 68
Litigation commenced ........................................................................................... 68
Litigation ongoing .................................................................................................. 70
Litigation concluded............................................................................................... 74
Undertakings accepted and infringement notices paid ........................................... 76
Infringement notices .............................................................................................. 78
3
Overview
1.
The Australian Competition and Consumer Commission (ACCC) and the Australian
Energy Regulator (AER) play an integral role in facilitating and maintaining the
operation of fair, efficient and effective markets in Australia. This has been achieved
through a broad range of activities across the economy in the October to December
2014 quarter.
2.
In October 2014 Ms Paula Conboy commenced as the new Chair of the AER,
following the departure of former Chair Mr Andrew Reeves.
3.
The December 2014 quarter saw strong enforcement outcomes along with action to
improve consumer welfare, protect competition and put a stop to conduct which is
anti-competitive or harmful to Australians. Highlights for the quarter include:
4.

responding to over 59 000 complaints and inquiries from businesses and
consumers

securing over $19 million in penalties for breaches of the Competition and
Consumer Act 2010 (CCA)

commencing eight new civil proceedings in the Federal Court and obtaining four
court enforceable undertakings

receiving payment of $224 400 for four infringement notices under the Australian
Consumer Law (ACL)

a total of 147 product recalls, including further progress on the recall of Infinity
cables, with a second announcement in October of recalls being conducted by
eight further suppliers.
In the December 2014 quarter the Federal Court delivered judgment in eight
proceedings. This included:

penalties totalling $8.3 million against Renegade Gas Pty Ltd,
Speed-E-Gas Pty Ltd, and three current and former senior officers of the two
companies, for engaging in cartel conduct

penalties totalling $10 million against Coles Supermarkets Australia Pty Ltd for
unconscionable conduct in relation to its dealings with its suppliers.
5.
On 20 November 2014 the ACCC instituted proceedings in the Federal Court against
the Construction Forestry Mining and Energy Union (CFMEU), alleging it engaged, or
attempted to engage, in secondary boycott conduct directed at Boral Resources (Vic)
Pty Ltd and Alsafe Premix Concrete Pty Ltd (collectively Boral), in breach of the CCA.
The ACCC is seeking pecuniary penalties, declarations and injunctions against the
CFMEU, Mr Setka and Mr Reardon, as well as publication orders against the
CFMEU.
6.
The ACCC rolled out an educational campaign to inform the franchising sector about
the new Franchising Code of Conduct, which commenced on 1 January 2015. The
campaign included guidance materials, digital advertising to Franchising Information
Network subscribers, an address and webinar delivered by Deputy Chair Dr Michael
Schaper, and presentations by ACCC staff to various forums.
7.
The ACCC continued its Scam Disruption Project (commenced in April 2014) to stop
potential scam victims from sending more money to scammers. So far 1830 letters
have been sent to potential scam victims in NSW and the ACT. Approximately 60 per
4
cent of those receiving the ACCC's warning letters have stopped sending money
overseas for at least a six week period. Just over 80 per cent of the people who
contacted the ACCC after receiving the letter were scam victims. Collectively, these
people had lost $2.4 million, at an average of about $31 000 each.
8.
Significant merger decisions in the quarter included:

the ACCC’s decision not to oppose the proposed clay brick joint venture between
CSR Limited and Boral Limited

the decision not to oppose Elgas Limited’s acquisition of Wesfarmers Kleenheat
Gas Pty Ltd’s east-coast LPG business, following the acceptance of
court-enforceable undertakings.
9.
The ACCC also authorised a number of arrangements in the December 2014 quarter.
Of note are the decisions to grant conditional authorisation for Tooltechnic Systems
(Australia) Pty Ltd to set minimum retail prices on Festool power tools until December
2018 and to grant authorisation until December 2017 to Victorian taxi operators
participating in a cooperative in relation to minimum fares charged for booked and
contracted work.
10.
Significant regulatory actions taken by the ACCC and AER in the quarter included:

draft decisions issued by the AER in November 2014 on the revenue proposals
submitted by seven energy distribution and transmission business in NSW and
ACT

the ACCC released the final 2014 petrol monitoring report, Monitoring of the
Australian petroleum industry 2014, on 3 December 2014

proceedings commenced in the Federal Court against EnergyAustralia Pty Ltd for
alleged contraventions of the National Energy Retail Law. The AER alleges that
EnergyAustralia made false or misleading representations and engaged in
misleading or deceptive conduct when dealing with certain consumers to sell
electricity and gas plans.
11.
The quarter was also marked with the release of a number of regulatory reports,
including the AER’s sixth State of the Energy Market Report. The report highlighted
that in the wholesale electricity market, falling demand is resulting in enough surplus
generation capacity to delay significant new investment for up to a decade, and that a
similar trend is emerging for the networks. Also released was the ACCC’s annual
Container Stevedoring Monitoring Report for 2013-14, which found that increased
competition in container stevedoring has delivered benefits to users of services and
the wider community, and highlighted risks to the industry’s future performance.
12.
In December 2014 the then Parliamentary Secretary to the Minister for the
Environment, Senator the Hon Simon Birmingham MP, released the final report for
the Independent Review of the Water Act 2007. The ACCC carries out a number of
functions under the Water Act, and the review recommended, amongst other things,
that the ACCC conduct a separate review of the Water Charge (Infrastructure) Rules
2010, the Water Charge (Planning and Management Information) Rules 2010 and the
Water Charge (Termination Fees) Rules 2009. The ACCC is currently preparing
advice for a possible amendment to the Water Charge Rules. This advice will be
provided by the end of December 2015.
13.
Engagement with a broad range of groups and stakeholders is paramount to the
success of the ACCC and AER’s work. In the December 2014 quarter meetings were
held with four of the six Consultative Committees. Discussion at the meetings
5
covered topics of priority in the energy, franchising, consumer protection and small
business fields.
14.
The ACCC continues to commit efforts to relationship and capacity building in the
Asia-Pacific region and beyond. A key element of this work is the Competition Law
Implementation Program (CLIP). This quarter workshops were held in Vietnam and
Laos, on ‘In-house Training Tools for Competition Authorities’ and ‘The role of
competition law in supporting Lao PDR’s economic success’.
6
1.
Maintaining competition
Maintain and promote competition and remedy
market failure
Enforcing the CCA for businesses and consumers
Competition enforcement
1.1.
1.2.
Competitive markets lead to lower prices, better quality, greater efficiency and more
choice, all of which enhance the welfare of consumers. As Australia’s competition
regulator, the ACCC works to enhance the welfare of Australians by:

maintaining and promoting competition

addressing market failures.
The ACCC does this by taking action under part IV of the Competition and Consumer
Act 2010 (CCA) in relation to:

cartels and other anti-competitive agreements

misuse of market power

exclusive dealing and resale price maintenance.
1.3.
The ACCC’s Compliance and Enforcement Policy sets out the principles adopted by
the ACCC to achieve compliance with the law. The ACCC exercises its discretion to
direct resources to the investigation and resolution of matters that provide the
greatest overall benefit for competition and consumers.
1.4.
Cartel conduct, anti-competitive agreements and misuse of market power are so
detrimental to consumer welfare and the competitive process that the ACCC will
always regard them as a priority.
Proceedings
1.5.
In the December 2014 quarter the ACCC was involved in 17 proceedings relating to
competition enforcement.
1.6.
These proceedings relate to competition matters in a range of industries including
pharmaceuticals, travel, fuel and financial services. A complete list of these
proceedings is included in Appendix 1.
1.7.
Of the 17 competition enforcement proceedings:

14 cases were carried over from the previous quarter

3 new cases were commenced in the quarter

1 case was concluded in the quarter

16 cases remain ongoing at the end of the quarter.
7
Proceedings commenced
1.8.
On 10 December 2014 the ACCC filed a notice of appeal in relation to the recent
decision of the Federal Court which dismissed part of the ACCC’s case against
Dateline Imports Pty Ltd (Dateline). The ACCC is appealing from the trial judge’s
findings that representations made in Dateline’s website and magazine
advertisements that Keratin Complex Smoothing Therapy hair product did not contain
formaldehyde were not false or misleading, when the ACCC believes that the
scientific evidence indicates that the product did contain formaldehyde.
1.9.
On 17 December 2014 the ACCC lodged a notice of appeal from the Federal Court’s
decision to dismiss the ACCC’s proceedings against Air New Zealand Ltd (Air New
Zealand) and PT Garuda Indonesia Ltd (Garuda) in relation to an alleged air cargo
cartel. In its proceedings, the ACCC alleged that Air New Zealand and Garuda
contravened the Trade Practices Act 1974 by fixing the level of various surcharges to
be applied to air cargo services supplied by a number of airlines between 2001 and
2006. The ACCC’s appeal is solely focused on the Court’s finding that there was no
‘market in Australia’.
1.10. The following first instance proceedings were commenced in the December 2014
quarter:
Cartels
OLEX AUSTRALIA PTY LIMITED & ORS
On 4 December 2014 the ACCC instituted proceedings in the Federal
Court against Olex Australia Pty Ltd (Olex) and several other parties for
alleged cartel and exclusionary conduct in the supply and acquisition of
electrical cable throughout Australia. The parties who are joined in the
proceedings are:

Australia’s two largest manufacturers of electrical cable, Olex
Australia Pty Ltd and Prysmian Power Cables & Systems Australia
Pty Ltd (Prysmian)

the electrical wholesaling businesses L&H (which is operated by
Lawrence & Hanson Group Pty Ltd) and Rexel (which is operated by
Rexel Electrical Supplies Pty Ltd and Australian Regional
Wholesalers Pty Ltd)

six senior executives from these manufacturing and wholesaling
companies

an industry association, Electrical Wholesalers Association of
Australia Limited (EWAA).
The ACCC alleges that during 2011 Olex, Prysmian, Rexel and L&H
entered into and gave effect to an arrangement that included provisions
which had the purpose of:

preventing, restricting, or limiting the supply of electrical cable by
Olex and Prysmian directly to contractors and other customers

allocating electrical contractors and other customers to the
wholesalers

preventing, restricting, or limiting the acquisition of electrical cable by
certain wholesalers from suppliers other than Olex and Prysmian

fixing, controlling, or maintaining the price of cutting services
provided by Olex and Prysmian.
The ACCC is seeking pecuniary penalties, declarations, and costs
against the companies and individuals, as well as orders for compliance
programs against the companies.
8
Secondary
boycotts
CONSTRUCTION FORESTRY MINING AND ENERGY UNION
(CFMEU)
On 20 November 2014 the ACCC instituted proceedings in the Federal
Court against the Construction Forestry Mining and Energy Union
(CFMEU), alleging it engaged, or attempted to engage, in secondary
boycott conduct directed at Boral Resources (Vic) Pty Ltd and Alsafe
Premix Concrete Pty Ltd (collectively Boral), in breach of the CCA.
The ACCC alleges that between February 2013 and April 2014, the
CFMEU instructed shop stewards to ban the use of Boral concrete at
commercial construction sites in metropolitan Melbourne. Shop stewards
then allegedly told Boral customers that on certain commercial
construction sites Boral concrete was not permitted, or that safety checks
on Boral concrete trucks, causing significant delays, would be conducted
if a customer proceeded to acquire Boral concrete.
The ACCC also alleges:

That the CFMEU, Mr John Setka, the Secretary of the
Victoria–Tasmania Branch of the Construction and General Division
of the CFMEU (CFMEU-VIC) and Mr Shaun Reardon, the Assistant
Secretary of the CFMEU-VIC, attempted to induce Boral to enter into
a contract, arrangement or understanding not to supply concrete to
Grocon.

That the CFMEU, through conduct of Mr Setka and Mr Reardon,
engaged in undue harassment or coercion of Boral in relation to the
supply of concrete.
The ACCC is seeking pecuniary penalties, declarations and injunctions
against the CFMEU, Mr Setka and Mr Reardon, as well as publication
orders against the CFMEU.
Exclusionary
conduct
LITTLE COMPANY OF MARY HEALTH CARE LIMITED
On 10 December 2014 the ACCC instituted proceedings in the Federal
Court against Little Company of Mary Health Care Limited and its
subsidiary Calvary Health Care Riverina Limited (together, Calvary) for
imposing by-laws regulating the use of Calvary medical facilities by
medical practitioners, which the ACCC alleges had the purpose of
substantially lessening competition.
In March 2011 Calvary introduced a new set of by-laws that governed the
conduct of medical practitioners who wish to use Calvary’s medical
facilities. The by-laws included provisions that allowed Calvary to refuse
to grant, or to revoke, the right of a medical practitioner to use its facilities
if the medical practitioner had become involved in the operation of a
business in competition with Calvary.
The ACCC alleges that, by granting medical practitioners the right to use
its medical facilities subject to these by-laws, Calvary entered into
contracts with the medical practitioners which had the purpose of
substantially lessening competition in day surgery markets, particularly in
Wagga Wagga, in contravention of the CCA.
The ACCC is seeking pecuniary penalties, declarations and costs.
9
Proceedings concluded
RENEGADE GAS PTY LTD, SPEED-E-GAS PTY LTD AND
OTHERS
Cartels
On 24 October 2014 the Federal Court by consent ordered penalties
totaling $8.3 million against Renegade Gas Pty Ltd (trading as Supagas
NSW, a privately owned company) (Renegade Gas), Speed-E-Gas
(NSW) Pty Ltd (Speed-E-Gas) (a wholly owned subsidiary of Origin
Energy Limited), and three current and former senior officers of the two
companies for engaging in cartel conduct.
The Court found that from at least 2006 until 2011, Renegade Gas and
Speed-E-Gas, through their senior officers and sales staff, gave effect to
a no-poaching understanding between the two companies, which
included each company not supplying liquid petroleum gas cylinders for
forklifts (forklift gas) to each other’s customers.
The Court also ordered injunctions, compliance training for Renegade
Gas and Mr Berman, and contributions to the ACCC’s costs totaling
$600 000.
Court-enforceable undertakings
1.11. The ACCC also resolves contraventions of the CCA by accepting court enforceable,
non-court based undertakings under section 87B of the CCA. In these undertakings,
which are on the public record, companies or individuals generally agree to:

remedy the conduct

accept responsibility for their actions

establish or review and improve their competition compliance programs and
culture.
1.12. In the December 2014 quarter the ACCC accepted two section 87B undertaking for
alleged breaches of competition provisions, from Standard White Cabs Limited
(trading as Townsville Taxis) on 15 October 2014 and Italiatech Australia Pty Ltd and
TMO Sports Pty Ltd on 11 December 2014.
Exclusive dealing
and exclusionary
arrangements
STANDARD WHITE CABS LIMITED
On 15 October 2014 the ACCC accepted a court enforceable
undertaking from Standard White Cabs Limited, trading as Townsville
Taxis, relating to alleged breaches of the competition provisions in the
CCA.
The ACCC’s investigation followed allegations that Townsville Taxis had
been restricting its affiliated taxi drivers’ from using third party taxi
booking applications and mobile telephones to accept taxi bookings from
customers. Townsville Taxis acknowledged that its conduct was likely to
have breached the exclusive dealing and exclusionary arrangement
prohibitions in the CCA.
As part of its undertaking, Townsville Taxis will ensure that its affiliated
drivers are free to lawfully use a third party booking application and/or a
mobile telephone to receive taxi bookings from customers, and will
provide them with notice of the undertaking.
Townsville Taxis will also implement a competition and consumer law
compliance program designed to minimise its risk of future potential
breaches of the CCA.
10
Resale price
maintenance
ITALIATECH AUSTRALIA PTY LTD (ITALIATECH) AND TMO
SPORTS PTY LTD (TMO)
On 11 December 2014, Italiatech Australia Pty Ltd (Italiatech) and TMO
Sports Pty Ltd (TMO), two importers and wholesale distributors of bicycle
parts and accessories to retailers Australia wide, have provided
court-enforceable undertakings to the ACCC admitting that they had
engaged in conduct that amounted to, or was likely to amount to, resale
price maintenance.
Following an investigation, the ACCC considered that:

Italiatech had engaged in resale price maintenance by inducing or
attempting to induce three Australian retailers who sold its helmets
and/or saddles not to sell those products below the recommended
resale price (RRP)

TMO had engaged in resale price maintenance by inducing or
attempting to induce three Australian retailers not to sell bicycle parts
and accessories below the price specified by TMO.
Italiatech and TMO have both undertaken to:

not engage in resale price maintenance for a period of five years,

write to their retailer customers informing them of the undertaking
and their freedom to determine resale prices

implement and maintain training programs for current and future staff

include statements with list pricing informing customers that
references to resale prices are only recommendations and that there
is no obligation to comply with the recommendation.
Continuing investigations
1.13. Competition and consumer issues in highly concentrated sectors, in particular the
supermarket and fuel sectors, remain a priority for the ACCC.
Cartels
1.14. Parties associated with Paul and Moses Obeid have challenged notices issued under
the ACCC’s compulsory powers under section 155 of the CCA. The notices relate to
the ACCC’s investigation into allegations of cartel conduct in relation to the 2009
tender process conducted by the NSW Department of Trade and Industry for
exploration licence over the Mount Penny coal tenement into the Bylong Valley.
These proceedings were won by the ACCC at first instance and upheld on appeal by
Paul and Moses Obeid on 20 November 2014. The ACCC’s investigation continues.
1.15. The ACCC has more than 10 current cartel investigations in process.
Maintaining competition in concentrated sectors
Mergers
1.16. The impact of proposed and completed mergers and acquisitions on competition is
assessed by the ACCC under section 50 of the CCA. This section prohibits
transactions which would have the effect, or likely effect, of substantially lessening
competition in a market. The ACCC does this by providing the merger parties with its
view on whether a particular proposal is likely to breach section 50 of the CCA. This
11
process is generally known as the ‘informal clearance’ process. Businesses may also
apply to the ACCC for formal clearance of mergers.
1.17. The ACCC deals with matters expeditiously through pre-assessment when it
determines that they do not require review because of the low risk that competition
concerns will be raised. As indicated in Table 1, a significant proportion of the
mergers assessed by the ACCC are pre-assessed, thus enabling the ACCC to
respond quickly when there are no significant concerns.
Table 1: Matters assessed and reviews undertaken – October to December 2014
Confidential Public
Pre-assessed 1 October – 31 December 2014
Total reviews undertaken 1 October – 31
December 2014
Total matters assessed and reviews undertaken
Total
69
0
69
0
15
15
69
15
84
Total reviews can be broken down into the following categories:
Not opposed
0
12
12
Finished—no decision (including withdrawn)
0
1
1
Opposed outright
0
0
0
Confidential review—ACCC concerns expressed
0
0
0
Resolved through undertakings
0
2
2
Variation to undertaking accepted
0
0
0
Variation to undertaking rejected
0
0
0
Significant merger decisions this quarter
Merger
CSR LIMITED AND BORAL LIMITED - PROPOSED CLAY
BRICK JOINT VENTURE
On 18 December 2014 the ACCC announced it would not oppose the
proposed clay brick joint venture between CSR Limited (CSR) and Boral
Limited (Boral). This decision was predicated upon the fact that, absent
the joint venture, Boral appeared unlikely to remain in clay brick
manufacturing in eastern Australia.
CSR and Boral are both suppliers of a range of products including
plasterboard, insulation, fibre cement, and roof tiles to the building and
construction industry in Australia. CSR and Boral’s proposed joint
venture included the manufacture, marketing and supply of clay bricks in
eastern Australia. It would reduce the number of major clay brick
manufacturers in eastern Australia from three to two, with the other being
Austral Brickworks.
CSR and Boral argued that the price of clay bricks was significantly
constrained by other external cladding materials - such as autoclaved
aerated products, fibre cement and concrete masonry. To support this,
CSR and Boral pointed to the long term structural shift in demand for clay
bricks over the past 40 years. However, while the ACCC recognised this
long term decline in demand for bricks, market inquiries suggested that
this was due to the growth of multi-residential dwellings as well as the
12
shift from double brick to single brick construction. Market inquiries
indicated that, for many residential builders and end consumers, other
forms of external cladding were not close economic substitutes for clay
brick. Therefore, the ACCC defined the relevant product market as a
market for the manufacture and supply of clay bricks.
The ACCC issued a Statement of Issues (SOI) on 16 October 2014
which identified significant preliminary competition concerns in NSW and
Queensland and potential concerns in Victoria and South Australia. The
ACCC expressed the preliminary view that, in NSW and Queensland, the
joint venture would be likely to facilitate greater and more sustainable
coordination between the remaining market participants. It was not clear
that the proposed joint venture would have a significant impact on
competition in Victoria and South Australia, reflecting the limited market
presence of CSR in Victoria and Boral in South Australia prior to the
formation of the proposed joint venture.
A key element of the merger analysis was the ‘counterfactual’, that is,
what would happen if the joint venture did not proceed. Following the
release of the SOI, the ACCC conducted an extensive review of business
records and the financial performance of Boral Bricks East as well as
s155(1)(c) oral examinations of two senior executives of the joint venture
parties. The ACCC concluded that there was sufficient evidence to
support Boral’s claims that it would exit brick manufacturing on the east
coast to realise the land value underlying its brick manufacturing sites in
the absence of the joint venture. Therefore, the ACCC determined that it
would not oppose the joint venture.
Merger
ELGAS LIMITED - PROPOSED ACQUISITION OF
WESFARMERS KLEENHEAT GAS PTY LTD'S EAST COAST
LPG ASSETS
On 18 December 2014 the ACCC announced that it would not oppose
Elgas acquiring Kleenheat’s east-coast LPG business after accepting
court-enforceable undertakings.
Elgas Limited is a member of the BOC Group of companies, owned by
international gases and engineering company the Linde Group.
Kleenheat is owned by Wesfarmers Limited.
Elgas and Kleenheat are major wholesalers and distributors of
automotive and non-automotive LPG in both cylinders and bulk. Elgas
owns and operates the Elgas Cavern, which is a major LPG import and
storage facility in Sydney. Elgas and Kleenheat are two of the largest
LPG suppliers in Australia, the other being Origin Energy Limited
(Origin).
The ACCC’s review focused on the supply of non-automotive LPG sold
in cylinders and in bulk in the eastern states of Australia. The proposed
acquisition excluded Kleenheat’s LPG business in Western Australia.
Non-automotive LPG has a variety of end uses, including in residential,
commercial and industrial applications.
The ACCC was initially concerned that the proposed acquisition would
have reduced competition in cylinder and bulk LPG markets, particularly
given the overlap between Elgas and Kleenheat in New South Wales,
Victoria and the ACT. The ACCC was also concerned that the proposed
acquisition would remove Kleenheat as the only competitor to Elgas with
the ability to distribute non-automotive LPG, including leisure cylinders,
to large national customers on competitive terms. These concerns were
outlined in a Statement of Issues published by the ACCC on
5 June 2014.
Following the Statement of Issues, Elgas offered an undertaking to divest
13
parts of Kleenheat’s business in New South Wales, Victoria, and the
ACT, to Renegade Gas and Origin. Kleenheat also offered an
undertaking to carry out a number of supporting actions to enable the
divestitures to occur.
Following an extensive review which included forensic financial analysis,
the ACCC found that Kleenheat would be likely to cease trading in the
eastern states if the sale to Elgas did not proceed. If Kleenheat ceased
operations, the ACCC considered that Kleenheat’s customers and assets
would become contestable, but with many of the customers likely to be
acquired by Elgas.
The ACCC therefore accepted the undertakings offered by Elgas and
Kleenheat, as it would expand the reach of Renegade (which trades as
Supagas), and Origin to distribute LPG into regional areas where they
previously had limited or no presence. This would enhance Renegade’s
and Origin’s abilities to compete against Elgas both at a local level and
on a state-wide basis.
Merger
EXPEDIA INC - PROPOSED ACQUISITION OF WOTIF.COM
HOLDINGS LIMITED
On 2 October 2014 the ACCC announced its decision to not oppose the
proposed acquisition of Wotif.com Holdings Limited (Wotif) by Expedia
Incorporated (Expedia).
Expedia and Wotif compete in the areas of online booking services for
accommodation, flights, holiday packages, car hire, cruises and other
travel products. However, the main area of overlap is for accommodation
booking services. Expedia and Wotif each operate online travel agent
(OTA) businesses which allow accommodation providers to distribute,
and consumers to book, accommodation. Expedia’s brands include
Expedia, Hotels.com, Hotwire.com, Venere.com and Egencia (a
corporate travel management company). Expedia also has a majority
shareholding in trivago, an online accommodation metasearch company.
Wotif is an ASX-listed and Australian-based OTA with brands including
Wotif.com, lastminute.com.au, travel.com.au, Asia Web Direct,
LateStays.com, Go Do and Arnold Travel Technology. Expedia and Wotif
are two of the three largest OTAs operating in Australia, the other one
being the Priceline Group, which operates OTA sites including
Booking.com and Agoda.
The ACCC’s review focussed on the likely impact of the proposed
acquisition on the supply of online distribution services to
accommodation providers.
In a Statement of Issues published on 4 September 2014, the ACCC
noted that Wotif represented an important source of bookings for some
accommodation providers and that its removal from the Australian
market may result in them paying higher commission rates to OTAs.
However, the ACCC found that there has been considerable change in
the competitive dynamics of the online accommodation distribution
market in recent years. This has included new entry by a number of
competitors and business models, including Booking.com, which has
grown quickly to become the largest OTA in Australia.
The ACCC also noted the increasing importance of metasearch sites
such as TripAdvisor and Google Hotels Finder, which aggregate the
offers of hotels and numerous OTAs in one place for consumers to
choose from. TripAdvisor is consistently one of the top two travel-related
websites visited by consumers in Australia.
Metasearch websites increasingly facilitate hotels’ ability to promote
14
themselves alongside OTAs, and transact directly with consumers.
The ACCC considered that the acquisition was unlikely to diminish the
dynamic nature of the industry and that developments from smaller OTAs
and from companies in related online sectors, such as the metasearch
providers, can be expected to constrain Expedia in the future.
The ACCC therefore concluded that the proposed acquisition was
unlikely to substantially lessen competition.
Statement of Issues
1.18. If the ACCC reaches a preliminary view that a proposed merger raises competition
concerns that require further investigation, it will publicly release a Statement of
Issues. A Statement of Issues provides the ACCC’s preliminary views, drawing
attention to particular issues with varying degrees of competition concern, as well as
identifying further lines of inquiry that the ACCC wishes to undertake. It provides an
opportunity for all interested parties (including customers, competitors, shareholders
and other stakeholders) to ascertain and consider the primary issues identified by the
ACCC. It is also intended to provide the merger parties and other interested parties
with the basis for making further submissions should they consider it necessary.
1.19. In this quarter the ACCC issued two Statements of Issue in the review of:

CSR Limited and Boral Limited - proposed clay brick joint venture

Rheem Australia Pty Ltd - possible acquisition of water heater assets of Dux
Manufacturing Ltd
Remedy market failure
Authorisations and notifications
1.20. In circumstances where competitive markets do not work to deliver the most efficient
outcomes it may be in the public interest to allow certain restrictions on competition.
This is particularly where there are features in a market that may lead to market
failure – where the market left to itself does not achieve the most optimal outcomes.
In many ways the authorisation and notification provisions of the CCA allow the
ACCC to consider the benefits from allowing conduct that addresses a market failure
but which nonetheless restricts competition.
Authorisations
1.21. The ACCC may ‘authorise’ businesses to engage in conduct that might otherwise
amount to a breach of the CCA where it is satisfied that the public benefit outweighs
any public detriment.
1.22. In assessing the likely public benefits and detriments of an authorisation application
the ACCC undertakes a transparent public consultation process, placing submissions
on a public register subject to any claims of confidentiality. After considering
submissions, the ACCC will issue a draft decision and provide an opportunity for
interested parties to request a conference to discuss the proposal. The ACCC will
then reconsider the application in light of any further submissions and release a final
decision.
15
Table 2: Authorisations received and decisions issued – October to December 2014
Total authorisations received 1 October –
31 December 2014
Number of proposals (number of
applications)
New
4 (6)
Revocation and substitution
4 (6)
Minor variations
0 (0)
Decisions issued 1 October – 31 December
2014
Number of proposals (number
of applications)
Draft determinations
13 (31)
Final determinations
12 (23)
Interim decisions (prior to draft)
2 (7)
Significant authorisations
Authorisation
TOOLTECHNIC SYSTEMS (AUST) PTY LTD –
AUTHORISATION – A91433
On 5 December 2014 the ACCC granted conditional authorisation to
Tooltechnic Systems (Aust) Pty Ltd (Tooltechnic) to set minimum retail
prices on Festool power tools until 31 December 2018.
This was the first application for authorisation to set minimum retail
prices, a practice known as resale price maintenance, under the Act.
Tooltechnic is the exclusive importer and wholesaler of Festool power
tools in Australia. Festool products are complex as they often have a
high level of features and functions, and form part of a system which also
includes a wide array of complementary accessories and consumables.
Festool products are also highly differentiated in terms of their attributes
and quality, and the provision of services to customers (both pre- and
post-sales) is important in the sale of Festool products.
On balance the ACCC considered that the likely public benefit resulting
from the expected increase in retail services will outweigh the clear, but
limited, detriment resulting from some customers facing a higher retail
price for Festool products.
Given the ACCC’s finely balanced assessment and that this was the first
authorisation application for resale price maintenance, the ACCC
decided to grant authorisation for four years rather than the five years
sought by Tooltechnic.
The ACCC imposed conditions on authorisation which require
Tooltechnic to provide the ACCC with certain information during the
period of authorisation. This will allow the ACCC to monitor the impacts
of resale price maintenance over that time and will inform consideration
of any future application for re-authorisation by Tooltechnic.
The ACCC accepts that resale price maintenance can, in certain limited
circumstances, address market failures, and thereby promote efficiency
and generate benefits to the public.
In this case the ACCC accepted that there was a market failure caused
by the free riding of some Festool retailers. Free riding occurs where
some retailers can gain the benefit of, or free ride on, the services
offered by other retailers.
16
Given the highly differentiated and complex nature of Festool products,
the ACCC considered that resale price maintenance was likely to limit
free riding by encouraging Festool retailers to offer better services to
attract customers. This would allow some customers to make more
informed decisions in purchasing trade quality power tools and to
continue to have the choice of a premium trade quality power tool
accompanied by a high level of post-sales services.
Authorisation
VICTORIAN TAXI ASSOCIATION – AUTHORISATION A91428
On 9 October 2014 the ACCC granted authorisation to current and future
taxi operators participating in a cooperative network (existing or future
network) within Victoria’s regional or country taxi licence zones to make
and give effect to contracts, arrangements or understandings within that
cooperative network as to the maximum fares charged for booked and
contracted work.
The ACCC granted authorisation until 31 December 2017.
The Victorian Government has implemented a number of taxi industry
reforms, including allowing operators in regional and country areas to set
their own fares. Operators working in a cooperative could not offer
consumers a common fare structure without first obtaining authorisation
from the ACCC. Although the operators are part of a network, they are
separate businesses capable of competing with other operators.
The ACCC considered that authorising the operators to agree maximum
fares would allow them to offer customers a simpler booking process and
a better-coordinated service. These efficiencies are likely to help the
cooperatives compete better with other taxi networks and hire cars.
However, the arrangements are likely to lessen competition between
operators. The ACCC took into account the Victorian Government’s
reforms, which are intended to promote competition and may constrain
that detriment.
The ACCC acknowledged there is some uncertainty about how
competition in local markets will develop and authorised the
maximum-fare arrangements for three years. This timeframe would allow
the industry time to prepare for the possibility that the ACCC may not
re-authorise the conduct if competition has not developed as anticipated.
Notifications
1.23. Notification is an alternate process to authorisation as a means for businesses to
obtain protection from legal action for certain conduct including exclusive dealing and
collective bargaining.
Exclusive dealing notifications
1.24. Exclusive dealing (where a business trading with another imposes restrictions on the
other business’s freedom to choose with whom, in what, or where it deals) is
prohibited under the CCA in certain circumstances. Third line forcing is a type of
exclusive dealing conduct which involves the supply of goods or services subject to a
condition that the buyer must also acquire certain goods or services from a third
party. Third line forcing conduct is prohibited outright while other forms of exclusive
dealing are only a breach of the CCA if they substantially lessen competition.
1.25. The exclusive dealing notification process provides protection from legal action for
potential breaches of the exclusive dealing provisions of the CCA where the ACCC
17
assesses there is sufficient public benefit. Lodging a notification with the ACCC
provides protection from legal action automatically from the lodgement date (or soon
after in the case of third line forcing conduct), which remains in force unless revoked
by the ACCC. Notifications can be reviewed by the ACCC at any time.
1.26. The ACCC may revoke the protection provided by a notification for third line forcing
conduct if it is satisfied that the likely public benefit from the conduct will not outweigh
the likely detriment. To revoke a notification for other exclusive dealing conduct the
ACCC must be satisfied that the conduct is likely to result in a substantial lessening of
competition and the likely benefit to the public will not outweigh the detriment.
Table 3: Exclusive dealing notification projects – October to December 2014
Exclusive Dealing Notifications 1
October – 31 December 2014
Matters lodged in the quarter
Matters requiring a draft notice
Matters allowed to stand
Number of proposals
(number of notifications)
111 (226)
0 (0)
126 (255)
Matters revoked
0 (0)
Matters withdrawn
0 (0)
Collective bargaining notifications
1.27. Groups of small businesses can lodge a collective bargaining notification to obtain
protection from legal action for the collective bargaining activity. The protection
provided by a collective bargaining notification comes into force automatically 14 days
after the notification is validly lodged – unless the ACCC objects to the notification–
and continues for three years. Notifications can be reviewed at any time.
1.28. Businesses seeking to lodge a valid collective bargaining notification must satisfy a
number of requirements—for example each member of the collective bargaining
group must reasonably expect that they will make at least one contract with the target
and that the value of each member’s transactions with the target will not exceed
$3 million per year (this figure differs for certain industries). These requirements do
not apply to the authorisation process.
1.29. There were no collective bargaining notifications lodged during the quarter.
18
2.
Protecting consumers and fair trading
Protect the interests and safety of consumers and support
fair trading in markets
Consumer protection outcomes
2.1.
In 2014 the ACCC prioritised work in the following areas:

consumer protection in the telecommunications sector, and in the energy sector
with a particular focus on savings representations, also referred to as ‘discounts
off what?’

emerging consumer issues in the online marketplace, particularly those
associated with the incremental disclosure of additional fees and charges
(including credit card surcharges) by traders (often referred to as ‘drip pricing’),
and comparator websites

in conjunction with other state and territory agencies, 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 and particularly representations made
about a consumer’s rights when buying products, including representations made
in the context of the sale of extended warranties

consumer protection issues impacting on Indigenous consumers.
Action to protect consumers
2.2.
2.3.
In the December 2014 quarter the ACCC was involved in 38 proceedings relating to
consumer protection. Of those:

30 cases were carried over from the previous quarter

8 first instance cases were commenced

8 cases were concluded

30 cases remain ongoing at the end of the quarter.
Since the introduction of the new consumer law remedies and powers in the Trade
Practices Act in April 2010 and the introduction of the ACL on 1 January 2011, the
total penalties awarded by the Federal Court under the ACL pecuniary penalty regime
is over $37 million. As at 31 December 2014 this figure encompasses 16 ACCC
cases where penalties awarded by the Court have been at or above $1 million. These
figures highlight the seriousness with which the Court views breaches of the ACL.
19
Proceedings commenced
2.4.
The following first instance proceedings were commenced in the December 2014
quarter:
CLA TRADING PTY LTD, TRADING AS EUROPCAR
False or
misleading
representations
On 10 November 2014 the ACCC instituted proceedings in the Federal
Court of Australia against CLA Trading Pty Ltd, trading as Europcar
Australia (Europcar), alleging that a number of terms in Europcar’s
vehicle rental contracts are unfair, and that Europcar engaged in
misleading or deceptive conduct and made false or misleading
representations regarding the liability cover provided to car hire
customers.
The ACCC seeks:


declarations that certain terms in Europcar’s rental contract are
unfair and therefore void
declarations, injunctions, pecuniary penalties, orders for the
publication of corrective notices and compliance program
orders.
ENERGYAUSTRALIA PTY LTD AND BRIGHT CHOICE
AUSTRALIA PTY LTD
On 21 November 2014, the ACCC instituted proceedings in the Federal
Court against EnergyAustralia Pty Ltd (EnergyAustralia) and its
telemarketing company, Bright Choice Australia Pty Ltd (Bright Choice),
for allegedly contravening the ACL by making false or misleading
representations and engaging in misleading or deceptive conduct when
dealing with certain consumers to sell EnergyAustralia’s electricity and
gas plans.
The ACCC alleges that Bright Choice signed up a number of consumers
residing in Victoria, New South Wales and Queensland to
EnergyAustralia plans over the telephone without the consumer’s
knowledge or consent, following representations by Bright Choice during
these calls that:

the consumers were not being signed up to an energy agreement

the consumers would be sent information, following which they could
decide whether or not to sign up to an energy agreement

EnergyAustralia and Bright Choice would not treat the consumer as if
he or she had agreed to enter into an energy agreement unless the
consumer subsequently contacted Energy Australia to accept the
offer.
In fact, those consumers were recorded by Bright Choice as having
agreed to enter into a contract and EnergyAustralia then sent each of
these consumers a ‘Welcome Pack’ containing contractual documents
and treated each consumer as having agreed to switch energy services
to a new EnergyAustralia plan. The ACCC alleges that the telemarketing
and subsequent mail out of ‘Welcome Packs’ involved false, misleading
and deceptive representations, in contravention of the ACL.
The ACCC is seeking pecuniary penalties, declarations and costs
against both EnergyAustralia and Bright Choice. The ACCC is also
seeking an injunction and compliance program orders against Bright
Choice.
20
DHRUV CHOPRA (OPERATOR OF ELECTRONIC BAZAAR)
On 3 December 2014 the ACCC issued proceedings in the Federal Court
against Mr Dhruv Chopra, the operator of the online electronics store
www.electronicbazaar.com.au (Electronic Bazaar) for alleged breaches
of the ACL. The ACCC alleges that Mr Chopra made false or misleading
representations about the availability of consumer refund rights and the
extent of Electronic Bazaar’s liability for faulty goods.
The alleged representations include statements to the effect that
consumers who purchased goods through the Electronic Bazaar website
were not entitled to a refund for goods which were no longer under an
express warranty; or where the goods had been used or not in original
condition or packaging; or unless the goods were faulty on arrival; or
unless a claim was made within a specified time period.
It is also alleged that Mr Chopra made false or misleading
representations that consumers’ refund rights were against a company
called ‘Unreal Technologies Private Limited’ or ‘Unreal Technology
Private Limited’, when neither of those companies existed. The ACCC
also alleges that Mr Chopra wrongly accepted payment on four separate
occasions by not supplying goods within the specified time or, where no
time was specified, within a reasonable time.
The ACCC is seeking interim injunctions against Mr Chopra to restrain
Mr Chopra from continuing to engage in the alleged conduct. The ACCC
is also seeking pecuniary penalties, declarations that Mr Chopra
contravened the ACL, final injunctions and costs.
Credence claims
DERODI PTY LTD AND HOLLAND FARMS PTY LTD
On 5 December 2014 the ACCC instituted proceedings in the Federal
Court against Derodi Pty Ltd (Derodi) and Holland Farms Pty Ltd
(Holland) alleging that their use of ‘free range’ in relation to their
Ecoeggs, Field Fresh and Port Stephens egg brands was false and
misleading.
The ACCC alleges that Derodi and Holland made false, misleading or
deceptive representations on egg cartons, websites, a Facebook page
and a Twitter account to the effect that the eggs supplied and labelled as
‘free range’ were produced:

by hens that were farmed in conditions so that the hens were able to
move about freely on an open range on every ordinary day

and/or by hens, most of which moved about freely on an open range
on most days.
The ACCC alleges that the hens used to produce the eggs for the Free
Range Egg Farms business were not able to move about freely on an
open range on an ordinary day because of the farming practices and
conditions of the farms where the hens were kept. The ACCC also
alleges that most of the hens did not move about freely on an open range
on most days.
The ACCC is seeking declarations, injunctions, pecuniary penalties,
orders for the implementation of compliance programs, corrective
notices, and costs.
21
RL ADAMS PTY LTD (TRADING AS DARLING DOWNS FRESH
EGGS)
On 12 December 2014 the ACCC instituted proceedings in the Federal
Court against R.L Adams Pty Ltd, which trades as Darling Downs Fresh
Eggs. The ACCC alleges that from 31 December 2013 to 6 October 2014
Darling Downs Fresh Eggs supplied eggs marketed and labelled as ‘free
range’ when in fact the laying hens had been continuously confined to
barns and had never had access to the outdoors.
The ACCC is seeking pecuniary penalties, a declaration, an injunction,
an order for a compliance program to be established, a publication order
and costs.
Unconscionable
conduct
COLES SUPERMARKETS AUSTRALIA PTY LTD AND
GROCERY HOLDINGS PTY LTD
On 16 October 2014 the ACCC instituted proceedings proceedings in the
Federal Court of Australia against Coles Supermarkets Australia Pty Ltd
and Grocery Holdings Pty Ltd (together, Coles) alleging that Coles
engaged in unconscionable conduct.
The ACCC alleged that Coles took advantage of its superior bargaining
position by demanding money from suppliers that it was not lawfully
entitled to, and was, in all the circumstances, unconscionable. These
proceedings arose out of the same investigation as the proceedings that
were instituted by the ACCC against Coles on 5 May 2014 in respect to
Coles’ Active Retail Collaboration (ARC) program.
The ACCC sought pecuniary penalties, declarations, injunctions and
costs.
On 22 December 2014, the Federal Court made declarations that Coles
engaged in unconscionable conduct and ordered Coles to pay combined
pecuniary penalties of $10 million and costs. The ACCC’s broader
investigation continues.
Consumer
protection
CHRISCO HAMPERS AUSTRALIA LTD
On 19 December 2014 the ACCC instituted proceedings in the Federal
Court against Chrisco Hampers Australia Limited (Chrisco) alleging
contraventions of the ACL involving an alleged unfair contract term, false
or misleading representations, and lay-by termination charges which
exceed Chrisco’s reasonable costs.
The ACCC alleges that Chrisco included an unfair contract term in its
2014 lay-by agreements. The ACCC also alleges that from January 2011
to at least December 2013, Chrisco made false or misleading
representations to consumers that they could not cancel their lay-by
agreement after making their final payment, when the ACL provides that
consumers have the right to terminate a lay-by agreement at any time
before delivery of the goods. It is also alleged that from 2011 until
December 2014 Chrisco charged consumers a lay-by termination fee in
excess of Chrisco’s reasonable costs in relation to those lay-by
agreements.
The ACCC is seeking pecuniary penalties, declarations, injunctions,
non-party consumer redress, and costs.
22
Undue
harassment or
coercion
CONSTRUCTION FORESTRY MINING AND ENERGY UNION
(CFMEU)
On 20 November 2014 the ACCC instituted proceedings in the Federal
Court against the Construction Forestry Mining and Energy Union
(CFMEU), alleging it engaged, or attempted to engage, in secondary
boycott conduct directed at Boral Resources (Vic) Pty Ltd and Alsafe
Premix Concrete Pty Ltd (collectively Boral), in breach of the CCA.
The ACCC alleges that between February 2013 and April 2014, the
CFMEU instructed shop stewards to ban the use of Boral concrete at
commercial construction sites in metropolitan Melbourne. Shop stewards
then allegedly told Boral customers that on certain commercial
construction sites Boral concrete was not permitted, or that safety checks
on Boral concrete trucks, causing significant delays, would be conducted
if a customer proceeded to acquire Boral concrete.
The ACCC also alleges:

That the CFMEU, Mr John Setka, the Secretary of the
Victoria–Tasmania Branch of the Construction and General Division
of the CFMEU (CFMEU-VIC) and Mr Shaun Reardon, the Assistant
Secretary of the CFMEU-VIC, attempted to induce Boral to enter into
a contract, arrangement or understanding not to supply concrete to
Grocon.

That the CFMEU, through conduct of Mr Setka and Mr Reardon,
engaged in undue harassment or coercion of Boral in relation to the
supply of concrete.
The ACCC is seeking pecuniary penalties, declarations and injunctions
against the CFMEU, Mr Setka and Mr Reardon, as well as publication
orders against the CFMEU.
False or
misleading
evidence
ROBERT PAUL DAVIES
On 2 October 2014 the ACCC commenced criminal proceedings in the
Federal Court, Brisbane against Mr Robert Paul Davies for allegedly
aiding and abetting the failure by Natural Food Vending Pty Ltd (Natural
Food Vending) to comply with a compulsory notice issued by the ACCC.
In 2010 the ACCC issued a notice under section 155 of the Trade
Practices Act 1974 (Cth) to Natural Food Vending requiring it to provide
certain information and documents. The notice was issued as part of the
ACCC’s investigation into allegations that Natural Food Vending made
false or misleading representations in the promotion and sale of vending
machine business opportunities.
The ACCC alleges that Mr Davies, the sole director of Natural Food
Vending, aided, abetted, counselled or procured the company’s failure to
comply with the notice, including by failing to inform the liquidator of the
existence of the notice or of the ACCC’s investigation into
representations allegedly made by Natural Food Vending.
23
Proceedings Concluded
Consumer
protection
ZEN TELECOM PTY LTD
On 1 October 2014 the Federal Court ordered Zen Telecom Pty Ltd (Zen
Telecom) to pay pecuniary penalties of $225,000 for contraventions of
the ACL following proceedings brought by the ACCC. The Court ordered
Zen Telecom to publish corrective notices on Zen Telecom’s websites
and in daily papers across Australia, and to pay the ACCC’s costs.
The Court declared that Zen Telecom engaged in misleading conduct
and made false and misleading representations during telemarketing
calls between September 2012 and August 2013 by representing that it
was acting on behalf of Telstra or a business or company associated with
Telstra, did not have any affiliation or connection to Telstra. The Court
also found that Zen Telecom had breached the unsolicited consumer
agreement provisions of the ACL.
BREAST CHECK PTY LTD
On 3 October 2014 the Federal Court ordered Breast Check Pty Ltd (now
called PO Health Professionals Pty Ltd) (Breast Check) to pay a penalty
of $75 000 for making false or misleading representations about its
breast imaging services. The former director of Breast Check,
Dr Alexandra Boyd, was ordered to pay penalties of $25 000 for being
knowingly concerned or involved in Breast Check’s contraventions.
Breast Check had represented that breast imaging using a thermography
device alone, or in conjunction with a Multifrequency Electrical
Impedance Mammograph (known as a MEM device), could provide an
adequate scientific basis for assessing whether a consumer was at risk
from breast cancer and the level of that risk, and assuring the consumer
that they did not have breast cancer. In March 2014 the Court found that
these representations were false, misleading and deceptive.
The Court also found that Breast Check had represented that there was
an adequate scientific basis for using the devices as a substitute for
mammography, when that was not the case. The Court held that this
representation was also false, misleading and deceptive.
DATELINE IMPORTS PTY LTD
On 19 November 2014 the Federal Court ordered Dateline Imports Pty
Ltd (Dateline) to pay penalties of $85 000 following action by the ACCC
for false or misleading representations about the amount of natural
keratin in its Keratin Complex Smoothing Therapy hair straightening
product.
In July 2014 the Court held that:

Dateline’s representation that its Keratin Complex Smoothing
Therapy hair straightening product was comprised of at least
35 per cent natural keratin was false or misleading, with the court
finding that it contained less than 3 per cent natural keratin.

Because the product contained less than 3 per cent natural keratin,
Dateline’s representation that it had the benefit of infusing at least 35
per cent natural keratin into the hair of customers using the product
was also false or misleading.

Dateline’s representation that a ban on the product by the Ireland
24
authorities would be overturned was misleading, and Dateline’s
managing director Mr David Taylor, was knowingly concerned in this
contravention because he knew that Dateline did not have
reasonable grounds for making this representation.
AGL South australia pty ltd
On 16 December 2014 the Federal Court found that AGL South Australia
Pty Ltd (AGL SA) made false or misleading representations and engaged
in misleading or deceptive conduct concerning the level of discount
residential consumers would receive under AGL SA’s energy plans.
The Court found that AGL SA made false or misleading representations
to consumers about the key benefit under their energy plan – the
discount off energy usage charges.
A hearing will be held in the Federal Court in Adelaide at a later date in
relation to the relief sought by the ACCC comprising
declarations, injunctions, corrective notices, costs, pecuniary penalties,
and redress for the consumers affected by AGL SA’s conduct.
HOMEOPATHY PLUS! PTY LTD
On 23 December 2014 the Federal Court found that Homeopathy Plus!
Pty Ltd (Homeopathy Plus!) and its director, Ms Frances
Sheffield, engaged in misleading conduct and made false or misleading
representations regarding the effectiveness of the whooping cough
vaccine and homeopathic remedies as an alternative in breach of the
ACL.
The Court found that Homeopathy Plus! and Ms Sheffield engaged in
misleading and deceptive conduct and made false or misleading
representations by publishing statements on the Homeopathy Plus!
website to the effect that:

the whooping cough vaccine is short lived, unreliable and no longer
effective

the vaccine may not be the best solution for, of limited effect, and is
unreliable at best in protecting against whooping cough

the vaccine is largely ineffective in protecting against whooping
cough.
In reality the whooping cough vaccine is effective in protecting a
significant majority of people from contracting whooping cough.
The Court also found that Homeopathy Plus! and Ms Sheffield engaged
in misleading and deceptive conduct and made false and misleading
representations to the effect that there was an adequate foundation in
medical science for the statement that homeopathic treatments are a
safe and effective alternative to the whooping cough vaccine, when in
fact no such foundation exists and the vaccine is the only treatment
currently approved for use and accepted by medical practitioners for the
prevention of whooping cough.
The matter returns to court on 4 February 2015 to set a timetable for
further evidence on penalties and other remedies. The ACCC is seeking
injunctions and pecuniary penalties, in addition to the declarations
already made by the Court.
25
Unconscionable
conduct
SOUTH EAST MELBOURNE CLEANING PTY LTD (IN
LIQUIDATION)
On 12 November 2014 the Federal Court declared that South East
Melbourne Cleaning Pty Ltd (in liquidation) (formerly Coverall Cleaning
Concepts South East Melbourne Pty Ltd) (Coverall Melbourne) engaged
in unconscionable conduct in contravention of the ACL. The Court also
declared that Coverall Melbourne engaged in misleading conduct, made
false or misleading representations and contravened the Franchising
Code of Conduct.
The Court declared that Coverall Melbourne’s franchise agreements with
the two franchisees were void from the date of the orders.
The Court also declared, by consent, that Coverall Melbourne’s former
director, Brett Jones, was knowingly concerned in Coverall Melbourne’s
unconscionable conduct contraventions. The Court ordered by consent
that Mr Jones pay a penalty of $30 000 and compensate the two affected
franchisees for the franchise fee they had paid and the monies owing for
work completed, amounting to slightly over $23 000. Mr Jones was also
ordered to pay a contribution to the ACCC’s costs.
The Court also made an order, by consent, disqualifying Mr Jones from
managing a corporation for 2 years, and accepted an undertaking from
Mr Jones and Coverall Melbourne’s former sales manager, Astrid Haley,
that they will not, for a period of 2 years, be directly or indirectly involved
in the management and/or marketing of a franchise business.
COLES SUPERMARKETS AUSTRALIA PTY LTD AND
GROCERY HOLDINGS PTY LTD
As outlined above, on 16 October 2014 the ACCC instituted proceedings
proceedings in the Federal Court of Australia against Coles
Supermarkets Australia Pty Ltd and Grocery Holdings Pty Ltd (together,
Coles) alleging that Coles engaged in unconscionable conduct.
On 22 December 2014 the Federal Court made declarations that Coles
engaged in unconscionable conduct and ordered Coles to pay combined
pecuniary penalties of $10 million and costs.
Court enforceable undertakings
2.5.
2.6.
In addition to court-based outcomes, the ACCC often resolves contraventions of the
CCA by accepting court enforceable, non-court based undertakings under section
87B of the CCA.
In these undertakings, which are on the public record, companies or individuals
generally agree to:

remedy the conduct

accept responsibility for their actions

establish or review and improve their trade practices compliance programs and
culture.
In the December 2014 quarter the ACCC accepted four section 87B undertakings for
alleged breaches of the CCA and the ACL.
26
False or
misleading
representations
LIVINGSOCIAL PTY LTD
On 19 December 2014 the ACCC accepted a court enforceable
undertaking from LivingSocial Pty Ltd (LivingSocial), an online group
buying site as a result of ACCC concerns about a term in Living Social’s
consumer contracts, and representations made on Living Social’s
website.
In the ACCC’s view, during 2011 and 2012 LivingSocial engaged in
misleading and deceptive conduct and made false or misleading
representations on its website about consumers’ refund rights. In
addition, the ACCC considers that from 2011 LivingSocial made false or
misleading representations on its website about the price of certain
deals.
Further, from at least January 2012 to November 2014, LivingSocial’s
terms and conditions contained a term that permitted LivingSocial to
make substantive changes to its terms and conditions without notifying
its consumers or voucher purchasers. In the ACCC’s view, this was an
unfair contract term.
Living Social has acknowledged that the representations may have
contravened the Australian Consumer Law (ACL) and that the term in its
consumer contacts was likely to have been an unfair contract term, as
defined by the ACL.
In the undertaking accepted by the ACCC dated 18 December 2014,
LivingSocial has undertaken that it will:

not make false or misleading representations with respect to price, or
rights, remedies or guarantees, including consumer guarantees
under the ACL

give voucher purchasers refunds in all circumstances where they are
entitled to a refund in accordance with LivingSocial’s terms and
conditions and/or the consumer guarantee provisions of the ACL

display prices of deals inclusive of all mandatory additional fees
except for delivery fees, the minimum charge for which will otherwise
be specified if known at the time of publication

use only comparison pricing statements that are not misleading in
representing the savings that could be achieved

send emails to all LivingSocial subscribers when substantive updates
are made to its terms and conditions

send an email to all LivingSocial subscribers containing a corrective
notice

develop and implement a compliance program.
27
Unconscionable
conduct
COLES SUPERMARKETS AUSTRALIA PTY LTD
As outlined above, on 16 October 2014, the ACCC instituted proceedings
proceedings in the Federal Court of Australia against Coles
Supermarkets Australia Pty Ltd and Grocery Holdings Pty Ltd (together,
Coles) alleging that Coles engaged in unconscionable conduct.
In addition to the orders made by the Federal Court on
22 December 2014, Coles also gave a court enforceable undertaking
dated 16 December 2014 to the ACCC which provides for the
establishment of a formal process overseen by an Independent Arbiter
that will allow for a review of the eligibility of:
Product safety

over 200 smaller suppliers (categorised by Coles as Tier 3 Suppliers)
to obtain refunds of any amounts by which their ARC rebate
payments exceeded the benefits which they obtained from the ARC
program

suppliers referred to in the second proceedings in respect of which
Coles has made admissions in the relevant Statement of Agreed
Facts and Admissions filed with the Court to obtain possible
payments.
TOYS “R” US AUSTRALIA PTY LTD
On 30 October 2014 Toys “R” Us Australia Pty Ltd (Toys R Us) paid a
penalty of $10 000 after the issue of an infringement notice by the ACCC
in relation to the supply of ‘Nantucket 4-in-1’ household cots that did not
comply with the mandatory safety standard. Toys R Us also provided a
court enforceable undertaking to the ACCC.
As part of the court enforceable undertaking Toys R Us provided to the
ACCC on 29 October 2014, it agreed to provide further notices to
consumers about the recall, to continue to offer free collection of affected
cots and refunds to customers, and to implement a consumer law
compliance program with a particular focus on enhancing its product
safety procedures.
False or
misleading
representations
INVOCARE LIMITED
On 17 November 2014 Invocare Limited paid a penalty of $102 000 after
being issued an infringement notice by the ACCC for allegedly making a
false or misleading representation.
On 14 November 2014 InvoCare Limited and its subsidiary, InvoCare
Australia Pty Limited (together, Invocare) also provided a court
enforceable undertaking to the ACCC.
The ACCC had received complaints that InvoCare made false or
misleading representations to some consumers who had pre-purchased
burial sites prior to January 2011 that they were contractually required to
purchase memorial plaques from InvoCare when this was not the case.
The ACCC was particularly concerned about these alleged
misrepresentations about the obligation to purchase memorial plaques,
as Invocare was dealing with consumers in circumstances where they
were particularly vulnerable.
As part of the court enforceable undertaking InvoCare has provided to
the ACCC, it acknowledges that the representations it made to
consumers likely contravened the ACL.
In the undertaking, InvoCare has agreed for a period of three years not to
require any customer to purchase a memorial, including customers who
are parties to existing contracts which contain such a requirement.
Customers who choose to purchase a bronze plaque memorial may now
28
purchase it from Invocare or another supplier, subject to pre-approval
and payment of a placement fee.
Infringement notices
2.7.
The payment of infringement notice penalties is not an admission of a contravention
of the CCA. The ACCC can issue an infringement notice where it has reasonable
grounds to believe a person has contravened certain consumer protection laws.
2.8.
In the December 2014 quarter the ACCC received payment for four infringement
notices. In addition to those matters identified above where a section 87B was also
obtained, the ACCC received payment for infringement notices to the following
conduct.
False or
misleading
representations
TELSTRA CORPORATION LIMITED
On 16 December 2014 Telstra Corporation Limited (Telstra) paid a
penalty of $102 000 following the issue of an infringement notice by the
ACCC in relation to an iPhone 6 advertisement which appeared in
The Age newspaper on 27 September 2014.
The advertisement for Telstra’s iPhone 6 and phone plan bundle
prominently displayed the plan cost of $70 per month when, in fact,
consumers were also required to pay an additional $11 per month for the
iPhone 6. The advertisement only disclosed the additional payment of
$11 and the total monthly cost of $81 in fine print.
The ACCC considered that Telstra’s advertisement misrepresented the
price of the phone and phone plan bundle to consumers. The
infringement notice was issued because the ACCC had reasonable
grounds to believe that Telstra had made a false or misleading
representation about the price of goods or services, in contravention of
section 29(1)(i) of the ACL.
Credence claims
HUME IMPORT & EXPORT (AUSTRALIA) PTY LTD
On 1 December 2014 Hume Import & Export (Australia) Pty Ltd trading
as Bera Foods (Bera Foods) paid a penalty of $10 200 following the
issue of an infringement notice by the ACCC.
The ACCC considered that by using the word ‘Honey’ and including a
map of Australia on the ‘Hi Honey’ label, Bera Foods had misrepresented
the product was Australian honey when in fact the product was
predominantly composed of plant sugars and was produced in Turkey.
The infringement notice was issued to Bera Foods because the ACCC
had reasonable grounds to believe Bera Foods had made a false or
misleading representation about the composition of Bera Foods
‘Hi Honey’ product, in contravention of the ACL.
29
Product safety
TOYS “R” US AUSTRALIA PTY LTD
On 30 October 2014 Toys R Us paid a penalty of $10 200 after the issue
of an infringement notice by the ACCC in relation to the supply of
‘Nantucket 4-in-1’ household cots that did not comply with the mandatory
safety standard. Toys R Us also provided a court enforceable
undertaking to the ACCC.
Toys R Us recalled the Nantucket cots after testing obtained by the
ACCC identified that the cots did not comply with the safety standard and
that there was a risk of injury or death to infants from the cots, including
from falls, entrapment or suffocation.
Other significant activities
Small business education and engagement
2.9.
The ACCC educates small businesses about their rights and obligations under the
CCA, including by producing guidance materials and other resources.
2.10. During this quarter, the ACCC developed new detailed guidance material for
franchisees and franchisors in readiness for the commencement of the new
Franchising Code of Conduct on 1 January 2015 (further information below).
2.11. The ACCC also continued to promote its three free online education programs (which
can be accessed via www.ccaeducationprograms.org)

A program for small businesses, which helps them understand their rights and
responsibilities under the CCA when dealing with customers, suppliers and other
businesses. More than 12 500 users have accessed the program since its launch
in April 2013, including more than 1400 this quarter.

A program for tertiary students, educating students enrolled in commerce,
management, marketing, economics and other business courses about Australia’s
competition and consumer laws and issues students are likely to encounter in
their future careers. More than 7500 users have accessed this program since
November 2013, including around 2500 this quarter.

A franchising pre-entry education program, administered by Griffith University. It
provides potential franchisees with the information they need to make an informed
decision about whether to buy a franchise.
2.12. ACCC Commissioners and staff delivered presentations to business groups during
this quarter and participated in business events. Highlights include Deputy Chair
Dr Michael Schaper’s keynote address to the Agribusiness Association of Australia
breakfast and presentation to the Regional Chambers of Commerce and Industry
(Western Australia). Staff also presented to the Small Business Solutions Forum,
alongside other regulators.
2.13. In partnership with the Australian Securities and Investments Commission (ASIC), the
Australian Tax Office (ATO) and the Fair Work Ombudsman (FWO), the ACCC ran a
live stream webinar for small businesses in October 2014. The webinar1 provided
useful tips and new tools and resources to assist small businesses to understand
their rights and obligations. The webinar was well received by the small business
sector with over 450 small businesses and small business representatives watching
live.
1
The webinar can be watched on YouTube: https://www.youtube.com/watch?v=tQaRwK3QAM0
30
Industry codes of conduct
2.14. During the quarter, the ACCC rolled out an education campaign to inform the
franchising sector about the new Franchising Code of Conduct, which commenced on
1 January 2015. The new code includes additional disclosure requirements and an
obligation for franchising participants to act in good faith. Breaches of certain
provisions of the code are subject to civil penalties and ACCC-issued infringement
notices. The ACCC’s education for franchisees and franchisors included:

new detailed guidance materials, including an updated Franchisee Manual and
Franchisor Compliance Manual, and new ACCC web pages (covering good faith,
the ACCC’s enforcement approach and frequently asked questions)

a keynote address by Deputy Chair Dr Michael Schaper to the Legal Symposium
of the Franchise Council of Australia’s National Franchise Convention (26 October
2014)

presentations by staff to various forums, including at the National Franchise
Convention and the Law Society of South Australia

an interactive webinar delivered by Dr Schaper (to coincide with the release of the
ACCC’s new guidance materials) - watched live by more than 500 people across
the franchising sector (9 December 2014)

two update sessions at the ACCC’s Franchising Consultative Committee meetings
(24 October and 14 November 2014)

digital advertising and email updates to the ACCC’s 2000+ Franchising
Information Network subscribers.
2.15. In November 2014 the ACCC wrote to a number of large businesses after concerns
were raised about compliance with the Unit Pricing Code. Unit pricing is a labelling
system that uses units of measurement to help consumers compare the prices of
products, regardless of their size or brand.
2.16. The ACCC also continues to liaise with Treasury on the proposed Food and Grocery
Code of Conduct, which is expected to be finalised in early 2015. The ACCC is
developing new guidance in readiness for the proposed introduction of this new code.
Scams
2.17. During the quarter the ACCC continued its Scam Disruption Project (commenced in
April 2014) to stop potential scam victims from sending more money to scammers.
The project uses financial intelligence to identify Australians sending funds to West
African nations and advising them they may have been targeted by a scam. The
project uses different methods and tools to prevent relationship scams, Total losses
for dating and romance scams were reported to be over $23 million last year.
2.18. So far 1830 letters have been sent to potential scam victims in NSW and the ACT.
Whilst it is still too early to draw firm conclusions from the data collected,
approximately 60 per cent of those receiving the ACCC's warning letters have
stopped sending money overseas for at least a six week period. Just over 80 per cent
of the people who had contacted the ACCC were scam victims. This contact
potentially saving them from further losses. Collectively, these people had lost
$2.4 million at an average of about $31 000 each.
2.19. The ACCC’s SCAMwatch website is the Australian Government’s online portal for
scams information. SCAMwatch provides a free subscription service to alert the
31
public to new scams. These ‘radars’ are communicated to over 31 000 subscribers.
SCAMwatch radars during the quarter included:

October 2014: Don’t book a scammer’s holiday: warning would-be travellers to
watch out for travel scams as scammers sought to take advantage of those
looking for a hard-earned break.

November 2014: Don’t let the Grinch steal Christmas – watch out for scammers:
With Christmas just around the corner, we reminded consumers to watch out for
scammers taking advantage of the Christmas rush to leave victims out of pocket
and a present.
2.20. The ACCC also runs a SCAMwatch Twitter account, alerting the public about scams
targeting Australian consumers and businesses, as well as how to recognise, avoid
and report them. In this quarter a total of 101 tweets were posted. The SCAMwatch
Twitter also continued to grow with over 7 000 followers reached by the end of the
year.
ICPEN internet sweep
2.21. It is important that dating sites are true and fair in their dealings with customers, and
provide protection from scammers. In 2014 over 2 400 consumers reported to the
ACCC having being approached by a dating and romance scammers.
2.22. Last quarter the ACCC participated in the International Consumer Protection and
Enforcement Network (ICPEN)’s annual internet sweep by reviewing dating websites
for misleading offers, unclear pricing policies or consumer contracts with unfair terms.
The ACCC also looked at these dating sites to assess measures in place to protect
consumers against scammers, as part of the National Scams Disruption Project.
2.23. The ACCC completed its review of dating websites at the end of 2014, following the
ICPEN internet sweep in September 2014, reviewing 65 online dating websites for
compliance with the ACL and the ACCC’s Best Practice Guidelines for dating
websites on how to best protect consumers from scams.
2.24. Based on its review, the ACCC considers there are opportunities to further encourage
industry take-up of the Best Practice Guidelines for protecting consumers against
scams, with just over half of all surveyed sites adopting practices consistent with the
guidelines. The ACCC will release a detailed report card on its findings in early 2015.
Comparator websites
2.25. Emerging issues in the online marketplace are an ACCC priority. In early 2014 the
ACCC commenced research into consumer issues with comparator websites in
Australia. On 28 November 2014 the ACCC released its findings in a report –
The Comparator website industry in Australia2.
2
Available at: http://www.accc.gov.au/publications/the-comparator-website-industry-in-australia
32
2.26. This report provides businesses, consumer groups and regulators with a better
understanding of the Australian comparator website industry. It examines how the
industry operates, and identifies challenges and benefits for both consumers and
businesses, and identifies areas for action by businesses to address poor conduct
and a lack of transparency by some operators. The ACCC’s concerns include a lack
of transparency about:

the extent of the comparison service, including market coverage

savings achieved by using the comparison service

comparison services being unbiased, impartial or independent

value rankings

undisclosed commercial relationships affecting recommendations to consumers

content and quality assurance of product information.
2.27. The ACCC recognises that comparator websites can assist consumers to make more
informed purchasing decisions when comparing what are often quite complex
products, and can promote healthy competition by assisting small or new service
providers to compete more effectively.
2.28. However, the ACCC is concerned that poor conduct by some industry participants
may undermine these benefits and mislead consumers. Lack of transparency is
central to these concerns – both in terms of ‘front-of-shop’ and ‘out-the-back’
activities.
2.29. In 2015 the ACCC will be releasing best practice guidelines to assist comparator
website operators and businesses to comply with Australia’s competition and
consumer protection laws. The ACCC will also provide consumer guidance on how to
check that they are comparing apples with apples.
Product safety
Recalls
Table 4: Recalls Negotiated – 1 October to 31 December 2014
Recalls by category
General consumer goods
51
Motor vehicles
58
Food
13
Therapeutic goods
Other
1
24
Note: ACCC-negotiated recalls are prompted by consumer complaints, supplier intelligence, market-place
surveillance, overseas recalls and other Commonwealth and state/territory regulator referral.
2.30. During the quarter the ACCC worked with state electrical regulators to address safety
concerns about unsafe power boards and double adaptors. This follows a voluntary
recall the ACCC received by the ACCC in August 2014 that triggered an investigation
into faulty power boards by both the ACCC and state electrical regulators. A number
of other suppliers of the power boards were identified as a result and the affected
products were traced back to two manufacturers in China. As a result, there have
33
been 13 recall notifications involving 216 273 affected units with most occurring
during the quarter.
2.31. During the quarter the ACCC and Electrical Safety Victoria contacted a number of
Australian distributors of spa heater controls about voluntarily recalling the affected
products. This follows the ACCC receiving a voluntary recall in May 2014 that
triggered an investigation into faulty spa heater controls supplied by MSPA. Five
recalls were negotiated during the quarter and a further five are anticipated. The
products have been banned for sale in Europe and in Western Australia.
Infinity electrical cable
2.32. The recall of faulty Infinity electrical cable announced in August 2014 continues
making progress with a second announcement in October of recalls being conducted
by eight further suppliers.
2.33. Subsequent to the importer going into liquidation, the ACCC announced the first
full-scale national recall of the cables when 19 of the largest down-stream suppliers
who supplied 85 per cent of the approximately 4000km of cable sold agreed to
remediate safety issues associated with the non-compliant cable. State and Territory
regulators have been negotiating recalls with smaller local suppliers who supplied the
remaining 15 per cent of the cable. There are now 27 suppliers participating in the
national recall. This includes Masters, which supplied approximately half of the cable,
as well as Mitre 10, and Home, Timber and Hardware, which sold much smaller
amounts. Electrical wholesalers supplied the remainder in varying quantities.
2.34. Three suppliers have reported that their recalls have been completed. Overall
progress will be gradual and suppliers have been asked to assess and work on the
oldest and/or highest risk installations first. This will assist suppliers in spreading the
cost of replacing the cable, which is understood to be installed in thousands of homes
and businesses. The cable is known to have been installed in new buildings as well
as in existing buildings during renovations or when electricians have done wiring as
part of appliance installations.
Emerging hazards and product safety recalls
2.35. The ACCC is concerned by indications that some major retailers may not be
managing the risk of consumer harm from unsafe products through control measures
and quality assurance processes, which in turn may not meet product safety
regulatory requirements. We have been preparing engagement with industry in this
area and a webinar for businesses will be held in the first half of 2015.
2.36. During the December 2014 quarter the ACCC received 687 Mandatory Reports (a
report of a product related injury under the ACL). Of these, the ACCC assessed 293,
367 were considered outside the ACCC’s jurisdiction (327 were food-related), and 27
will be assessed during the next quarter.
2.37. Of the reports assessed by the ACCC, several lead to recalls, including a food
processor product, an apple cutter, and a children’s table and chairs.
2.38. The ACCC also conducts hazard assessments of product reports obtained from
various sources including media stories, consumer complaints, State and Territory
ACL regulators and overseas sources that associate consumer products with injury.
In this quarter, 169 of these reports were assessed, bringing the total hazard
assessments in the period to 462.
34
2.39. Of all the reports assessed as within the ACCC’s jurisdiction, 36 reports had a risk
rating of ‘significant’ or higher. There were 379 assessed as moderate risk or lower.
In the ACCC Hazard Identification and Assessment Guide there are levels of risk that
range from Virtually None, Remote, Extremely Low, Very Low, Low, Moderate,
Significant, High, Very High and Extremely High. Ratings below Moderate are usually
flagged for No Further Action.

Virtually None, Remote and Extremely Low – 65 reports

Very Low – 242 reports. A substantial proportion of the reports (107) in this
category relate to allergic reactions from cosmetics, household cleaning products,
baby products and clothing. A number of reports relate to minor lacerations and
burns from kitchen products such as glasses breaking, sharp knives, pot handles
breaking and the like. Thirteen reports in this category relate to the Thermomix
TM31 recall

Low – 110 reports. Many reports in this category (30) relate to more severe
allergic reactions including swelling, blistering and hives from cosmetics,
household cleaning products, baby products and clothing. Other reports involve
injuries of a more severe nature such as fractures and burns from a variety of
products for example, bikes, kitchen utensils, electrical tools and furniture.
Twenty-three reports in this category relate to the Thermomix TM31 recall.

Moderate – All 9 reports relate to serious and potential injuries involving furniture,
agricultural motorised equipment, after market car seats, toys and products used
in recreational activities. One report in this category relates to the Thermomix
TM31 recall.

Significant – 31 reported incidents. 25 relating to quad bikes, button batteries,
ethanol burners, bath mats and ladders. The ACCC is addressing and assessing
these hazards.
2.40. The ACCC began new work to address safety concerns with a life jacket product, and
raw (unpasteurised milk) products being sold as ‘bath milk’. A voluntary recall of the
raw milk product was published on 12 December 2014.
2.41. Four incidents involving lacerations relating to an apple cutter resulted in an ACCC
negotiated voluntary recall.

High – one report (relating to a ladder which resulted in an ACCC negotiated
voluntary recall).

Very high – two reported incidents:

one workplace fatality subject to Coronial inquiry involving a ladder.

one report of life threatening injuries sustained by a child after ingesting a
battery from bathroom scales
Both reports contributed inform existing ACCC actions.

Extremely high – two incidents assessed as extremely high: Both related to
button batteries, one of which was an international incident.
New standards and bans
2.42. The Minister for Small Business, the Hon. Bruce Billson MP, approved a new
mandatory safety standard for bean bags on 21 November 2014. Consumer Goods
(Bean bags) Safety Standard 2014 (Consumer Protection Notice No 4 of 2014) will
revoke the existing standard and replace it with a new mandatory standard. The
regulation has been registered on the Federal Register of Legislative Instruments and
35
will come into effect on 1 January 2016. The existing standard remains in force until
this date.
2.43. The new standard was developed in consultation with stakeholders. It addresses
suffocation and inhalation risks associated with bean bags filled with small
polystyrene beans. The new regulation makes important improvements to the
operation and efficiency of the standard, including:

Refinements to exclude products which do not pose any safety risk to users (such
as small cushions and remote-control holders).

Prohibiting items which could facilitate movement of the child-resistant fastener.
2.44. The safety warning label requirements have been amended to alert users to the risk
of infants suffocating whilst sleeping on bean bags.
Hazards associated with chemicals in consumer goods
2.45. In October 2014, the ACCC published safety guidance on concentrations of
chemicals in certain consumer goods on the Product Safety Australia website. The
guidance assists businesses to supply safe goods in Australia by specifying the levels
of certain chemicals’ concentrations which are considered to be safe. A survey
conducted earlier in 2014 found that only a small proportion of articles tested
contained the hazardous dyes, and these goods were voluntarily recalled. The ACCC
is also finalising a draft Regulation Impact Statement examining the regulatory and
non-regulatory options to manage the risks associated with hazardous azo dyes in
clothing and textiles sold in Australia.
2.46. The ACCC has also considered the November 2014 tranche of accelerated
assessments completed by the National Industrial Chemicals Notification and
Assessment Scheme (NICNAS). NICNAS made recommendations to the ACCC in
relation to an additional 73 azo dyes used to dye clothing and textiles and which may
reduce to hazardous aromatic amines.
2.47. During the quarter, the ACCC assessed work undertaken in Australia and overseas in
relation to phthalates including the US Consumer Product Safety Commission’s
response to the report on phthalates and phthalate substitutes released by the
Chronic Hazard Advisory Panel.
Compliance campaigns
2.48. Routine surveillance activities during the quarter identified the supply of banned
combustible candle holders on sale in bricks and mortar retail stores and via online
suppliers. These products present a hazard to consumers as they can cause burns,
serious injuries or death if the candle holder or decoration catches alight and causes
a fire.
2.49. The ACCC used search powers under section 135A (1) of the CCA to quickly identify
goods subject to the ban. The goods were removed from sale and product recalls
initiated.
2.50. The ACCC conducted compliance inspections of retailers across Australia for noncompliant cosmetic products as part of an escalating compliance campaign.
Ingredient labels that are missing or inaccurate can mislead consumers, impact safe
purchasing decisions and expose consumers to ingredients that may cause allergic
reactions. Allergic reactions can be very harmful to consumers and in some cases
may lead to serious injury where, for example egg products can result in anaphylaxis
36
in some people (rapid-onset, potentially life-threatening systemic allergic reaction)
and possibly death.
2.51. Suppliers of non-compliant products face possible sanctions including infringement
notices imposing a monetary penalty or in some cases taking the matter to court to
seek a civil pecuniary penalty which can be up to $1.1 million for companies and
$220 000 for individuals.
2.52. Following targeted actions to detect non-compliant household cots, the ACCC issued
an infringement notice and accepted enforceable undertakings from Toys R Us for
the supply of non-compliant Nantucket cots.
2.53. Toys R Us recalled the Nantucket cots after testing obtained by the ACCC identified
that the cots did not comply with the safety standard and that there was a risk of
injury or death to infants from the cots, including from falls, entrapment or suffocation.
2.54. Household cots are required to meet certain performance standards to ensure a cot is
sufficiently robust to withstand child-like forces that may compromise the structural
integrity of the cot, thereby potentially leading to safety hazards. For example a drop
side latch failing to engage causing a fall-out hazard.
37
3.
Effective Regulation
Promote the economically efficient operation of, use of
and investment in monopoly infrastructure
Energy
3.1.
The Australian Energy Regulator (AER) is Australia’s national energy market
regulator and an independent statutory authority. The AER is funded by the
Commonwealth, with staff, resources and facilities, provided by the ACCC. This
section of the report details the AER’s achievements in the December 2014 quarter.
AER Board appointments
3.2.
On 1 October 2014 Ms Paula Conboy commenced as the new Chair of the AER.
Ms Conboy has over 20 years’ experience in public utility regulation in Australia and
Canada and was previously a Member of the Ontario Energy Board in Canada.
Decisions and determinations
AER issues draft decisions on revenues for ACT, NSW and Tasmanian energy
businesses
3.3.
On 27 November 2014 the AER issued draft decisions on the revenue proposals
submitted by seven energy distribution and transmission businesses in NSW and
ACT, for the period commencing on 1 July 2015. The draft decisions applied to:

ActewAGL (ACT electricity distribution) for the period 2015–19

Ausgrid, Endeavour Energy and Essential Energy (NSW electricity distribution) for
the period 2015–19

Jemena Gas Networks (NSW gas distribution) for the period 2015–20

TransGrid for the period 2015–18 and Directlink (NSW electricity transmission) for
the period 2015–20.
3.4.
The AER proposed lower allowed revenues for transferring electricity and gas, which,
if implemented, should result in lower energy bills for end users in the ACT and NSW.
3.5.
On 27 November 2014 the AER also issued a draft decision on the revenue proposal
submitted by the Tasmanian electricity transmission business, TasNetworks
(previously known as Transend). The revenue proposal applies for the four years
starting on 1 July 2015.
3.6.
This was the first time the AER had made draft decisions under the new National
Electricity Rules. This draft decision reflected the guidelines developed through the
AER’s Better regulation program.
3.7.
The draft decisions formed part of the consultation process undertaken by the AER
and were made on the basis of information provided by the businesses, consultation
with consumers, and the AER’s own analysis.
3.8.
The AER held pre-determination conferences and public forums following the release
of the draft decisions to explain them to stakeholders.
38
AER decides to replace the Framework and Approach for five Victorian
Electricity Distributors
3.9.
On 24 October 2014 the AER made its final decision to replace the Framework and
Approach, which is to apply for the 2016-2020 regulatory control period. The AER
commenced consultation on the need to replace the current Framework and
Approach for the following five Victorian Electricity Distributors in June 2014:

AusNet Services; Jemena; Powercor; United Energy; CitiPower
Consultation on electricity distribution regulatory proposals from QLD and SA
3.10. On 5 December 2014 the AER released issues papers and commenced consultation
on the regulatory proposals from electricity distribution businesses’ in Queensland
(Energex and Ergon Energy) and South Australia (SA Power Networks).
3.11. These proposals set out the revenues the businesses propose to collect from
electricity consumers through distribution charges for the next five year period (2015–
20).
3.12. The papers set out initial impressions of the distributors' proposals, including what the
AER thought were some of the key issues for assessment.
3.13. SA Power Networks proposed higher electricity charges and annual increases to
network charges of around 2 per cent, on average, over the next five years.
3.14. The AER conducted public forums in SA and QLD in December to allow the
businesses to provide high level presentations to stakeholder regarding their
proposals.
Victorian electricity network tariffs approved
3.15. On 19 December 2014 the AER approved electricity network tariffs for the Victorian
distributors CitiPower, Powercor, Jemena Electricity Networks, AusNet Services, and
United Energy, for the period 1 January 2015 to 31 December 2015.
3.16. The AER assessed these proposals for compliance with the 2010 to 2015 distribution
determination price controls so that only approved costs are recovered from
consumers as required by the National Electricity Rules.
3.17. The increases in network charges for 2015 are larger than those approved last year.
The differences are mainly caused by increases in costs for the use of the
transmission network - reflecting previous under-recovery of costs - and bonuses the
companies have received for overall improved reliability of their services. Overall the
AER estimates final retail bills will increase by approximately 4 per cent on average in
2015 as a result of these tariff increases.
Victorian gas network tariffs approved
3.18. On 1 December 2014 the AER approved the Victorian gas transmission and
distribution tariffs for the period 1 January to 31 December 2015. The AER received
tariff variations for the APA GasNet transmission network and the four distribution
networks; Australian Gas Networks (Victoria and Albury) (formerly Envestra), Multinet
Gas and AusNet Services. The 2015 tariff variations complied with the requirements
of their respective gas access arrangements for the period 2013–17.
39
Advanced Metering Infrastructure 2015 revised charges
3.19. On 12 December 2014 the AER published its decision on the Victorian distribution
network service providers’ 2015 advanced metering infrastructure charges, effective
from 1 January to 31 December 2015.
3.20. The decision contained a prudency review of expenditure incurred by AusNet
Services, Jemena and United Energy in 2013. The decision also set out distributors’
manual meter fees to apply from 1 April 2015 to 31 December 2015. The charges
have been determined in accordance with requirements of the Order in Council that
governs regulation of AMI.
Electricity network businesses respond to Regulatory Information Notices
(RINs)
3.21. The AER uses Regulatory Information Notices (RINs) to collect information from
regulated energy network businesses. The information is gathered to allow the AER
to undertake regulatory functions, including monitoring outcomes against the
determinations, developing performance reports and preparing for future
determinations.

On 12 December 2014 the AER published the 2013-2014 Economic
Benchmarking RIN responses from electricity distribution and transmission
businesses

On 19 December 2014 the AER published the 2013-2014 Category Analysis RIN
responses from electricity distribution and transmission businesses.
AGN's cost pass through tariff variation application for mains replacement
3.22. On 21 November 2014 the AER approved a cost pass through tariff application by
Australian Gas Networks (AGN) (Victoria), formerly Envestra, for increased costs
arising from its 2013–17 mains replacement program.
3.23. The AER provided the pass through to enable the businesses to receive additional
funding, only once they had delivered a trigger volume of mains replacement.
Allowing for the additional funding was consistent the objective of removing all cast
iron mains over the longer term, consistent with the businesses’ Gas Safety Cases,
approved by Energy Safe Victoria. The AER approved the tariff variation because
AGN has completed the trigger volume of mains replacement and provided evidence
that it intends to complete further mains work above the allocated allowance.
Draft electricity transmission information guideline
3.24. On 10 December 2014 the AER released a draft information guideline for electricity
transmission network service providers for consultation. The revised guideline
rationalises the annual reporting requirements for transmission businesses and sets
out the information that a transmission business must include in its annual statement
to the AER. It addresses the duplication of reporting obligations that existed between
the current guideline and Better Regulation regulatory information notices and
removes requirements that are redundant or not aligned with the current regulatory
framework.
40
Energy wholesale markets
Market monitoring and reporting
Quarterly compliance report
3.25. On 11 November 2014 the AER released Quarterly Compliance Report for the
September quarter. The report summarises the AER's compliance monitoring and
enforcement activities in the wholesale electricity and gas markets during the July to
September 2014 period.
Reporting
QUARTERLY COMPLIANCE REPORT
During the September 2014 quarter, the AER renewed our focus on
ensuring participants comply with the information requirements of the
Natural Gas Services Bulletin Board, engaging with a range of
participants, including LNG producers and the Australian Energy Market
Operator (AEMO) on their obligations to provide information to the
Bulletin Board.
The AER also received notification from the Australian Energy Market
Operator (AEMO) regarding its failure to publish the Victorian gas
market’s pricing schedule in accordance with the Gas Rules.
For the National Electricity Market (NEM), the AER observed a significant
increase in rebids for review in September. The AER also engaged
Hydro Tasmania over potential compliance issues arising from the
management of a potential safety issue with one of the smaller dams in
Hydro Tasmania’s portfolio. The AER continued our work with AEMO to
increase compliance levels with respect to instrument transformer
testing.
State of the Energy Market 2014 report
3.26. On 19 December 2014 the AER published its eighth State of the Energy Market
report, which highlighted that declining energy demand is bringing structural shifts
across the entire industry.
Reporting
STATE OF THE ENERGY MARKET REPORT
In the wholesale electricity market, falling demand is resulting in enough
surplus generation capacity to delay significant new investment for up to
a decade. Falling demand is also translating into lower wholesale prices.
A similar trend was emerging for the networks, with lower levels of
demand removing the need for major expansion projects. Reduced
investment is flattening revenue requirements.
In retail, the abolition of carbon pricing contributed to lower electricity
prices in most jurisdictions in 2014, although carbon emissions from
electricity generation rose as coal fired generation increased its market
share. There was also evidence of more widespread retail price
discounting during the year.
41
Submissions to enquiries and reviews
COAG Energy Council review of enforcement regimes
3.27. On 24 October 2014 the AER made a submission to the Coalition of Australian
Government Energy Council’s discussion paper on the final report regarding its
Review of enforcement regimes under the National Energy Laws, The submission
supported the final report’s key recommendations.
Competition policy (Harper) review
3.28. On 24 November 2014 the AER provided a submission in response to the draft report
of the independent review of Australia's competition laws and policy (the Harper
Review). The review was commissioned by the Commonwealth Government.
Harper
HARPER REVIEW
The main focus of the submission was on the recommendation to create
a national access and pricing regulator – a recommendation that would
have the effect of splitting the functions of the AER between a national
access and pricing regulator and the ACCC.
The submission considered that the proposal to divide the AER’s
functions between two regulators fails to recognise the integrated and
changing nature of energy markets. The recommendation to transfer the
AER’s retail roles to the ACCC also mischaracterised our current roles
under the National Energy Retail Law and Rules. Further, there are
significant practical implementation issues associated with this proposal
that would need to be addressed.
The submission also comments on the energy market reform
recommendations proposed in the report. The submission was
supportive of the reforms outlined to finalise the energy reform agenda,
including proposed retail market and reliability standards reforms.
Energy White Paper – Green Paper submission
3.29. On 3 December 2014 the AER made a submission to the Energy White Paper –
Green Paper.
Energy White
Paper
GREEN PAPER SUBMISSION
Electricity networks are entering a period of fundamental change. Drivers
such as demand uncertainty, network cost pressures, the need to
integrate renewable generation and electric vehicles, and the change
brought about by new technologies, will impact the way energy is
delivered to and by consumers in the future.
The AER has found that the current regulatory framework can
accommodate changes in technology and market developments, and
enables competition. The framework has also been strengthened by
recent reforms and our Better Regulation guidelines.
42
Energy retail markets
Retailer authorisations and exemptions
Revised Retailer Authorisation Guideline
3.30. On 18 December 2014 the AER published the revised Retailer Authorisation
Guideline and accompanying Notice of Final Instrument. The Guideline was
published in accordance with the retail consultation procedure set out in the National
Energy Retail Rules. In October 2014 the AER released a draft of the revised
Guideline and invited stakeholders to provide submissions.
3.31. Under the National Energy Retail Law (Retail Law), businesses that want to sell
energy and need a retailer authorisation, must apply to the AER. The Guideline is
intended to support this role by assisting applicants to understand the process for
obtaining an energy retailer authorisation and also explains the processes for the
transfer, surrender and revocation of retailer authorisations.
Authorisations granted to electricity retail businesses
3.32. On 13 November 2014 the AER granted an individual retailer authorisation to Locality
Planning Energy Pty Ltd
Exemptions granted to electricity sellers
3.33. Parties that sell energy can apply to the AER for exemption from the requirement to
obtain authorisation to sell electricity and gas (subject to certain conditions). The AER
granted individual exemptions to the following entities during the quarter:

Brookfield District Energy (CP) Pty Ltd – 24 October 2014

Countrywide Energy Pty Ltd – 24 October 2014

Trading Green Pty Ltd - 29 October 2014

Horan & Bird – 29 October 2014

Kenjarhy Solar Pty Ltd – 29 October 2014

Solarmine Pty Ltd – 29 October

Demand Manager Solar Funding – 29 October 2014

Sunburnt Country Power - 4 December 2014

Permintext Energy Resources - 4 December 2014

Humenergy Group – 4 December 2014

Energy Lease - 4 December 2014
Other retail market matters
AER takes action against EnergyAustralia
3.34. On 21 November 2014 the AER instituted proceedings in the Federal Court against
EnergyAustralia Pty Ltd for allegedly contravening the Retail Law by failing to obtain
the explicit informed consent of customers before transferring them to new energy
plans.
43
Proceedings
ENERGYAUSTRALIA
EnergyAustralia contracted Bright Choice Australia Pty Ltd to provide its
telemarketing services during 2012 and 2013. Bright Choice contacted
prospective customers on EnergyAustralia’s behalf to sell electricity and
gas plans. The AER alleges that, in a number of instances, Bright Choice
sales agents signed up some customers residing in South Australia and
the ACT to EnergyAustralia plans over the telephone without the
customer’s knowledge or consent. A number of these customers were
subsequently transferred to EnergyAustralia from their existing retailer.
Regulating innovative energy selling business models
3.35. On 18 November 2014 the AER released an issues paper on the regulation of
innovative energy selling business models under the Retail Law. The AER is seeking
stakeholder comments on two potential options for regulating the sale of energy by
these businesses. This consultation builds on the AER's final statement of approach
for energy selling by alternative energy sellers, published on
2 July 2014.
2014 annual performance and compliance reports
3.36. On 25 November 2014 the AER published two reports that provided a detailed
snapshot of the Australian retail energy market, including energy affordability and
compliance with the Retail Law – the National Energy Retail Law Annual compliance
report and the Annual report on the performance on the retail energy market.
3.37. The annual report on the performance of the retail energy market provided a detailed
picture of key issues in the ACT, South Australian, Tasmanian and New South Wales
markets, including the number of customers on hardship programs, debt levels and
customer service levels. It also included AER’s annual energy affordability report.
3.38. The compliance report provided an update on the AER’s compliance monitoring and
enforcement activities for 2013-4 and guidance on the AER’s priority areas for the
coming year.
New electricity bill benchmarks
3.39. Electricity retailers are required to publish the benchmarks for the relevant local zone
on residential customers’ bills so that customers can compare their electricity usage
with similar-sized households in their area.
3.40. On 18 December 2014 the AER published updated electricity consumption
benchmarks for residential customers. The benchmarks show how much electricity
household of different sizes use in local zones around Australia. The updated
benchmarks will take effect from 1 July 2015, until then retailers will continue to
include the current benchmarks on customers’ bills.
Telecommunications
3.41. The ACCC is responsible for the economic regulation of the communications,
broadcasting and audio-visual content sectors.
3.42. The communications industry in Australia is undergoing a long period of transition
brought about by technological developments, changes in consumer usage and most
significantly, policy-induced structural change – that is the roll out of the wholesale
only national broadband network (NBN) and the structural separation of Telstra.
44
3.43. As the competition regulator, the ACCC’s key goals in the communications sector are
to:

maintain and promote competition and remedy market failure where it arises

protect the interests of consumers and fair trading

support the economically efficient investment in, and use of, infrastructure.
3.44. In the December 2014 quarter the ACCC progressed a number of inquiries and made
a range of decisions to promote its key goals for all elements of Australia’s
communications networks including for both legacy and NBN networks.
Decisions and determinations
Telstra’s steps to improve fault repairs for wholesale customers
3.45. On 15 October 2014 the ACCC approved Telstra’s proposed actions to improve its
performance in repairing faults on basic telephone services for wholesale customers.
Telstra was required to submit the rectification proposal after reporting that its
performance in repairing certain faults during parts of 2012 was significantly better for
retail customers than for wholesale customers. Telstra identified this as a possible
breach of its obligation under its structural separation undertaking to treat retail and
wholesale customers in an equivalent manner.
3.46. Telstra’s proposed actions include implementing workflow management tools during
periods where there are a high number of faults to ensure that its workforce
resources better align with the volume of work required.
Telstra to inform NBN Co on premises yet to migrate to the NBN
3.47. On 13 October 2014 the ACCC approved a request from Telstra to make a minor
variation to its Migration Plan. The Migration Plan outlines how Telstra will
progressively migrate voice and broadband services from its copper and HFC
networks as the NBN is rolled out. The variation will see Telstra provide NBN Co with
a monthly report on the number of premises with an active fixed line service in areas
facing disconnection within six months. NBN Co asked Telstra to provide this report
to facilitate a smoother migration to the NBN and to assist it in meeting its public
information campaign commitments. The ACCC is also considering a Telstra request
that it be permitted to implement specific measures in early NBN rollout areas which,
although in conflict with its Migration Plan, would appear to better protect consumers.
Extension of decision-making period for the domestic transmission capacity
service and mobile terminating access service final access determinations
3.48. On 27 October 2014 the ACCC extended the inquiry period to make final access
determinations (FADs) for the domestic transmission capacity service (DTCS)3 and
mobile terminating access service (MTAS)4 until 23 May 2015. Under the Competition
& Consumer Act 2010 (CCA) the current DTCS and MTAS FAD inquiries, which
commenced on 23 May 2014, must be completed within six months of
commencement unless extended.
3
The domestic transmission capacity service is a high-capacity transmission service used to carry large volumes of voice,
data and video traffic. It is an essential input into the provision of services over mobile, legacy and the national broadband
networks.
4
The mobile terminating access service is a wholesale service used by providers of voice calls to allow their subscribers to
make calls to subscribers of (another) mobile network.
45
3.49. The ACCC decided to extend the original inquiry period for the DTCS and MTAS FAD
inquiries to facilitate extensive consultation with stakeholders on developing an
appropriate pricing approach for both FADs. The ACCC also needed more time to
consult on the non-price terms and conditions and supplementary prices for both
FADs.
Extension and variation of 2012 DTCS FAD
3.50. On 5 November 2014 the ACCC extended the operation of the 2012 DTCS FAD,
initially due to expire on 31 December 2014. The extension of the 2012 DTCS FAD
ensures that the routes and exchange serving areas (ESAs) regulated under the
2014 DTCS declaration will be covered by a FAD until a new FAD is made.
3.51. On 17 December 2014 the ACCC varied the 2012 DTCS FAD to ensure that
regulated price and non-price terms are available on the three regional routes and
seven ESAs which were re-regulated under the 2014 DTCS declaration.5 The
extended and varied DTCS FAD will be in place from 1 January 2015 until the ACCC
makes a new DTCS FAD.
3.52. The ACCC considered that the variation will provide certainty and transparency to
industry on prices for regulated routes as well as providing a ‘fall-back’ for access
seekers if the parties cannot reach commercial agreement on reasonable terms of
access.
NBN Co SAU dispute resolution arrangements – changes to standard terms of
appointment
3.53. On 17 December 2014 the ACCC approved amendments to NBN Co’s dispute
resolution arrangements. These amendments remove the mandatory insurance
requirement from the standard terms of appointment for the dispute resolution pool
and panel members.
3.54. Earlier this year the ACCC approved 23 persons nominated by NBN Co to become
pool members for the purpose of dispute resolution between NBN Co and access
seekers.
3.55. NBN Co proposed these amendments following consultation with its customers and
pool members. Under NBN Co’s special access undertaking, it must seek the
ACCC’s approval before making any amendments to its standard terms of
appointment for pool or panel members. The ACCC has considered the proposed
amendments and agrees that the changes are reasonable and would allow NBN Co
to attract a sufficient range and depth of expertise to its dispute resolution pool.
Other significant events
Fixed line services final access determination inquiry 2013
3.56. The ACCC is currently undertaking public inquiries into making FADs for seven
declared fixed line services (fixed line services).6 On 22 October 2014 the ACCC
released a position statement on how it intends to account for the effect of
arrangements between Telstra and NBN Co in the FADs for Telstra’s regulated fixed
line services.
5
The three regional routes are to Bundaberg, Maryborough and Rockhampton, and the seven regional ESAs are Kirwan,
Gulliver, Withcott, Middle Ridge, Newtown, Drayton and Frenchville.
6
The seven declared fixed line services are the: Fixed Originating Access Service, Fixed Terminating Access Service, Line
Sharing Service, Local Carriage Service, Unconditioned Local Loop Service, Wholesale ADSL and Wholesale Line Rental.
46
3.57. The ACCC stated its position that it would account for arrangements regarding the
migration of customers to the NBN and the use of Telstra’s assets by NBN Co using
regulatory values in its pricing model. This approach maintains the current cost based
approach to setting regulated prices on Telstra’s fixed line network. The ACCC also
stated it would not use values established in the Definitive Agreements between
Telstra and NBN Co in determining regulated prices.
3.58. For non-price terms and conditions of access in the FADs, the ACCC is conducting a
joint consultation for all the FAD services (that is, the fixed line services, DTCS and
MTAS).
3.59. On 30 October 2014 the ACCC released a discussion paper on non-price terms and
conditions. This paper sets out the regulatory options for making non-price terms and
conditions for the declared services and seeks further stakeholder views on these
options. Submissions in response to the paper were due by 12 December 2014.
Separately, on 8 December 2014, the ACCC emailed key stakeholders seeking
comments on the proposed drafting of specific non-price terms which the ACCC may
include in its draft and final access determinations.
3.60. On 10 December 2014 the ACCC extended the period in which it has to make a final
decision for the fixed line services FAD(s) to 11 July 2015. The ACCC expects to
release a draft decision on price terms in early 2015 before making a final decision in
mid-2015.
ACCC submission to the review of the Telecommunications Consumer
Protections Industry Code
3.61. On 5 November 2014 the ACCC provided a submission in response to the
Communications Alliance’s consultation on the draft revised Telecommunications
Consumer Protections Industry Code (TCP Code).
Consumer
protection
TELECOMMUNICATIONS CONSUMER PROTECTIONS
INDUSTRY CODE
The ACCC’s submission did not support the proposed changes to the
TCP Code and the ACCC submitted that the revisions went significantly
beyond the intention to maintain consumer protections, remove
unnecessary prescription and allow flexibility for providers as to how they
meet information requirements.
The ACCC submission expressed support for the current TCP Code
which was the product of extensive engagement between the ACCC, the
Australian Communications and Media Authority (ACMA), the
Telecommunications Industry Ombudsman, industry and consumer
representatives. The current TCP Code is designed to help consumers
obtain clear and accurate information about telecommunications offers
and address a poor history of industry compliance in this area.
The Communications Alliance is currently reviewing the submissions
from stakeholders and is expected to submit a revised TCP Code to the
ACMA for registration late this year or early next year.
47
ACCC’s preliminary view on Long Term Revenue Constraint Methodology
3.62. Under the special access undertaking (SAU), NBN Co must submit a set of regulatory
information for each financial year that sets out its capital expenditure, operating
expenditure, its allowed revenue and accumulated losses – its Long Term Revenue
Constraint Methodology (LTRCM). This information allows the ACCC to assess
whether NBN Co has complied with its regulatory requirements under the SAU.
3.63. NBN Co submitted a set of regulatory information for the 2013–14 financial year and
certain historical financial information for prior years on 31 October 2014.
3.64. Under the SAU, the ACCC must give NBN Co its preliminary view on this LTRCM by
30 December 2014. On 10 December 2014 the ACCC notified NBN Co of its
preliminary view that NBN Co’s regulatory information complied with the relevant
criteria in the SAU.
3.65. The ACCC intends to publish a draft LTRCM determination in early 2015 and will
seek submissions from interested parties. The ACCC will make its final LTRCM
determination by 30 June 2015.
Entering of revised Definitive Agreements with Telstra for implementing a
multi-technology NBN
3.66. On 14 December the Australian Government announced that it had finalised
negotiations and entered revised Definitive Agreements with Telstra to facilitate the
rollout of its preferred multi-technology model NBN. The revised agreements are not
subject to formal ACCC consideration or approval.
3.67. As a consequence of the move to a multi-technology model for the NBN, Telstra will
submit for ACCC consideration a revised Migration Plan that sets out the steps it will
take to migrate services off its networks and onto the NBN.
Reports released
ACCC’s report for the Minister for Communications on Telstra’s compliance
with retail price controls
3.68. Under the CCA the ACCC is required to report yearly to the Minister for
Communications on Telstra’s compliance with retail price controls that apply to its
fixed-line telephony services.
3.69. The retail price controls are set out in Telstra Carrier Charges – Price Control
Arrangements, Notification and Disallowance Determination No.1 of 2005. The
determination requires Telstra to comply with price caps and other price and nonprice conditions on Telstra’s fixed-line telephony services.
3.70. On 31 October 2014 the ACCC provided the Minister with its annual report advising
that Telstra had complied with the price controls in the 2013-14 reporting period. The
ACCC report is expected to be tabled in Parliament in February 2015.
3.71. Earlier this year the Department of Communications sought the ACCC’s views on the
current relevance of the price controls as part of a consultation on proposed
telecommunications deregulation measures. The ACCC expressed the view that
market forces had outweighed the effectiveness of the controls. This was evident
from a consistent fall in retail prices below the price controls and Telstra’s
accumulation of credits for price increases that were allowed but not passed on to
consumers.
48
Fuel price monitoring
3.72. The ACCC closely follows developments in the petroleum industry and monitors the
retail prices of petrol, diesel and automotive liquefied petroleum gas (LPG) in all
capital cities and around 180 regional locations.
Fuel monitoring
FUEL PRICE MONITORING
The 2014 ACCC petrol monitoring report (Monitoring of the Australian
petroleum industry 2014) was provided to the Minister and released
publicly on 3 December 2014. The report is available on the ACCC
website at www.accc.gov.au.
Key messages about petrol prices in this year’s report included: 2013-14
petrol prices were the third highest on record in real terms; Australian
retail petrol prices largely reflect international factors and domestic taxes;
Australian petrol prices in 2013-14 were among the lowest in the OECD
due to lower fuel taxes in Australia relative to other countries; price
cycles significantly affect fuel prices in Australia’s largest cities;
international refined petrol prices were relatively high but stable in 201314; crude oil prices remained high in 2013-14; another domestic refinery
(Shell-Corio) announced its closure; profits in the downstream petroleum
industry were high in 2013-14. The report also re-affirmed analysis in
previous reports that retail petrol prices in regional locations in Australia
are typically higher than those in capital cities.
The report also noted the ACCC’s other fuel-related decisions in 2013-14
including merger decisions, and noted the status of the ACCC’s
enforcement activities in the petrol industry. These included the
completion of an investigation into ‘shopper docket’ fuel discount
schemes operated by the larger supermarkets and the completion of an
investigation into price information sharing arrangements in the fuel
retailing industry.
New fuel price monitoring direction
3.73. New monitoring arrangements for the petrol industry were announced in the quarter.
On 9 December 2014 the Minister for Small Business, the Hon Bruce Billson MP,
signed a new direction to the ACCC to monitor the prices, costs and profits relating to
the supply of unleaded petroleum products in products in the Australian petroleum
industry for three years, effective from 17 December 2014, reporting at least quarterly
to the Minister. The new arrangements supersede the previous annual reporting.
Price movements in the September 2014 quarter
Petrol
3.74. Chart 1 shows movements in these prices over the period 1 October to
31 December 2014. Retail RULP prices are shown on the left hand side of the chart
and Mogas 95 prices are shown on the right hand side.
3.75. A comparison of movements in these two prices is indicative rather than an exact
science and factors other than international benchmark prices can influence retail
petrol prices in the short run. This caveat also applies to the comparisons of
movements between retail diesel and automotive LPG prices and their respective
international benchmarks.
49
Movements in retail RULP prices and international benchmark prices—
1 October to 30 December 2014
Australian cents per litre
150
Five largest cities (7-day rolling average retail
price), LHS
100
140
90
130
80
120
70
110
Australian cents per litre
Chart 1
60
Singapore Mogas 95 Unleaded
(7-day rolling average price, lagged by 10 days), RHS
100
01-Oct-14
Source:
50
15-Oct-14
29-Oct-14
12-Nov-14
26-Nov-14
10-Dec-14
24-Dec-14
ACCC calculations based on FUELtrac, Platts and RBA data.
3.76. Daily average retail RULP prices and Mogas 95 prices decreased during the
December 2014 quarter. RULP prices in the five largest cities decreased from a high
of around 149 cents per litre (cpl) in October 2014 to a low of around 117 cpl at the
end of December 2014, a decrease of around 32 cpl. During the same period, Mogas
95 prices decreased from a high of around 79 cpl in mid-October 2014 to a low of
around 53 cpl at the end of December 2014, a decrease of around 26 cpl. The large
fall in Mogas 95 prices was due to significant decreases in crude oil prices caused by
global oversupply and OPEC’s decision in November 2014 to not cut production.
Diesel
3.77. The ACCC monitors the movement of retail diesel prices against the price of
Singapore Gasoil with 10 parts per million sulphur content, lagged by 11 days (Gasoil
10ppm). Chart 2 shows seven-day rolling average retail diesel prices on the left hand
side of the chart and Gasoil 10 ppm prices on the right hand side.
3.78. Seven-day rolling average retail diesel prices in the five largest cities decreased from
around 152 cpl in early-October 2014 to around 139 cpl at the end of December
2014, a decrease of around 13 cpl, while Gasoil 10 ppm prices decreased from
around 79 cpl to around 59 cpl in the same period, a decrease of around 20 cpl.
50
Chart 2
Movements in retail diesel prices and international benchmark prices—
1 October to 30 December 2014
160
95
150
85
140
75
130
65
Australian cents per litre
Australian cents per litre
Five largest cities
(7-day rolling average retail price), LHS
Singapore Gas Oil 10ppm
(7-day rolling average price, lagged by 11 days), RHS
120
01-Oct-14 15-Oct-14 29-Oct-14 12-Nov-14 26-Nov-14 10-Dec-14 24-Dec-14
Source:
55
ACCC calculations based on FUELtrac, Platts and RBA data.
Automotive LPG
3.79. The ACCC monitors the movement of retail automotive LPG prices against the
average of Saudi Aramco contract prices for propane and butane (Saudi CP), which
are issued on the first day of the month (see Chart 3).
3.80. Average retail automotive LPG prices in the five largest cities (on a seven-day rolling
average basis) decreased from around 77 cpl in early October 2014 to around 70 cpl
at the end of December 2014, a decrease of around 7 cpl, while the Saudi CP
decreased from around 45 cpl to around 35 cpl in the same period, a decrease of
around 10 cpl.
Movements in retail automotive LPG prices and international
benchmark prices—1 October to 30 December 2014
Australian cents per litre
85
70
Five largest cities
(7-day rolling average retail price), LHS
75
60
65
50
Saudi CP benchmark prices, RHS
55
45
01-Oct-14 15-Oct-14 29-Oct-14 12-Nov-14 26-Nov-14 10-Dec-14 24-Dec-14
40
Australian cents per litre
Chart 3
30
Source: ACCC calculations based on FUELtrac, RBA and Gas Energy Australia data.
51
Rail access
3.81. The Australian Rail Track Corporation (ARTC) manages Australia’s interstate rail
network and the Hunter Valley coal rail network in New South Wales. ARTC is subject
to two access undertakings—one for each of the rail networks it manages—provided
to the ACCC pursuant to Australia’s National Access Regime (set out in Part IIIA of
the CCA). The National Access Regime aims to promote competition in markets that
need access to infrastructure which has the potential to create bottlenecks (such as
ARTC’s railway networks). The ACCC has an ongoing role in monitoring compliance
with these access undertakings.
Decisions and determinations
Hunter Valley Access Undertaking
3.82. The Hunter Valley Coal Network Access Undertaking, accepted by the ACCC in
2011, regulates access to the rail network in the Hunter Valley region leased by
ARTC. The network is predominantly used to transport export coal from the region’s
mines to the Port of Newcastle in the world’s largest coal export operation. It is also
used for non-coal freight and domestic coal.
3.83. The Hunter Valley Coal Network Access Undertaking requires ARTC to annually
submit documentation to the ACCC for the purpose of a compliance assessment. In
May 2014 ARTC submitted its compliance documentation for the 2013 calendar year.
On 26 November 2014 the ACCC released a position paper setting out its preliminary
views on issues such as the prudency and efficiency of ARTC’s costs and its
compliance with the revenue cap.
3.84. In particular, the ACCC’s preliminary view is that ARTC’s application of its revenue
cap for 2013 may be inconsistent with the principles set out in the Hunter Valley Coal
Network Access Undertaking. Further, that the effect of ARTC’s approach will have
resulted in a cross-subsidy from one group of users (Pricing Zone 1 and 2 Access
Holders) to another (Pricing Zone 3 Access Holders). The ACCC has called for
submissions from stakeholders on these issues by 21 January 2015.
3.85. On 31 January 2014 ARTC submitted a variation application to incorporate the
characteristics of the most efficient train configuration (also known as the final
indicative service) and associated access charges into the Hunter Valley Coal
Network Access Undertaking. Incorporating these characteristics was intended to be
a further step toward optimising throughput on the Hunter Valley coal supply chain,
and forms part of the long-term solution to addressing capacity constraints in the
Hunter Valley.
3.86. The ACCC conducted two rounds of consultation with stakeholders, initially issuing a
consultation paper in February 2014 followed by a position paper in August 2014.
During these consultations it became clear that there remained divergent views within
industry on the efficient train configuration and appropriate pricing and there needed
to be more time for stakeholders to discuss these issues. On 7 November 2014
ARTC withdrew its application from the ACCC’s consideration.
Bulk wheat export – access to port terminal services
Mandatory Code
3.87. As of 30 September 2014 the ACCC regulates port access in accordance with the
Mandatory Port Terminal Access (Bulk Wheat) Code of Conduct (the Code).
52
3.88. The Code regulates bulk wheat port terminal operators to ensure that exporters have
fair and transparent access to terminal facilities. The Code applies to a broader set of
operators than those regulated under the previous undertaking regime.
3.89. The Code contains a range of obligations on port operators including a
non-discrimination requirement, dispute resolution processes, ACCC approval of
capacity allocation systems, and certain reporting requirements.
Exemption processes available under the Code
3.90. The Code provides for processes whereby the ACCC or the Minister for Agriculture
may exempt a port terminal service provider from certain obligations in relation to a
specified port terminal facility.
3.91. There are two distinct avenues for exemption provided for under the Code.
3.92. In the case of the Minister:

Clause 5(1) of the Code provides that the Minister may determine that a port
terminal service provider is an exempt service provider if the Minister is satisfied
that the provider is a cooperative that has:
(a) grain-producer members who represent at least a two-thirds majority of grainproducers within the grain catchment area for the port concerned
(b) sound governance arrangements that ensure the business functions efficiently
and that allow its members to influence the management decisions of the
cooperative.
3.93. In the case of the ACCC:

Clause 5(2) of the Code allows for an exemption process whereby the ACCC may
make a determination to exempt a port terminal service provider from certain
provisions of the Code in relation to a specific port terminal facility. The ACCC
must have regard to a series of matters including the public interest, the legitimate
business interests of the port operator and the interests of exporters.

Exempt service providers face a lower level of regulation as contained in
Part 2 of the Code, which contains general obligations on port terminal service
providers to deal in good faith and publish certain information including a daily
loading statement.
Ministerial exemption of CBH from the Code
3.94. The ACCC has been informed that on 17 November 2014 the Minister for Agriculture
found that Co-operative Bulk Handling Limited’s (CBH) port terminal facilities located
at Albany, Esperance, Geraldton and Kwinana satisfactorily meet the criteria for
exemption in the Port Terminal Access (Bulk Wheat) Code of Conduct.
3.95. The Minister has therefore determined that those facilities will be subject to a lower
level of regulation contained in Part 2 of the Code.
ACCC intended exemption assessment schedule
3.96. The ACCC considers that a number of port terminal operators are likely to apply to
the ACCC to be exempt from certain provisions of the Code. This is due to various
factors, such as the coverage of the Code extending to a broader cohort of operators
than under the previous regime, as well as emerging competition in the industry. The
53
ACCC has written to industry indicating an intended exemption assessment schedule
for 2015. It has also released its Guidelines on the ACCC’s process for making and
revoking exemption determinations.
3.97. As outlined below the ACCC has already made an exemption decision in relation to
GrainCorp’s Newcastle facility. It is also currently looking at exemption applications
for GrainCorp facilities in Victoria and Emerald’s port terminal in Melbourne.
Exemption: GrainCorp’s Newcastle facility
GrainCorp
Newcastle
GRAINCORP EXEMPTION
On 1 October 2014 the ACCC published a determination to exempt
GrainCorp’s port terminal at Carrington, Newcastle from coverage under
the Code.
The rationale for the determination was based on the ACCC’s 18 June
2014 final decision to accept GrainCorp’s application to vary its 2011
access undertaking to remove the facility from the majority of the
obligations under that undertaking.
The determination ensured the practical continuation of the ACCC’s June
decision.
Exemption Applications: Victorian wheat port terminals
Victorian wheat
ports
VICTORIAN WHEAT PORT TERMINALS
The ACCC is now assessing exemption applications for port facilities
located in Victoria where the Code currently applies to established
facilities which are controlled by different operators. The ACCC is
seeking views on whether to reduce regulation at Victorian wheat port
terminals under the new mandatory Code on bulk wheat terminal access.
The ports under assessment are:

GrainCorp’s bulk wheat port terminals at Geelong and Portland

The Emerald bulk wheat terminal at the Port of Melbourne.
The ACCC will conduct these assessments at the same time as the
facilities are located in similar geographic regions and may compete with
each other.
GrainCorp and Emerald have lodged exemption applications for their
respective ports. In their applications, the port operators submit that their
Victorian terminals compete against each other and that this limits their
ability to exercise market power. The operators also argue that the ports
have excess export capacity and that their ability to exercise market
power is limited by the domestic market, container exports, and
prospective port developments.
The ACCC will assess the level of competition faced by each facility and
make its determination against the relevant matters set out in the Code.
The ACCC’s Issues Paper outlines GrainCorp and Emerald’s exemption
applications and seeks public submissions in response to questions in
the paper. The closing date for submissions was Friday 30 January
2015.
54
Container stevedoring monitoring
Release of the annual Container stevedoring monitoring report
3.98. The ACCC released its Container stevedoring monitoring report for 2013–14 on
30 October 2014. The ACCC prepares these monitoring reports annually under a
direction from the Federal Treasurer pursuant to Part VIIA of the CCA, which requires
that the ACCC monitors prices, costs and profits of container terminal operator
companies at the ports of Adelaide, Brisbane, Burnie, Fremantle, Melbourne and
Sydney.
Findings
CONTAINER STEVEDORING MONITORING REPORT NO.16
The ACCC found that increased competition in container stevedoring has
delivered benefits to users of stevedoring services and the wider
Australian community in 2013–14. Notably, stevedoring productivity has
improved, average prices have fallen and there was considerable
investment in container terminals.
However, the ACCC highlighted some risks to the industry’s future
performance – in particular, the potential the impact of labour outcomes
and port privatisations where adequate regard is not given to promoting
competition or the appropriate level of economic regulation.
There are three opportunities to improve productivity in landside
connections to container ports in order to handle expected growth in
container volumes. These opportunities are:
(1) reform of road provision and charging
(2) using pricing to allocate scarce capacity
(3) industry-led initiatives to improve landside container flows.
Water
Independent Review of the Water Act 2007
3.99. On 19 December 2014 the then Parliamentary Secretary to the Minister for the
Environment, Senator Simon Birmingham, released the final report of the
Independent Review of the Water Act 2007 (the review). This review was conducted
by an Expert Panel appointed by the Government.
3.100. The ACCC carries out a number of functions under the Water Act. These functions
include providing advice to the minister on the making of water market rules and
water charge rules, enforcement of any rules made, monitoring of regulated water
charges as well as preparing advice for the Murray-Darling Basin Authority on water
trading rules under the Basin Plan.
3.101. The review recommended, amongst other things, that the ACCC conduct a separate
review of the Water Charge (Infrastructure) Rules 2010, the Water Charge (Planning
and Management Information) Rules 2010 and the Water Charge (Termination Fees)
Rules 2009. The Expert Panel recommended that the rules be reviewed to assess
opportunities to reduce cost to industry and governments in their operation.
3.102. The ACCC received a request from the then Parliamentary Secretary to the Minister
for the Environment (Senator Birmingham) to prepare advice on possible amendment
55
of these water charge rules. In his request the Parliamentary Secretary asked that the
ACCC consider the issues raised in the review, as well as any other suggestions for
rule amendments that would improve regulatory clarity and efficiency, reduce
regulatory burden while maintaining effective standards.
3.103. The ACCC’s will provide its advice by the end of December 2015. In conducting the
review and developing its advice, the ACCC will consult widely with infrastructure
operators, irrigators, Basin State governments and other interested parties. Further
detail of how the ACCC will conduct the review will be announced in early 2015.
56
4.
Increasing engagement
Increase our engagement with the broad range of groups
affected by what we do
Outcomes from international forums and conferences
International partnerships and collaboration
4.1.
The ACCC regularly engages and exchanges information with other regulators
internationally on a range of matters, including product safety, consumer and
competition investigations and regulatory developments. This quarter the ACCC
received and responded to product safety related information requests from Canada,
Chile and Japan.
4.2.
In October 2014 the ACCC chaired a meeting of the Organisation for Economic
Cooperation and Development (OECD) Working Party on Consumer Product Safety
in Paris. The meeting discussed the progress of various projects including enhancing
the performance of the Global Recalls portal and approaches for addressing online
product safety issues. The next OECD Working Party meeting is scheduled for
18-19 May 2015.
4.3.
On 26 October 2014 AER staff attended the 29th meeting of the Energy Intermarket
Surveillance Group (EISG) in Washington with representatives of 13 electricity
markets from North and Latin America, South East Asia, Australia and New Zealand.
4.4.
The EISG is the peak and only international group that provides for co-ordination
between energy market surveillance and enforcement bodies, such as the AER.
EISG is a not-for-profit organisation that coordinates sharing of information and skills
between its members. The AER manages the non-public EISG website on the
group’s behalf so participants can exchange ideas between meetings.
4.5.
The EISG was established in 1999 in response to the development of market-based
arrangements for electricity around the world and the lack of a multi-jurisdictional
forum for practitioners to discuss how those markets were to be overseen. The
National Electricity Code Administrator (NECA) was a founding member and driver
behind the establishment of the group. The AER has continued this role and has
remained heavily involved.
4.6.
On 20-24 October 2014 the ACCC participated in the Autumn International Consumer
Protection Enforcement Network (ICPEN) Conference and Best Practice Workshops
in Stockholm, Sweden. The focus of the ICPEN event was Prioritisation: providing
national examples on how to identify consumer problems, prioritise and select cases
for enforcement, and Intermediaries; and providing national examples of how
authorities interact with intermediaries in a changing world. Google and Microsoft
presented to the plenary on their respective roles as international intermediaries.
4.7.
The ACCC chairs the Organisation for Economic Cooperation and Development
(OECD) Consumer Product Safety Working Party and participated in the Working
Party meeting in Paris on 23-24 October 2014. The Working Party is a key
mechanism through which the ACCC identifies product safety issues, progresses
collaborative approaches and implements activities at the international level.
4.8.
On 15-18 December the ACCC participated in a series of meetings of the OECD
Competition Committee (OECD CC) in Paris. The meetings provide an important
forum for discussion and debate on current issues in both competition and regulation,
57
and competition and enforcement. Major issues discussed in the OECD CC meeting
included: structural separation; intellectual property and standard settings; tenders
and auctions; and Use of markers in leniency. As part of the meetings Dr Walker was
re-elected as a member of the Bureau of the Competition Committee.
4.9.
In the December 2014 quarter the ACCC continued to engage closely with
competition and consumer protection counterparts around the world. The need for
international cooperation has grown as trading across jurisdictional borders has
become more frequent and consumers are exposed to more complex transactions
occurring across multiple jurisdictions. This particularly applies to trade with
Australia’s Asian neighbours, with the growth in trade and investment between
Australia and Asia expected to result in an increase in Australian competition matters
(such as merger and cartel investigations) that have an Asian nexus.
4.10. The ACCC regularly engages and exchanges information with other regulators
internationally on a range of matters, including product safety, consumer and
competition investigations and regulatory developments. This quarter the ACCC:

Received and responded to 19 requests for information from international
agencies including in Botswana, Canada, Chile, Iceland, Israel, Finland,
Germany, Mauritius, Netherlands, New Zealand, South Africa, and the UK.

Made 11 requests for information to agencies in Canada, Colombia, EU, New
Zealand, and the UK.
4.11. Recognising the value of effective competition and consumer protection regulation
and regional cooperation, the ACCC continues to commit efforts to relationship and
capacity building in the Asia-Pacific region and beyond. A key element of this work is
the Competition Law Implementation Program (CLIP), being implemented under the
Association of Southeast Asian Nations (ASEAN)-Australia and New Zealand FTA
Economic Cooperation Work Program (ECWP).
4.12. The focus of CLIP is to provide technical assistance and capacity building to support
the implementation of competition policy and law in ASEAN Member States. It does
this by providing tailored assistance that is relevant to the recipient jurisdiction. The
program will work to strengthen regional cooperation mechanisms, including
increasing cooperation on cross-border competition enforcement activities.
58
Activities
CLIP ACTIVITIES UNDERTAKEN IN THE QUARTER
Vietnam – Regional workshop on In-house Training Tools for
Competition Authorities
This workshop was held on 29-31 October in Nha Trang, Vietnam.
Officials from nine ASEAN Member States participated in the workshop,
which aimed to develop in-house capability with respect to human
resource development and knowledge management among ASEAN
competition agencies.
Lao PDR – The role of competition law in supporting Lao PDR’s
economic success
The first of three sub-regional workshops on the role of competition law
in supporting economic success was held on 4-5 November 2014, in
Vientiane, Lao PDR. The workshop aimed to promote understanding of
the benefits of markets, competition, and competition law for economic
development and Lao PDR. This activity includes two further workshops
to be held in Cambodia on 29-30 January and Myanmar on 2-3 February.
Close to 100 participants attended the Lao workshop, comprising
government officials and industry representatives from sectors interested
in the introduction of competition law.
4.13. This quarter the ACCC continued to progress organisation of the 2015 Annual
Meeting of the International Competition Network (ICN). This key international event
in competition policy and law enforcement will be hosted by the ACCC in Sydney
from 28 April-1 May 2015. More information about this global event is on the ICN
2015 conference website.
International cooperation
4.14. On 26-28 October the ACCC attended the 29th meeting of the Energy Intermarket
Surveillance Group (EISG) held in Washington DC. The EISG is the peak
international group providing for co-ordination between energy market surveillance
and enforcement bodies, such as the AER. The AER manages the non-public EISG
website on the group’s behalf so participants can exchange ideas between meetings.
4.15. In November 2014 Mark Pearson and Cristina Cifuentes attended the Regulatory
Policy Committee (RPC) and Network of Economic Regulators (NER) meetings at the
OECD in Paris. Major issues discussed in the RPC meeting included global trends
and challenges in regulatory policy; the use of evidence based policymaking;
regulatory impact assessments and their role; international co-operation with
international standard setting organisations (focus on mutual recognition
agreements); and sessions on ex-post evaluation and stakeholder engagement.
4.16. The key focus at the NER was the report on the performance assessment of the
Colombian telecommunications regulator and initial lessons from that assessment.
The Secretariat also provided a draft report and paper on the results of the product
market survey in regard to the independence, accountability and scope of action of
the regulators. There was some discussion of the Australian Regulator Performance
Framework and the interaction with the broader Commonwealth Performance
Framework. Importantly, Ms Cifuentes has now been accepted as the replacement
NER Bureau member, replacing Mark Pearson.
4.17. On 20-22 October 2014 the ACCC attended the 10th East Asia Top Officials Meeting
on Competition Policy (EATOP) and the IBA Annual Conference held in Tokyo,
Japan. EATOP aims to strengthen the cooperative relationship among competition
59
agencies and competition related authorities through candid exchange of views and
information with attendance of top-level officials from those agencies and authorities.
4.18. On 1-2 December 2014 the ACCC participated in the ICN Merger Working Group
Workshop held in New Delhi, India. Discussions at the two-day workshop focused on
the role of international cooperation in merger enforcement and remedy negotiation,
on building an effective framework for international cooperation in the areas of merger
remedies, and on outreach initiatives in the context of merger control.
4.19. The ACCC participated, as part of the Australian delegation, in the Regional
Comprehensive Economic Partnership negotiations, held in India on
1-5 December 2014.
4.20. On 8-9 December 2014 the ACCC attended the inaugural ASEAN Consumer
Protection Conference in Hanoi, Vietnam. This first conference marked a significant
milestone in the ASEAN-Australia Development Cooperation Program II, an
Australian aid program assisting the ASEAN region in achieving the ASEAN
Economic Blueprint agreed consumer protection priorities. The conference delivered
presentations on emerging themes in consumer protection in ASEAN; financial
transactions; consumer product safety, e-commerce, development of consumer
redress mechanisms, and institutionalising consumer protection in developing
countries.
Consumer engagement
Consumer Consultative Committee
4.21. The Consumer Consultative Committee (CCC) provides a forum to address
consumer protection issues and concerns collaboratively with consumer
representatives.
4.22. The final CCC meeting for 2014 was held on 5 December. The ACCC and ASIC
launched a revised version of the ‘Dealing with debt’ consumer guide. Members also
provided input into the joint ACCC-CCC research project into the debt collection
industry, with the lead researcher on the project providing an update on progress.
Product safety awareness raising
4.23. As part of the ACCC’s product safety awareness-raising activities, helping consumers
check for unsafe Christmas presents was a focus during the December period again
in 2014, with the ACCC promoting the safety steps in the ‘Safe Santa Checklist’. The
checklist and the Safe Santa YouTube video – which show how Santa and his elves
use the checklist to avoid giving unsafe gifts – were promoted online via the Product
Safety Australia website and ACCC Product Safety social media channels, including
Facebook, Twitter and YouTube. Safe Santa messages on Facebook and Twitter
gained around 278 000 impressions combined, while the video was viewed more than
15 000 times during December 2014 – nearly 70 per cent of the views it has had
since its December 2012 launch.
4.24. The ACCC reiterated its quad bike safety messages in the lead-up to the school
holidays, this time with a focus on child safety and tips for parents. Over the last four
years, almost one in five quad bike-related deaths has involved a child under 14
years old. The ‘Prepare safe, wear safe, ride safe’ messages and the ‘Quad bike
safety: Would you risk it?’ YouTube videos were promoted during December 2014,
with a media release issued on 5 December followed by social media messages
through all ACCC Product Safety channels and Google advertising. Facebook and
Twitter messages gained more than 275 000 impressions combined, while the
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YouTube video was viewed around 21 300 times during December 2014 – reaching
approximately 62 000 views since its April 2014 launch.
4.25. The ACCC and state and territory consumer affairs regulators partnered with Royal
Life Saving Society – Australia to educate consumers about the drowning dangers
associated with portable pools and provide tips and resources to help keep kids safe.
On 11 December 2014 the ‘Make It Safe’ campaign was launched with safety
messages promoted via the Royal Life Saving and Product Safety Australia websites,
a media release, a video infographic, fact sheets and social media.
4.26. Also in December 2014 the ACCC urged Australian consumers to be cautious of
flammable candle holders and decorations during the festive season. These candle
holders can pose a fire risk if they catch on fire for more than five seconds instead of
self-extinguishing. Although permanently banned, poorly-made new products and
designs continue to appear on the market during the festive season. As part of raising
awareness with Australian consumers, the media and social media on this issue was
complemented by a video showing just how quickly a novelty candle can pose a fire
risk. The video highlights a novelty spinning candle that starts a fire on the table soon
after lighting – a clear example of how dangerous these novelty candle holders can
be, potentially causing serious injuries.
4.27. The ACCC also raised awareness of product safety issues face-to-face with
consumers this quarter. The ACCC Product Safety Branch held an interactive stand
at the Melbourne Pregnancy, Babies and Children’s expo during 24-26 October to
promote safety messages and tools to parents, expectant parents and child carers
concerning dozens of different products. The ACCC Product Safety Stand received
approximately 3500 visitors over the three days and involved interactive displays of
the Keeping baby safe and Recalls Australia apps, demonstrations of the free ‘Choke
Check’ tool, and a live experiment showing how quickly lithium button batteries can
burn through ham – demonstrating what happens if the batteries are accidentally
swallowed.
4.28. The assessment of product safety issues which have the potential to cause serious
harm to consumers and the regulation of chemicals in consumer products are ACCC
priorities. Awareness-raising highlights during the quarter included staff presentations
to two seminars convened by analytical test houses and Deputy Chair Delia Rickard’s
presentation to the Accord Cosmetics Conference. Staff also attended the Australian
College of Toxicology and Risk Assessment (ACTRA) Toxicology and Chemical Risk
Assessment Symposium, and the Australian Pesticides and Veterinary Medicines
Authority’s (APVMA) Nanotechnology Regulation Symposium.
AER Customer Consultative Group
4.29. On 25 November 2014 the Australian Energy Regulator’s Customer Consultative
Group (CCG) held its third meeting for 2014. This was the first meeting of the CCG
since the appointment of the AER’s new Chairperson, Ms Paula Conboy. Ms Conboy
provided the group with an overview of the many electricity and gas reset processes
occurring in NEM jurisdictions, as well as current AER work in the wholesale and
retail energy markets, including the AER’s targeted review of retailers’ customer
hardship policies.
4.30. AER staff presented to the group on the AER’s 2013-14 Compliance Report, noting
the commencement of proceedings against Energy Australia for its alleged failure to
obtain the explicit informed consent of customers entering into market retail contracts.
The group also discussed the AER’s 2013-14 retail Market Performance and
Affordability Report, as well as the implications of technological innovations such as
electricity storage on the AER’s approach to retailer authorisations and exemptions.
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Other stakeholder engagement and consultation undertaken by the AER
4.31. AER staff held a stall at the Energy and Water Ombudsman of NSW’s (EWON) antipoverty forum on 16 October. This event aimed to raise awareness about issues
affecting consumers in financial hardship and topics discussed included how EWON
can help consumers, changes to debt collection and credit reporting laws, access to
hardship programs and the removal of electricity price regulation. The AER
distributed a range fact sheets and other resources for consumers and caseworkers.
4.32. On 20 November 2014, the AER convened a forum for energy retailers and
distributors. The forum included presentations on the AER’s issues paper for
regulating alternate energy sellers and the AER’s 2013-4 annual compliance and
performance reports.
4.33. In December, AER staff also attended the Queensland Government’s Consumer and
Industry Reference Group, a forum for stakeholders to provide direct input into key
aspects of government policy and decision making on issues related to the
commencement of the Retail Law in Queensland on 1 July 2015.
4.34. The AER made a presentation to Jemena’s Customer Council in December and
provided an overview of the national exemptions framework and what it means for
gas sellers and for gas customers in NSW.
Business engagement
Franchising Consultative Committee
4.35. The Franchising Consultative Committee (FCC) is a forum that facilitates consultation
and engagement with the franchising sector on a range of issues including
competition and consumer law. FCC members include franchisees, franchisors,
business advisors and researchers.
4.36. During the quarter the ACCC held two FCC meetings — one in October 2014, and a
special meeting in November 2014 at the request of members. Both meetings
revolved primarily around the introduction of the new Franchising Code. Members
were also given the opportunity to provide feedback on draft versions of the ACCC’s
guidance material on the new code.
Small Business Consultative Committee
4.37. The Small Business Consultative Committee (SBCC) was established to inform the
ACCC of emerging competition and consumer law issues relating to small
businesses. SBCC members are drawn from a range of sectors and include industry
associations, business advisers and academics. During the quarter, the ACCC held
one SBCC meeting, in October 2014, which focused on policy development updates
and the Harper Competition Policy Review.
Industry research
4.38. In July 2014 the ACCC commenced a research project into the debt collection
industry within Australia, a joint initiative between the ACCC and the CCC. The
purpose of the project is to examine various debt collection practices.
4.39. The research is intended to lead the ACCC and CCC members to a better
understanding of how the industry operates, in particular, the business models
adopted in the industry and the influence this may have on activities that take place
when collecting debts from consumers. The findings from the research will inform
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future planning for initiatives designed to address the problems or issues identified. It
is expected that the research report will be issued in June 2015.
4.40. The ACCC has also commenced preparation of its annual report to the Australian
Senate on anti-competitive and other practices by health funds and providers in
relation to private health insurance for the period 1 July 2013 to 30 June 2014.
4.41. Consultation with industry commenced on 3 December with the ACCC seeking
submissions from interested parties until 30 January 2015. It is expected that the
report will be issued in June 2015.
Government liaison
Submission to the Department of Infrastructure and Regional Development
Consultation on the Review of the Motor Vehicle Standards Act 1989 Act
4.42. In October 2014 the ACCC provided a submission to the Commonwealth Department
of Infrastructure and Regional Development on its Options Discussion Paper for the
2014 review of the Motor Vehicle Standards Act 1989 (MVSA).
4.43. The ACCC’s submission supports a reduction of barriers to the parallel importation of
vehicles and strengthening the MVSA recall powers, so that the Minister has this
ability to administer vehicle recalls and does not need to rely on the ACL provisions
and ACCC staff in administering vehicle recalls.
Free range eggs
4.44. In June 2014 consumer affairs ministers agreed that New South Wales would provide
options to ministers to enhance consumer confidence and certainty around egg
labelling.
4.45. This would include developing options to regulate egg labelling, including an option
for a national information standard on free range eggs under the ACL and
improvements to the existing Model Code of Practice for the Welfare of Animals –
Domestic Poultry 4th Edition.
4.46. Outcomes of legal proceedings being instituted by the ACCC against free range egg
producers will be taken into consideration in developing options and in the formulation
of a definition of the term ‘free range’.
4.47. The ACCC is participating in a Working Group tasked with developing these options
and has participated in several meetings in the reporting period.
Country of origin
4.48. The ACCC participated in a country of origin food labelling intergovernmental
Working Group chaired by the Department of Industry and the Treasury, and
including the Australian Customs and Border Protection Service, the Department of
Agriculture, the Department of Health, the Department of Foreign Affairs and Trade
and, Food Standards Australia New Zealand.
4.49. In November 2014 the Working Group met to discuss the Australian Government’s
response to the House of Representatives Standing Committee on Agriculture and
Industry’s report into Country of Origin Labelling for Food: A clearer message for
consumers.
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Voluntary Prescribed Grocery Industry Code of Conduct
4.50. Between 6 August 2014 and 12 September 2014 the Treasury went to formal
consultation on the Government’s Early Assessment Regulation Impact Statement
(RIS) for the draft Food and Grocery Code of Conduct (the Grocery Code).
4.51. This followed the initial release in November 2013 by The Hon Bruce Billson MP,
Minister for Small Business, of the initial draft Grocery Code of Conduct developed by
a working group including Coles, Woolworths and the Australian Food and Grocery
Council (AFGC).
4.52. The Government’s final decision about whether to proceed with the Grocery Code, in
the form of a Final Assessment RIS, is expected to be published in 2015.
Unfair contract terms and small business
4.53. In July 2013 Consumer Affair Ministers agreed to extend the unfair contract term
protections to small businesses and to the development of amending legislation to
extend the ACL.
4.54. The Treasury, on behalf of Consumer Affairs Australia and New Zealand, conducted
a consultation process on possible amendments including a business survey which
closed 1 August 2014.
4.55. In December 2014 the ACCC participated in a Working Group chaired by Treasury
and including State and Territory ACL Regulators to develop a response to the
consultation process and to further develop the extension of the unfair contract term
protections to small business.
Fuel price boards
4.56. In July 2013 Consumer Affairs Ministers discussed the value of having a national
information standard for fuel price boards to assist consumers to make better fuel
purchasing decisions through the provision of clearer, more standardised information.
4.57. In June 2014 ministers noted the desire not to duplicate regulations in place in
New South Wales, South Australia and parts of Western Australia, or to introduce
further regulation where the Australian Consumer Law may address issues of
concern. Ministers agreed to revisit the issue after the ACCC had been given an
opportunity to undertake further work in the area focusing on the prominence of
discounted prices and the potential to mislead consumers about the price they would
pay for fuel.
4.58. The ACCC is currently considering industry practices and the approach it may take in
relation to the issues involved.
Major speeches
4.59. During the December quarter the ACCC took part in 40 major speaking events,
including:
Food and grocery and Australia's Competition Law
Chairman Rod Sims
Australian Food and Grocery Council Industry Leaders Forum
1 October 2014
University of South Australia Workshop Regulator Update
Chairman Rod Sims
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12th Annual University of South Australia Competition and Consumer Workshop
10 October 2014
Carbon, mergers and other issues
Chairman Rod Sims
Annual Energy Users’ Association of Australia Conference
13 October 2014
Enforcing the Franchising Code: Recent activities and proposed reforms
Deputy Chair Michael Schaper
National Franchise Convention Legal Symposium
26 October 2014
Bringing more economic perspectives to competition policy and law
Chairman Rod Sims
RBB Economics Conference
7 November 2014
The future of competition policy and its implications for Australian agriculture
Chairman Rod Sims
Australian Farm Institute Roundtable
13 November 2014
Solving the multi-technology puzzle: The ACCC's perspective
Chairman Rod Sims
NBN Rebooted Conference
17 November 2014
Keynote Address
Deputy Chair Delia Rickard
Queensland University of Technology Consumer Law Roundtable
2 December 2014
Perspectives on the changing role of energy users
AER Chief Executive Officer Michelle Groves
2014 Annual Energy users Association of Australia Conference
14 October 2014
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5.
Appendices
Complaints and inquiries
5.1.
During the December 2014 Quarter the ACCC received 59 749 complaints and
enquiries from businesses and consumers (email: 21 164, telephone: 38 301, and
letter correspondence: 284).
5.2.
Of these, 296 were escalated for assessment.
Table 5: ACCC complaints, investigations and litigation funnel
December 2014
quarter
Category
Contacts received (phone, email and letters)
59 749
Contacts recorded in the database
40 687
Under assessments commenced
296
Initial investigations commenced
142
In-depth investigations commenced
23
Litigation commenced
9
Table 6: Geographic location of inquirers and complainants recorded in the national
database
State
ACL
Scams
(ACL +
Scams)
Anticompetitive
Practices
Industry
Codes
Other
Total
NSW
4 440
9 834
14 274
181
42
1 923
16 420
QLD
3 575
8 511
12 086
139
44
1 155
13 424
VIC
4 391
6 976
11 367
203
44
1 563
13 177
WA
1 529
3 437
4 966
64
16
485
5 531
SA
1 224
2 747
3 971
68
24
515
4 578
ACT
635
1 056
1 691
28
0
263
1 982
TAS
313
888
1 201
7
4
123
1 335
NT
164
348
512
8
0
52
572
Overseas
153
757
910
1
0
111
1 022
Not
Supplied
140
112
252
16
3
89
360
Note: single contacts may involve multiple issues
66
Table 7: Complaints and inquiries – top ten by industry
Industry
Contacts
Non-Store Retailing (predominantly online sales)
1 063
Misc. Electrical and Electronic Goods Retailing
768
On Selling Electricity and Electricity Market Operation
539
Supermarket and Grocery Stores
485
Wired Telecommunications Network Operation
415
Department Stores
402
Fuel Retailing
398
Motor Vehicle Manufacturing
379
Misc. Store-Based Retailing
321
Air and Space Transport
312
Note: single contacts may involve multiple industries
Table 8: Top scam categories reported to the ACCC
Scam category
Contacts
Attempts to gain your personal information (fake bank or telco,
computer hacking, ID theft)
6 311
Buying, selling or donating (classifieds, business listings,
auction, health, fake business etc)
5 782
Unexpected money (inheritance, helping a foreigner, fake
government or bank, loan opportunity)
5 724
Jobs & investment (sport, high return, pyramid scheme,
employment)
1 213
Unexpected Prizes (lottery, travel, scratchie)
978
Threats & extortion (malware and software by email, malware
and software by phone, hitman etc)
876
Dating and Romance (Including Adult Services)
594
67
Table 9: Top possible contraventions of the Competition and Consumer Act
(excluding scams)
Predominately fair trading and consumer protection
including Australian Consumer Law
Contacts
Misleading or deceptive conduct
4 155
Guarantee as to acceptable quality
3 281
Wrongly accepting payment
888
Safety Standards
794
Guarantee as to due care and skill
698
False representation price
457
Guarantee relating to the supply of goods by description, sample or
demonstration
411
Guarantee as to fitness for any disclosed purpose etc.
279
False representations goods - standard, quality, value, grade,
composition, style etc.
258
Recall of Consumer Goods
235
Predominately effective competition and informed markets
part IV and IVB
Contacts
Contravention of industry codes
177
Misuse of market power
136
Exclusive dealing
134
Enforcement outcomes and matters in court
Litigation commenced
Competition
Secondary boycotts
Exclusionary conduct
Cartels
Construction Forestry Mining and Energy Union
(CFMEU)
commenced
20 November 2014
jurisdiction
Federal Court Melbourne
Little Company of Mary Health Care Limited
commenced
10 December 2014
jurisdiction
Federal Court Sydney
OLEX Australia Pty Limited & Ors
68
commenced
4 December 2014
jurisdiction
Federal Court Melbourne
Consumer protection
Consumer protection
False or misleading
representations
Unconscionable conduct
Undue harassment or
coercion
Credence claims
False or misleading
representations
False or misleading
representations
Credence claims
Chrisco Hampers Australia Ltd
commenced
19 December 2014
jurisdiction
Federal Court Brisbane
CLA Trading Pty Ltd, trading as Europcar
commenced
10 November 2014
jurisdiction
Federal Court Perth
Coles Supermarkets Australia Pty Ltd and
Grocery Holdings Pty Ltd
commenced
16 October 2014
jurisdiction
Federal Court Melbourne
Construction Forestry Mining and Energy Union
(CFMEU)
commenced
20 November 2014
jurisdiction
Federal Court Melbourne
Derodi Pty Ltd and Holland Farms Pty Ltd
commenced
5 December 2014
jurisdiction
Federal Court Sydney
Dhruv Chopra (operator of Electronic Bazaar)
commenced
3 December 2014
jurisdiction
Federal Court Melbourne
EnergyAustralia Pty Ltd and Bright Choice
Australia Pty Ltd
commenced
21 November 2014
jurisdiction
Federal Court Melbourne
RL Adams Pty Ltd (trading as Darling Downs
Fresh Eggs)
commenced
12 December 2014
jurisdiction
Federal Court Brisbane
Other
False or misleading
Robert Paul Davies
69
evidence
commenced
2 October 2014
jurisdiction
Federal Court Brisbane
Litigation ongoing
Competition
Cartel
Air New Zealand Ltd
commenced
12 May 2010
jurisdiction
Federal Court Sydney
awaiting judgment
Cartel
Misuse of market power
Cartels
Australian Egg Corporation Limited
commenced
26 May 2014
jurisdiction
Federal Court Adelaide
Australia and New Zealand Banking Group Ltd
(appeal)
commenced
9 December 2013
jurisdiction
Federal Court Brisbane
Cement Australia Pty Ltd & Ors
commenced
12 September 2008
jurisdiction
Federal Court Brisbane
awaiting hearing on penalties
Cartels
Cartels
Highly concentrated sectors
Cartel
Misuse of market power
Colgate-Palmolive Pty Ltd & Ors
commenced
12 December 2013
jurisdiction
Federal Court Sydney
Flight Centre Ltd (Appeal)
commenced
17 April 2014
jurisdiction
Federal Court Brisbane
Informed Sources (Australia) Pty Ltd & Ors
commenced
19 August 2014
jurisdiction
Federal Court Melbourne
Omniblend Australia Pty Ltd
commenced
14 August 2014
jurisdiction
Federal Court Melbourne
Pfizer Australia Pty Ltd
commenced
13 February 2014
jurisdiction
Federal Court Sydney
70
Cartels
Prysmian Cavi e Sistemi
commenced
23 September 2009
jurisdiction
Federal Court Adelaide
continues following settlement with
some of the parties
Cartels
P.T. Garuda Indonesia Ltd
commenced
2 September 2009
jurisdiction
Federal Court Sydney
awaiting judgment
Misuse of market power
Cartels
Visa (Inc) & Ors
commenced
4 February 2013
jurisdiction
Federal Court Sydney
Yazaki Corporation & Australian Arrow Pty Ltd
commenced
13 December 2012
jurisdiction
Federal Court Sydney
Consumer protection
Carbon price
representations
Indigenous consumer
protection
Unfair contract terms
Actrol Parts Pty Ltd
commenced
30 April 2014
jurisdiction
Federal Court Adelaide
Adata Pty Ltd
commenced
20 June 2014
jurisdiction
Federal Court
Advanced Medical Institute Pty Ltd & Ors
commenced
21 December 2010
jurisdiction
Federal Court Melbourne
awaiting judgment
Fake testimonials
Consumer Guarantees
A Whistle (1979) Pty Ltd t/as Electrodry
commenced
1 July 2014
jurisdiction
Federal Court Sydney
Bunavit Pty Ltd (trading as Harvey Norman AV/IT
Superstore Bundall)
commenced
12 June 2013
jurisdiction
Federal Court Brisbane
awaiting judgment
Credence claims
Coles Supermarkets Australia Pty Ltd
71
commenced
12 June 2013
jurisdiction
Federal Court Melbourne
awaiting hearing on remedies
Credence claims
Consumer protection
Consumer protection
Drip pricing
Vulnerable and
disadvantaged consumers
Pyramid selling
Door to door selling
Energy savings
representations
Small business scam
DuluxGroup (Australia) Pty Ltd
commenced
5 December 2012
jurisdiction
Federal Court Perth
Fisher & Paykel Customer Services Pty Ltd &
Anor
commenced
12 November 2013
jurisdiction
Federal Court Sydney
Hillside (Australia New Media) Pty Ltd t/as Bet365
& Ors
commenced
13 August 2014
jurisdiction
Federal Court Melbourne
Jetstar Airways Pty Ltd
commenced
19 June 2014
jurisdiction
Federal Court Sydney
Lux Distributors Pty Ltd (appeal)
commenced
1 March 2013
jurisdiction
Full Federal Court Melbourne
Lux’s application for special leave
to appeal to the High Court was
dismissed with costs. The matter
will be remitted to the Federal Court
for a hearing on penalties.
Lyoness Australia Pty Ltd & Ors
commenced
28 August 2014
jurisdiction
Federal Court Sydney
Origin Energy Electricity Ltd & Ors
commenced
26 September 2013
jurisdiction
Federal Court Sydney
Origin Energy Limited
commenced
08 May 2014
jurisdiction
Federal Court Adelaide
Safety Compliance Pty Ltd & Ors
commenced
16 April 2012
jurisdiction
Federal Court Sydney
awaiting judgment on penalties
72
Scam
Credence claims
Online consumer issues
Consumer guarantees
Drip pricing
Product safety
Sensaslim Australia Pty Ltd & Ors
commenced
15 July 2011
jurisdiction
Federal Court Sydney
Snowdale Holdings Pty Ltd
commenced
9 December 2013
jurisdiction
Federal Court Pert
Spreets Pty Ltd
commenced
30 June 2014
jurisdiction
Federal Court Brisbane
Valve Corporation
commenced
28 August 2014
jurisdiction
Federal Court Sydney
Virgin Australia Airlines Pty Ltd
commenced
19 June 2014
jurisdiction
Federal Court Sydney
Woolworths Ltd
commenced
17 September 2014
jurisdiction
Federal Court Sydney
Other
False or misleading
evidence
Michael Anthony Boyle
commenced
16 September 2014
jurisdiction
Federal Court Brisbane
73
Litigation concluded
Competition
Cartels
Renegade Gas Pty Ltd, Speed-E-Gas Ltd & Ors
commenced
23 August 2012
concluded
24 October 2014
jurisdiction
Federal Court Sydney
outcome
Penalties totalling $8.3 million against
Renegade Gas Pty Ltd (trading as
Supagas NSW, a privately owned
company) (Renegade Gas), Speed-EGas (NSW) Pty Ltd (Speed-E-Gas) (a
wholly owned subsidiary of Origin
Energy Limited), and three current and
former senior officers of the two
companies for engaging in cartel
conduct.
Consumer protection
Consumer protection in the
energy sector
Consumer protection
Unconscionable conduct
Unconscionable conduct
AGL South Australia Pty Ltd
commenced
4 December 2013
concluded
16 December 2014
jurisdiction
Federal Court Adelaide
outcome
Court found that AGL SA had made
false or misleading representations
and engaged in misleading or
deceptive conduct; awaiting hearing on
penalties
Breast Check Pty Ltd
commenced
21 December 2011
concluded
3 October 2014
jurisdiction
Federal Court Perth
outcome
$100 000 penalties
Coles Supermarkets Australia Pty Ltd
commenced
30 April 2014
concluded
22 December 2014
jurisdiction
Federal Court Adelaide
outcome
$10 million penalty
Coverall Cleaning Concepts South East Melbourne
Pty Ltd & Ors
commenced
17 July 2014
concluded
12 November 2014
74
Product safety
Consumer protection
Credence claims
Telecommunications
jurisdiction
Federal Court Melbourne
outcome
$30 000 penalty and compensation
order
Dateline Imports Pty Ltd
commenced
25 June 2012
concluded
19 November 2014
jurisdiction
Federal Court Brisbane
outcome
$85 000 penalties
Homeopathy Plus! Australia Pty Ltd & Ors
commenced
19 February 2013
concluded
23 December 2014
jurisdiction
Federal Court Sydney
outcome
Court found that the parties had
engaged in misleading and deceptive
conduct and made false or misleading
representations; awaiting penalty
hearing
Reebok Australia Pty Ltd
commenced
17 December 2013
concluded
23 October 2014
jurisdiction
Federal Court Perth
outcome
$350 000 penalty; refund orders;
compliance program order; costs
Zen Telecom Pty Ltd
commenced
28 February 2014
concluded
1 October 2014
jurisdiction
Federal Court Perth
outcome
$225 000 penalties; corrective
notices; costs
75
Undertakings accepted and infringement notices paid
87B Undertakings
Competition and Consumer Act
‘To promote vigorous lawful competition and informed markets’
Resale price maintenance
Italiatech Australia Pty Ltd (Italiatech) and TMO
Sports Pty Ltd (TMO)
S87B undertaking dated 11 December 2014
Italiatech Australia Pty Ltd (Italiatech) and TMO Sports
Pty Ltd (TMO), two importers and wholesale distributors
of bicycle parts and accessories to retailers Australia
wide, have undertaken to:
not engage in resale price maintenance for a period of
five years
write to their retailer customers informing them of the
undertaking and their freedom to determine resale prices
implement and maintain training programs for current
and future staff
include statements with list pricing informing customers
that references to resale prices are only
recommendations and that there is no obligation to
comply with the recommendation.
Exclusive dealing and
exclusionary arrangements
Standard White Cabs Limited
S87B undertaking dated 15 October 2014
Standard White Cabs Limited, trading as Townsville
Taxis undertook to ensure that its affiliated drivers are
free to lawfully use a third party booking application
and/or a mobile telephone to receive taxi bookings from
customers, and will provide them with notice of the
undertaking.
Townsville Taxis will also implement a competition and
consumer law compliance program designed to minimise
its risk of future potential breaches of the CCA.
Australian consumer law
‘To encourage fair trading, protection of consumers and product safety’
Unconscionable conduct
Coles Supermarkets Australia Pty Ltd
S87B undertaking dated 16 December 2014
In addition to the orders made by the Federal Court on
22 December 2014, Coles gave a court enforceable
undertaking to the ACCC which provides for the
establishment of a formal process overseen by an
Independent Arbiter that will allow for a review of the
eligibility of:

over 200 smaller suppliers (categorised by Coles as
Tier 3 Suppliers) to obtain refunds of any amounts
by which their ARC rebate payments exceeded the
benefits which they obtained from the ARC program

suppliers referred to in the second proceedings in
76
respect of which Coles has made admissions in the
relevant Statement of Agreed Facts and Admissions
filed with the Court to obtain possible payments.
False or misleading
representations
Invocare Limited
S87B undertaking dated 14 November 2014
InvoCare has undertaken for a period of three years not
to require any customer to purchase a memorial,
including customers who are parties to existing contracts
which contain such a requirement. Customers who
choose to purchase a bronze plaque memorial may now
purchase it from Invocare or another supplier, subject to
pre-approval and payment of a placement fee.
False or misleading
representations
Living Social Pty Ltd
S87B undertaking dated 18 December 2014
LivingSocial Pty Ltd (LivingSocial) has undertaken that it
will:
Product safety

not make false or misleading representations with
respect to price, or rights, remedies or guarantees,
including consumer guarantees under the ACL

give voucher purchasers refunds in all
circumstances where they are entitled to a refund in
accordance with LivingSocial’s terms and conditions
and/or the consumer guarantee provisions of the
ACL

display prices of deals inclusive of all mandatory
additional fees except for delivery fees, the minimum
charge for which will otherwise be specified if known
at the time of publication

use only comparison pricing statements that are not
misleading in representing the savings that could be
achieved

send emails to all LivingSocial subscribers when
substantive updates are made to its terms and
conditions

send an email to all LivingSocial subscribers
containing a corrective notice

develop and implement a compliance program.
Toys “R” Us Australia Pty Ltd
S87B undertaking dated 29 October 2014
Toys “R” Us Australia Pty Ltd undertook to provide
further notices to consumers about the recall, to continue
to offer free collection of affected cots and refunds to
customers, and to implement a consumer law
compliance program with a particular focus on
enhancing its product safety procedures.
77
Infringement notices
Trader
Date paid and amount
Hume Import & Export
(Australia) Pty Ltd
1 December 2014
Invocare Limited
17 November 2014
1 notice totalling $10 200
1 notice totalling $102 000
Telstra Corporation Limited
16 December 2014
1 notice totalling $102 000
Toys “R” Us Australia Pty
Ltd
30 October 2014
1 notice totalling $10 200
78