The Australian Competition and Consumer Commission’s
accountability framework for investigations
The ACCC’s accountability framework for investigations
1. INDEPENDENT ACCC, COMMISSION, STAFFING AND STRUCTURE
2. TRANSPARENT ARTICULATION OF ORGANISATIONAL PRIORITIES
3. IDENTIFYING AND ASSESSING CONDUCT OF TRADERS UNDER THE COMPETITION AND CONSUMER ACT
4. CONDUCTING INVESTIGATIONS AND REVIEWS
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5. COMPLIANCE AND ENFORCEMENT OPTIONS
6. CHECKS AND BALANCES
7. INFORMATION HANDLING
8.
PUBLICATION OF COMPLIANCE AND ENFORCEMENT OUTCOMES
9. EVALUATION AND REVIEW
10. PUBLIC ACCOUNTABILITY
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The ACCC’s accountability framework for investigations
Introduction
The Australian Competition and Consumer Commission is an independent Commonwealth statutory authority
whose role is to enforce the Competition and Consumer Act 2010 and a range of additional legislation,
promoting competition and fair trading, protecting consumers and regulating national infrastructure1. The ACCC
has offices throughout Australia, and is represented in every state and mainland territory of Australia. The
national office is located in Australia’s capital city, Canberra.
This document outlines the governance and management structures and the systems and processes
that enable the ACCC to exercise its powers as a competition and consumer agency in a transparent and
accountable manner.
Some of these systems and processes bind all agencies of the Australian Government, such as processes
for the selection and appointment of staff, or the use of legal services. Others are particular to the ACCC,
such as many of the processes that the ACCC undertakes in exercising its enforcement functions. The full
spectrum of these accountability and transparency approaches, spanning from the establishment of the ACCC,
the appointment of Commissioners and staff, corporate planning, investigative procedures, and finally public
reporting of decisions and outcomes, are discussed in the chapters to follow.
1 The ACCC works closely with another independent statutory authority, the Australian Energy Regulator (AER). The AER is also established under the Competition and Consumer
Act. The AER is Australia’s national energy regulator and its functions are set out in national energy market legislation and rules. These functions relate mostly to electricity and gas
markets in eastern and southern Australia. While specific functions vary according to the legislated responsibilities that underpin the ACCC and AER, the two bodies share many
common objectives, both working to protect, strengthen and supplement competitive market processes. The AER and ACCC also share resources and staffing and some of the
ACCC’s operational guidelines and policies are joint ACCC and AER publications.
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Background
References within this document assume some knowledge of Australia’s competition legislation, as well as its
government and legal systems. To assist the reader, a brief explanation of these references is outlined below.
Australia’s competition legislation—the Competition and Consumer Act
The Competition and Consumer Act came into force in January 2011, superseding the Trade Practices Act
1974. The object of the Competition and Consumer Act is to enhance the welfare of Australians through the
promotion of competition and fair trading and provision for consumer protection.
Enforcement provisions: detecting, pursuing and stopping anti-competitive conduct
Part IV of the Competition and Consumer Act contains the substantive provisions of the Act that protect and
enhance competition. It includes provisions against:
• anti-competitive contracts, arrangements and understandings
• cartel conduct, including price fixing, market sharing, restricting outputs and bid rigging
• exclusionary arrangements
• exclusive dealing
• misuse of market power
• resale price maintenance, and
• secondary boycotts affecting competition.
Assessing mergers
Section 50 of the Competition and Consumer Act, also contained within Part IV of the Act, prohibits
anti-competitive mergers or acquisitions. In accordance with this provision, ACCC staff assess completed and
proposed mergers and make recommendations to the ACCC about whether the ACCC should take legal action
to prevent or undo a merger.
Authorisations and notifications of conduct that may breach the Competition and Consumer Act
Parties who engage in anti-competitive conduct in breach of the Competition and Consumer Act risk legal
action by the ACCC or private parties. There are significant civil and criminal penalties for breaches of the
competition provisions of the Competition and Consumer Act.
Conduct which may otherwise be anti-competitive can however provide benefits that may offset or outweigh
the detrimental effect of the conduct on competition. Part VII of the Competition and Consumer Act contains
provisions that allow parties to these arrangements to apply for protection from legal action for conduct where
the public benefits outweigh any public detriment.
There are two processes under which legal protection may be obtained—these are known as ‘authorisation’ and
‘notification’. The relevant process will depend on the type of conduct for which legal protection is sought. More
information about authorisations and notifications is available in Chapters 3 and 4.
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The Australian Consumer Law
In addition to provisions which promote lawful competition, the Competition and Consumer Act contains a
national law known as the Australian Consumer Law (ACL), which is designed to protect consumers and ensure
fair trading. The ACL, which forms Schedule 2 of the Competition and Consumer Act, is a single national law
which ensures that consumers have the same protections, and businesses have the same obligations and
responsibilities, across Australia.
Each of Australia’s state and territories has implemented the ACL. State and territory consumer affairs agencies
administer this legislation within their jurisdiction. As this document is designed to address the ACCC’s exercise
of its competition powers, it does not provide commentary on all of the enforcement powers and processes
which are available under the ACL.
Australia’s government—federal system
Australia has a federal system of government with six states and two territories. Australia’s national government
is often referred to as the Commonwealth Government. Each of the states and territories also has their own
governments and parliaments. References to ‘whole of government’ legislation refers to legislation that applies
to all Australian Government agencies including the ACCC.
Australia’s legal system
Australia has a common law legal system. A key feature of this system is that judges’ decisions in cases are
informed by legal precedent, that is, the decisions in previous cases. Australia also has an adversarial court
system, whereby two opposing parties present their cases before an impartial judge or jury. Laws are made by
the federal and state parliaments, and an independent judiciary interprets and applies them.
Australia’s highest court is the High Court of Australia, which interprets and applies the laws of Australia, decides
cases of federal significance, and hears appeals from the federal, state and territory courts. Australia has a
number of Federal courts, including the Federal Court of Australia. In addition, each state and territory has its
own independent court system.
Matters dealt with by the ACCC that proceed to litigation are in most cases heard before the Federal Court of
Australia. The Federal Court has jurisdiction for most civil matters arising under Australian federal law and some
summary criminal matters.
The Australian Competition Tribunal, a tribunal administered by the Federal Court, hears applications for review
of determinations of the ACCC which grant or revoke authorisations. As noted above, these authorisations
permit conduct and arrangements that, because of their anti-competitive effect, would otherwise be prohibited
under the Competition and Consumer Act. The Tribunal also hears applications for review of determinations of
the Commission which grant or refuse clearances for company mergers and acquisitions.
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Chapter 1: Independent ACCC, Commission, staffing
and structure
The ACCC structure is established under the Competition and Consumer Act. This structure provides for a clear
separation of decision making between the ACCC’s ultimate decision making body, the Commission, and ACCC
staff, who have responsibility for the day to day business and investigations of the ACCC.
1.1
ACCC established under statute
The ACCC is an independent statutory authority2 whose role is to enforce the Competition and
Consumer Act and a range of additional legislation which collectively promote competition, fair trading
and regulate national infrastructure. The ACCC’s powers and functions, as well as its governance
structure, are drawn from various provisions within the Competition and Consumer Act.
1.2 Appointment of Chairperson and Commissioners through transparent and consultative process
The ACCC’s Chairperson and Commissioners are appointed by Australia’s Governor-General for a term
of up to five years. These appointments are made following a recommendation by the relevant Minister
that the nominated person qualifies for the appointment on the basis of their relevant knowledge or
experience, and after all Australian states and territories have been consulted and have confirmed their
support for the appointment.
The Governor-General may also appoint a Deputy Chair to the Commission, and the Minister may
appoint associate Commissioners to the Commission.
The Chairperson and Commissioners are expected to adhere to the ACCC’s Code of Conduct for
Commission Members and Associated Members 2012.
The ACCC’s Commission currently comprises the Chairperson, two Deputy Chairpersons and five
full-time Commissioners.
2
A government entity established by legislation to administer laws of the Commonwealth of Australia.
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1.3
Governance structure—separation of decision making
The ACCC’s governance structure is outlined in the Competition and Consumer Act. This structure
provides for a separation of the decision making powers of the ACCC. Except when they have
delegated to others, the Commissioners, sitting as the Commission, have the ultimate decision making
responsibility for decisions made under the Competition and Consumer Act. ACCC management and
staff are responsible for conducting investigations and making recommendations to the Commission on
matters before the Commission, as well as carrying out other day to day functions of the ACCC as an
agency. The separation of this decision making authority is established through the ACCC’s legislative
framework, with the ACCC’s and its Chairperson’s powers contained in the Competition and Consumer
Act. The ACCC’s staff are employed under different legislation, the Public Service Act 1999. The
Chairperson of the ACCC is, however, the head of the ACCC as an agency under the Public Service
Act and the Financial Management and Accountability Act 1997. The Chairperson delegates most of his
powers as agency head to the Chief Executive Officer of the ACCC.
The ACCC’s Commission meets regularly, usually weekly, to make decisions on matters investigated
by the ACCC under the Competition and Consumer Act. The meetings are usually chaired by
the Chairperson and must include at least two of the full time members of the Commission. The
Commission considers and provides direction on matters brought before it by ACCC staff, which may
include proposed enforcement action (including whether to institute court proceedings in a matter),
reviews of merger cases, authorisation applications and notifications, and decisions about access to
infrastructure facilities.
In assisting the Commission in its decision making functions, the ACCC has five specialist committees
in the areas of compliance and enforcement, mergers, telecommunications, adjudication and regulated
access, which consider particular issues arising in these areas and make recommendations about
appropriate courses of action to the Commission. These committees include full-time Commission
members and as appropriate associate or ex officio Commissioners who have expertise in
particular matters.
Organisational structure of the ACCC/AER
The ACCC’s organisational chart as at September 2012 is below.
As of 7 August 2012
Australian Competition and Consumer Commission
Chairman
Rod Sims
Deputy Chairs
Michael Schaper
Delia Rickard
Members
Sarah Court
Joe Dimasi
Jill Walker
Edward Willett
Australian Energy Regulator
Chairman
Andrew Reeves
Associate Members
Christopher Chapman
Andrew Reeves
Mark Berry
Cristina Cifuentes
Chief Executive Officer
Brian Cassidy
Deputy Chief Executive Officer Competition and Consumer
Rayne de Gruchy
Enforcement & Compliance Division
Marcus Bezzi
Executive General Manager
Enforcement Operations Group
Scott Gregson
Group General Manager
Enforcement
Operations—ACT &
National Projects
Brenton Philp
General Manager
Enforcement
Operations—NSW
Geoff Williams
General Manager
Enforcement
Operations—WA
Sam Di Scerni
General Manager
Enforcement
Operations—NT
Derek Farrell
Regional Director
Air Cargo Cartel
Litigation
Mike Kiley
General Manager
Enforcement
Paul Zawa
General Manager
Tasmanian Regional
office
Mark Quinane
Regional Director
Enforcement
Operations—QLD
Alan Ducret
General Manager
North Queensland
Regional office
Michael Dowers
Director
Compliance, Operations
Group
Nigel Ridgway
Group General Manager
Compliance Strategies
Branch
Kim Parker
General Manager
Intelligence, Infocentre
& Policy Liaison Branch
Bruce Cooper
General Manager
Product Safety Branch
Ruth Mackay
General Manager
Office of the CEO
Mergers & Adjudication
Group
Rose Webb
Executive General
Manager
Investigations Branch
Rami Greiss
General Manager
Branch
Suzie Copley
General Manager
Adjudication Branch
Richard Chadwick
General Manager
Competition
Unit
Corporate Division
Jo Schumann
Executive General
Manager
Finance
& Corporate Services
Adrian Brocklehurst
General Manager
Human Resources
Branch
Michelle Patterson
General Manager
Secretary of the
Commission
Information
Management
& Technology
Services Branch
Adrian Walkden
Chief Information
Strategic
Communications
Branch
Kristen Hannah
General Manager
Legal Group
Tim Grimwade
Executive General
Manager
Deputy Chief Executive Officer Regulation
Mark Pearson
AER
Michelle Groves
Wendy Peter
General Counsel
Wholesale Markets
Branch
Tom Leuner
General Manager
Peter Toy
Deputy General
Counsel
Retail Markets Branch
Sarah Proudfoot
General Manager
Sean King
Deputy General
Counsel
Network Regulation
Branch
Warwick Anderson
General Manager
Elissa Keen
Deputy General
Counsel
Tanya Dunne
Deputy General
Counsel
Peter Renehan
Special Counsel
Members
Edward Willett
Cristina Cifuentes
Regulatory
Development Branch
Anne Plympton
General Manager
Fuel, Transport &
Prices Oversight
Branch
Matthew Schroder
General Manager
Water Branch
Sebastian Roberts
General Manager
Network Operations &
Development Branch
Chris Pattas
General Manager
Communications
Group
Michael Cosgrave
Group General Manager
Access Operations
Rob Wright
General Manager
Convergence
Clare O’Reilly
General Manager
Enforcement
Operations—SA
George Kamencak
Regional Director
Industry Structure
Sean Riordan
General Manager
NBN Engagement
Branch
Richard Home
General Manager
ACCC_08/12_557
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1.4
ACCC employees employed by the Australian Public Service and covered by the Code of Conduct and other whole of government legislation
Staff of the ACCC are members of the Australian Public Service and employed under the
Public Service Act 1999. As public servants engaged under this Act, ACCC staff must adhere to the
Australian Public Service Code of Conduct and Values
ACCC staff must also follow and abide by Australian Government legislation which ensures
Australian Government employees act in an accountable and transparent manner and in the
public interest. The Financial Management and Accountability Act 1997, for example, sets out the
financial management, accountability and audit obligations of agencies that are financially part of the
Commonwealth. This Act requires that public resources are managed efficiently, effectively and ethically
and that proper accounts and records of receipt are kept in respect of any expenditure of public money.
In addition, chief executives of Commonwealth agencies are accountable to the Commonwealth
Finance Minister, who is entitled to full and free access to agencies’ accounts and records, subject to
any law that prohibits disclosure of particular information. Other Commonwealth legislation outlines
standards and requirements in the areas of recording keeping, information sharing, use of legal services
and reporting (see Chapters 6, 7 and 10). For the ACCC, the Chairperson is the head of the agency
and has ultimate responsibility for carrying out obligations under the Financial Management and
Accountability Act and the Public Service Act.
In addition, the ACCC’s enterprise agreement, which is negotiated between ACCC staff and
management, outlines the terms and conditions of employment at the ACCC and is publicly available
on the ACCC’s website.
1.5
ACCC corporate values
In addition to upholding the Australian Public Service Values the ACCC has identified additional
complementary values which the ACCC considers are unique and meaningful to its work and culture as
an organisation. They are:
• Independent: We pursue the interests of the Australian community, objectively and transparently.
• Expert: We make timely decisions based on evidence and rigorous analysis.
• Strategic: We make best use of our resources by taking considered and targeted action.
• Trustworthy: We communicate honestly and directly and act respectfully.
1.6
Employees recruited under a transparent merit based process
Under the Public Service Act 1999, Australian Public Service agency heads (including the ACCC
Chairperson) have responsibility for employment decisions, including recruitment and selection
decisions, affecting their agency. These decisions must comply with the Public Service Act, the Public
Service Regulations 1999 and the Public Service Commissioner’s Directions 1999.
The Australian Public Service Values require that all employment decisions in the Australian Public
Service are based on merit and that all eligible members of the Australian community have a reasonable
opportunity to apply for Australian Public Service employment. Merit-based decisions are required, at
a minimum, to be made following an assessment of a person’s work-related qualities and the workrelated qualities required for efficient and effective organisational performance.
Decisions relating to engagement and promotion require a competitive assessment of the relative
suitability of candidates against the genuine requirements of the duties, focusing on the capacity of
candidates to achieve outcomes related to the duties.
The Australian Public Service recruitment processes can be found at the following link:
www.apsc.gov.au
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1.7
Declaration of conflicts of interest by Commissioners and staff
The ACCC Commissioners and staff are required by their respective Codes of Conduct to disclose
and take reasonable steps to avoid any conflict of interest, real or apparent, in connection with their
duties. The ACCC achieves this by Commissioners and staff completing and submitting an on-line
conflict of interest self assessment module within one month of commencing work at the ACCC, in
July of each year, after a change of circumstances, and when otherwise requested by the ACCC’s
Corporate Division.
If, at any time, a Commissioner or staff member identifies an issue of real or apparent conflict of interest,
they must bring the issue to the attention of their manager to take appropriate action.
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Chapter 2: Transparent articulation of organisational
priorities
Each year the ACCC’s corporate and organisational intentions and expected expenditure are published in public
documents. The ACCC’s outcomes are reviewed and reported at the end of the year. The ACCC develops
and implements an annual corporate plan to achieve its goals. Programs and projects are managed through
an internationally recognised framework. All staff contribute to the ACCC achieving its outcomes through an
organisation wide individual performance management framework.
2.1
Portfolio Budget Statement
The ACCC, along with all Australian Commonwealth agencies, publishes its intended annual
expenditure for each financial year in a Portfolio Budget Statement. The projected expenditure is
based on the ACCC’s expected revenue which is received via allocations through the Commonwealth
Government’s annual budget processes. Portfolio Budget Statements are publicly available on the
internet and are submitted for consideration to the Parliament. As a portfolio agency of the Australian
Treasury, the ACCC’s Portfolio Budget Statement is published along with other Treasury portfolio
agencies on the Treasury’s website.
Following the end of each financial year the ACCC publishes an Annual Report which, among other
things, reports on how the ACCC’s actual expenditure compares to its projected expenditure, as
outlined at the commencement of the financial year in the Portfolio Budget Statement. More information
about the ACCC’s Annual Report is at Chapter 10.
2.2
Corporate Plan
The ACCC’s Corporate Plan sets out the ACCC’s purpose and goals and the strategies it will pursue
in the coming financial year. It also sets out the actions the ACCC will take under those strategies. The
ACCC Corporate Plan for 2012-2013 is available on the ACCC website.
2.3
Compliance and Enforcement Policy
Each year, the ACCC reviews and updates its Compliance and Enforcement Policy. This policy is
described in more detail in Chapter 3. The delivery of outcomes under the policy is reinforced through
the ACCC’s Corporate Plan and subsidiary business plans.
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2.4
Annual business plans
Every financial year, each division within the ACCC prepares a business plan which provides further
detail about how the division intends to implement particular strategies and actions aligned with
the ACCC’s Corporate Plan. These plans assess external and organisational risks associated with
undertaking the ACCC’s activities. These plans are not made publicly available but are accessible by all
ACCC staff. In this way, ACCC staff have available to them information about how each division within
the ACCC collectively works towards the organisation’s broader goals.
2.5
Activities managed in accordance with portfolio, program and project management principles
The ACCC has adopted the internationally recognised Portfolio, Programme & Project Management
Maturity Model (P3M3®). A P3M3 assessment has been conducted to assess the portfolio, program
and project sub-models and to identify strengths, weaknesses and opportunities for improving
capability that have a direct impact on the ACCC’s capacity to effectively manage change. At the
project level, the ACCC has implemented the PRINCE2 methodology. This methodology has been
tailored to the needs of the ACCC and is being applied to projects, with a focus on high risk and/or high
value projects. Examples of projects using the methodology include:
• a project to enhance the ACCC’s effectiveness in detecting, pursuing and stopping cartels
• a project to increase the knowledge and awareness of consumers, retailers and manufacturers about
their rights and obligations under the consumer guarantees provisions of the Australian Consumer
Law, and
• a variety of IT related projects. The implementation of the methodology is being managed by a dedicated project management office
and is supported by senior executives. 2.6
Individual Performance Framework to encourage quality performance and skill development and manage under-performance
All Australian Public Service agencies are required to have a fair and open performance management
framework (referred to in the ACCC as an individual performance framework). The requirements
are set out in the Public Service Commissioner’s Directions 1999 and the Australian Public Service
Bargaining Framework.
The ACCC’s performance management framework supports performance at the individual level and
provides the opportunity for staff and their supervisors to discuss and confirm their respective role and
contribution to the ACCC’s broader business outcomes. The objective of the framework is to enhance
productivity, accountability, leadership and learning and development. Central to this process is the
completion of an Individual Action Plan which is followed up by periodic discussions between a staff
member and their manager to review progress against the undertakings in the Individual Action Plan.
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Chapter 3: Identifying and assessing the conduct of
traders under the Competition and Consumer Act
The ACCC endeavours to ensure its approach to identifying and assessing potential contraventions of the
Competition and Consumer Act are handled in a consistent and high quality manner.
Transparency and accountability in these processes is achieved through the capture of information from all
contacts into an organisational wide database, guidance to staff to ensure consistency in their procedures
in assessing that information for potential investigation, the publication of the ACCC’s approaches to both
compliance and enforcement and to mergers, authorisations and notifications, by applying a procedure to the
escalation of matters and by formal oversight of decisions relating to the progress of escalated matters.
3.1 ACCC approach to prioritising compliance and enforcement published in Compliance and Enforcement Policy
The ACCC’s approach to achieving compliance with the Competition and Consumer Act, as well as to
the exercise of the ACCC’s enforcement powers and functions are outlined in the ACCC’s Compliance
and Enforcement Policy.
The ACCC periodically reviews its enforcement and compliance priorities, following consultation with
industry, consumer and other stakeholder groups. The last revision of the ACCC’s Compliance and
Enforcement Policy was published in February 2013. The policy outlines the ACCC’s compliance and
enforcement priorities across the competition and consumer areas of interest. In the competition area
these priorities include addressing:
• conduct that may impede emerging competition involving online traders, and
• competition and consumer issues in highly concentrated sectors, in particular in the supermarket
and fuel sectors.
The ACCC pursues matters that fall outside these areas where they meet other factors outlined in
the Compliance and Enforcement Policy, such as misuse of market power (abuse of dominance),
cartels and other cases where the matter involves conduct of significant public interest or concern and
conduct resulting in substantial consumer or small business detriment. Where appropriate, the ACCC
may also pursue matters which will clarify aspects of the law, especially in relation to provisions of the
Competition and Consumer Act that have not been the subject of judicial consideration.
In undertaking any enforcement action, the ACCC ensures that the action is proportionate to the
conduct and resulting harm and that the ACCC’s enforcement powers are exercised independently, in
the public interest, with integrity and professionalism, and without fear, favour or bias.
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The Compliance and Enforcement Policy also outlines the principles underlying the ACCC’s approach
to compliance and enforcement. They include:
• Transparency: The ACCC’s decision making takes place within rigorous corporate governance
processes and is able to be reviewed by a range of agencies and the Courts, and the ACCC does
not do private deals, hence every enforcement matter that is dealt with through litigation or formal
resolution is made public.
• Confidentiality: In general, investigations are conducted confidentially and the ACCC does not
comment on matters it may or may not be investigating.
• Timeliness: The investigative process and the resolution of enforcement matters are conducted as
efficiently as possible to avoid costly delays and business uncertainty.
• Consistency: The ACCC does not make ad hoc decisions; it sets its focus clearly to give business
certainty about its actions.
• Fairness: The ACCC seeks to strike the right balance between voluntary compliance and
enforcement while responding to many competing interests.
3.2
National Infocentre
The ACCC Infocentre is the initial contact point for telephone, email and written enquiries and
complaints to the ACCC about competition, consumer and fair trading issues. ACCC staff working
in the Infocentre are required to have a good working knowledge of all ACCC functions and current
issues. All complaints are assessed against the ACCC’s Compliance and Enforcement Policy and,
where appropriate, escalated for further assessment or investigation.
3.3
Organisation-wide reporting database
Following receipt of a telephone call, email or written contact, Infocentre staff record the information
received from businesses and consumers in the ACCC’s contact database. This organisation-wide
database provides a consistent and transparent mechanism for recording all complaints, enquiries and
subsequent ACCC actions. Any matter that is escalated for investigation is recorded in the database
and staff also have access to the database for the purpose of analysing complaint trends, identifying
issues for further enquiry and developing compliance responses. Applications for authorisation,
notifications and merger assessments are also recorded in a database.
3.4
Consistent procedures for appropriate contact handling through staff training and guidance
Consistent procedures for handling contacts are ensured through robust staff training and guidance. Infocentre staff receive competency based training on the ACCC’s Compliance and Enforcement Policy,
quality standards relating to telephone calls and to entering information into the ACCC’s database. New staff work extensively with existing staff in their first few weeks on the job, after which time the
quality of their responses to complaints and enquiries are monitored on an ongoing basis. In addition,
comprehensive online resources are available to Infocentre staff for use when they are responding to
complaints and enquiries.
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ENFORCEMENT OF PART IV OF THE COMPETITION AND CONSUMER ACT
Most of the cases that the ACCC investigates under Part IV of the Competition and Consumer Act are initiated
by a pattern of enquiries and complaints received from the public about traders. In some cases the ACCC will
proactively initiate investigations if it identifies an issue of concern, regardless of the number of contacts it has
received on that issue.
3.5
Decisions to escalate and investigate matters made through considered process and by various Commission specialist committees as appropriate
If a person who contacts the ACCC’s Infocentre raises a concern or complaint about a trader’s conduct
which could amount to a breach of the Competition and Consumer Act the matter is considered via a
‘triage’ process in accordance with the ACCC’s Compliance and Enforcement Policy i.e. a process of
assessing priority for investigation.
If the conduct is initially assessed by the Infocentre as falling within the Competition and Consumer Act,
it is then considered at a weekly meeting of ACCC officers and senior management who assess the
allegation against the priority criteria set out in the Compliance and Enforcement Policy. If it is decided
that a matter requires further investigation, the matter is referred to an investigation team for their review
and initial consideration. If the investigation team considers the matter should be escalated to an ‘indepth investigation’, the matter is referred to the ACCC’s Enforcement Committee, which comprises the
ACCC’s Chairperson and a number of Commissioners (see Chapter 1). The Enforcement Committee
meets once a week to consider compliance and enforcement matters and the recommendations
made by the ACCC’s staff in relation to those matters. If the Enforcement Committee directs that the
investigation should be continued, staff then investigate the matter in accordance with the Australian
Government Investigation Standards and ACCC procedures (see Chapter 4). For a matter to proceed
to litigation in the courts, the Enforcement Committee will refer the matter for the consideration and
decision of the Commission.
ASSESSMENT OF MERGERS
Mergers are predominantly brought to the ACCC’s attention by merger parties who are requesting informal
clearance. While there are no pre-merger notification requirements in Australia, merger parties are encouraged
to, and often do, approach the ACCC as soon as possible when contemplating a merger that may raise
competition concerns. Alternatively, the ACCC may become aware of a merger proposal through media
speculation, from complainants, or from advice from other regulatory bodies.
3.6
ACCC’s approach to assessing mergers published in ACCC guidelines
The ACCC publishes its approach to reviewing mergers in the ACCC’s Merger Guidelines and in
the ACCC’s Merger Review Process Guidelines. These guidelines set out the general principles and
framework within which mergers are reviewed by the ACCC. Merger applications are considered on a
case by case basis on the merits of the application, according to the specific nature of the transaction,
the industry and the particular competitive impact likely to result in each case.
3.7
Assessment of mergers made through considered process and reviewed by Commission specialist committee as appropriate
The ACCC conducts reviews of mergers which have the potential to raise competition concerns. Most
mergers considered by the ACCC are prima facie not likely to raise competition concerns and are able
to be cleared by ACCC expeditiously after a brief desktop review by ACCC staff (pre-assessment). If the
pre-assessment review indicates that there may be competition issues that warrant further review, the
matter is escalated for investigation.
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There are avenues through which merger parties may have a proposed acquisition of a company or
business assessed by the ACCC under the Competition and Consumer Act. They include:
1. Informal assessment: In this process, the ACCC provides merger parties with its assessment
of whether the merger is likely to substantially lessen competition (and therefore whether the
ACCC would seek to block the acquisition by application to the Federal Court). This process
does not provide immunity to the parties considering a merger from proceedings by other
interested parties3.
2. Application for formal clearance of a merger: In this process the ACCC assesses an
application for formal clearance of a merger, to determine whether it would be likely to
substantially lessen competition in the relevant market. If formal clearance is granted, merger
parties are provided with legal protection from court action under section 50 of the Competition
and Consumer Act. If the ACCC denies formal clearance, the merger parties may apply to the
Australian Competition Tribunal (the Tribunal) for review of the ACCC’s decision4.
3. Application to the Australian Competition Tribunal: In this process the Tribunal assesses
an application for authorisation of a merger. If granted, this authorisation will provide legal
protection from court action under section 50. The Tribunal may grant authorisation if it is
satisfied that the proposed merger is likely to result in such a benefit to the public that the
merger should be allowed to occur. This test is broader than the competition test in section 50
and allows consideration of efficiency claims in circumstances where a merger may otherwise
substantially lessen competition5.
Most merger matters are considered by the Mergers Review Committee (see section 1.3), comprising
the Chairperson and nominated commissioners, with the Committee’s views being reported to the
full ACCC Commission. Matters of greater significance, for example, decisions to institute legal
proceedings, accept section 87B undertakings or to grant authorisations, are made by the full
Commission. In some cases of less significance and when the decision made is one not to engage in
further enquiries into a merger, that decision may be made by the Executive General Manager of the
Mergers and Adjudication Group.
All decisions that the ACCC makes following a public merger review are made publicly available on the
ACCC’s website. The ACCC may also review confidential proposals, however decisions in these cases
are not made public.
ADJUDICATION—GRANTING AN AUTHORISATION OR REVIEWING A NOTIFICATION
The ACCC is notified of adjudication matters by way of the parties submitting an application for authorisation or
lodging a notification. It is up to the parties involved to determine whether the conduct they propose to engage
in may be at risk of breaching the Competition and Consumer Act and therefore whether they need to apply for
authorisation or lodge a notification.
3.8
ACCC’s approach to assessing adjudication matters published in ACCC guidelines
All authorisations and notifications are considered by the ACCC according to the statutory process
and public benefit test set out in the Competition and Consumer Act. Further details are provided in
relevant ACCC publications including: Guide to Authorisation, Guide to Exclusive Dealing Notifications,
Guide to Collective Bargaining Notifications and Authorising and notifying disclosure of pricing and
other information.
3 Other parties may also apply to the Federal Court for a declaration or divestiture, and any person suffering loss or damage as a result of a merger that breaches section 50 can
apply for damages.
4 As at October 2012, there have been no applications made for formal clearance since this provision was introduced into the then Trade Practices Act 1974 (now the Competition
and Consumer Act) in 2007.
5 To date, there have been no applications made for merger authorisation made to the Tribunal since this provision was introduced into the then Trade Practices Act 1974 (now the
Competition and Consumer Act) in 2007. Prior to 2007, applications for merger authorisation were assessed and decided by the ACCC.
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3.9Authorisation applications and notifications assessed via a considered
process and reviewed by Commission specialist committee
as appropriate
There are two processes under which legal protection may be obtained – these are known as
‘authorisation’ and ‘notification’. Parties considering whether to lodge an application for authorisation or
a notification are encouraged to contact the ACCC before lodging for informal discussion and guidance
about process. The relevant process will depend on the type of conduct for which legal protection
is sought.
Authorisation
Authorisation is a process under which the ACCC may grant protection from legal action for potential
contraventions of certain provisions of the Competition and Consumer Act if it is satisfied the conduct
delivers a net public benefit.6 Authorisation may be sought in relation to any of the competition
provisions except misuse of market power.
Decisions to grant, revoke or vary an authorisation are made by the full Commission. The Adjudication
Committee (see section 1.3), which comprises nominated Commissioners, often considers
recommendations to grant, dismiss, revoke or vary an authorisation before it reaches the full
ACCC Commission.
Notification
Notification is an alternate process for obtaining protection from legal action for potential breaches
of the Competition and Consumer Act on net public benefit grounds, although a notification can only
be lodged for exclusive dealing conduct, certain collective bargaining arrangements and the private
disclosure to competitors of price information. In the case of notification, parties lodge the form
prescribed by the regulations notifying the ACCC of the conduct they are concerned about. Parties
should seek their own legal advice as to whether the conduct may contravene the Act prior to making
the notification. Unlike authorisations, once a valid notification is lodged, protection from legal action
automatically commences after 14 days, or in the case of certain exclusive dealing conduct (other than
third line forcing), immediately. If after reviewing the notification, the ACCC considers that the notified
conduct does not result in a net public benefit, the ACCC will move to revoke the notification.7
Decisions to revoke a notification are made by the full Commission, after consideration by the
Adjudication Committee.
Further information about the assessment process in relation to the merger provision and authorisation
and notification provisions of the Competition and Consumer Act are discussed in Chapter 4.
6 Applications for authorisation of mergers on public benefit grounds must be made to the Tribunal.
7 In general, the legal protection provided by an authorisation does not commence unless and until the ACCC grants authorisation.
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Chapter 4: Conducting investigations and reviews
Once a matter has reached investigation stage, the ACCC ensures its investigations are effectively managed and
progressed on the basis of robust economic and legal reasoning. Staff guidelines and policies are in place to
guarantee consistency and procedural fairness in the approach that staff take to investigating each matter.
4.1 Investigation plan developed and followed by trained investigators
To ensure investigations are managed effectively, ACCC investigators develop and follow an
investigation plan, which is a centralised resource available for all ACCC staff. Use of the investigation
plan provides a framework to ensure that:
• the investigation is conducted in a manner which takes into account the specific goals of the ACCC’s
intervention, noting that the goals are intended to respond to the perceived consumer detriment
arising from the conduct
• the investigation addresses all elements of a suspected contravention
• evidence is gathered in an effective manner and is carefully targeted to each element of the
suspected contravention
• the activities of multiple staff involved in an investigation are coordinated
• senior managers and relevant Commissioners are kept up to date about the progress of the
investigation and any key issues arising, and
• there is a clear record of the investigation in the event that there is a change in the staff conducting
the investigation.
ACCC investigators also receive targeted training so that they have the necessary knowledge and
skills to conduct effective investigations. The ACCC is introducing measures to formally accredit its
investigation staff against the Australian Government Investigation Standards. These standards will
require that staff receive a minimum level of relevant training before they are able to exercise the
enforcement powers provided by the legislation under which they operate. Staff in investigation teams
who have not attained this accreditation would be supervised by a qualified investigator.
4.2
Consistent procedures through staff training and guidance
In addition to the targeted training for ACCC investigators, the ACCC maintains a comprehensive online
‘toolbox’ which provides guidance on the processes involved in each stage of an investigation. The
toolbox also serves as a precedents database and further provides an avenue to share and consider
new or innovative investigative processes. The toolbox, which is available to all staff, assists the ACCC
in ensuring that its investigators take a consistent approach to undertaking investigations.
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4.3
Expert advice provided by Competition and Consumer Economic Unit, Competition and Consumer Law Unit and external law firms
To ensure the ACCC acts on the basis of robust economic and legal reasoning, ACCC staff receive, as
appropriate, legal advice from experts both within and outside the ACCC.
Economic
ACCC staff working in competition and consumer areas may seek specialist economic input from
the Competition and Consumer Economic Unit (the CCEU). The CCEU is a team of six competition
economists whose role is to provide specialist economic advice to ACCC staff and also to assist these
staff in:
• refining an understanding of the potential competitive effects of the conduct
• identifying relevant information and analytical frameworks that may assist in assessing the conduct,
and
• undertaking a quantitative analysis to assess the likely effects including, if relevant, the public benefits
and detriments of the conduct.
Legal
The ACCC receives legal advice from in-house lawyers and an external panel of independent law firms
and legal counsel.
Within the ACCC, the Competition and Consumer Law Unit (CCLU) provides legal services and
assistance to ACCC staff and the Commission. Its primary activities include drafting legal documents,
providing strategic legal advice, and assisting in the preparation and management of litigation.
In-house lawyers are functionally integrated on a national basis but there are lawyers geographically
located in most ACCC offices to ensure that specialist legal services are available to staff at all times. In
addition, ACCC Special and General Counsel provide additional high level, independent and strategic
legal advice on complex and significant issues.
External legal service providers are also engaged by way of a legal panel to provide assistance in
matters where additional resources are needed, or as required under the Legal Services Directions (see
section 6.2 for more information on the ACCC’s legal panel). In-house lawyers oversee the use and
management of external service providers.
In accordance with Australian Government policy, the ACCC can only institute court proceedings once
it has received written legal advice, usually from an external legal service provider, indicating that there
are reasonable grounds for starting proceedings (see section 6.4).
4.4
Evidence handling procedures
To uphold the integrity of any evidence obtained by the ACCC, the ACCC has developed
comprehensive evidence handling procedures and staff guidance. A key part of these procedures is
the use of a secure evidence storage room and the appointment of Evidence Officers in each of the
ACCC’s offices. The Evidence Officers assist staff to follow strict procedures for the storing, recording,
monitoring, reporting and use of evidence. Evidence Officers also have exclusive access to the secure
evidence storage rooms. Through these processes, the ACCC maintains a clear chain of custody and
any evidence in the ACCC’s control is preserved in its original form.
4.5
Language interpreters provided where required
In accordance with the principles of natural justice, the ACCC makes available translators and
interpreters to any parties involved in an investigation as appropriate. To ensure the highest standard
of translation services are provided, the ACCC uses translators that are accredited through Australia’s
only translation accreditation service, the Australian National Accreditation Authority for Translators and
Interpreters Ltd.
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MERGER INVESTIGATIONS
4.6
Consistent procedures in place for the review and investigation of mergers
All of the general principles discussed at 4.1–4.5 above apply to merger investigations. In addition,
when ACCC staff consider a merger proposal, all staff follow the process set out in the ACCC’s Merger
Guidelines and Merger Review Process Guidelines. The assessment process for merger investigations
is set out in the below chart:
4.7
Details of public merger reviews posted on ACCC’s Public Merger Register
The ACCC posts details on its website of all public merger reviews of proposed and completed mergers
during the review and following the decision. While there is no legislative requirement to maintain a
public register, the ACCC does so to assist in the transparency of its processes and decision making.
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At the start of a public review, the following details are ordinarily posted on the ACCC website:
• the names of the parties to the transaction
• the relevant industry involved
• ACCC staff contact details
• the commencement date of the review
• an indicative timetable of the ACCC’s review, and
• market enquiry details (if applicable). This may include a market enquiries letter outlining the key
issues on which comment is invited. No details will be posted on the identity of market participants
from whom comment are sought.
As the review progresses, the following details may also be posted on the merger register:
• a statement of issues (where necessary) outlining the basis and facts on which the ACCC has
come to a preliminary view, after a first round of market enquiries, that a proposed merger raises
competition concerns
• a public competition assessment (where appropriate) outlining the ACCC’s completed competition
analysis for specific mergers and merger proposals, or
• any court enforceable undertakings offered under section 87B of the Competition and Consumer
Act. Such undertakings are posted when they are being considered as a proposed remedy and
are subject to market enquiries, and also later once they have been accepted by the ACCC in final
resolution of the matter.
ADJUDICATIONS: AUTHORISATIONS AND NOTIFICATIONS
All of the general principles discussed at 4.1–4.5 above apply to the review and consideration of authorisation
applications and lodged notifications. When assessing authorisation applications or notifications, ACCC staff
follow the process and apply the relevant tests that are set out by the Competition and Consumer Act and
which is explained in the ACCC’s guidelines on authorisations and notifications (see section 3.8). The processes
for authorisations and notifications are outlined below.
4.8
Consistent procedures in place for the consideration of authorisation applications and lodged notifications
Authorisations
The authorisation process begins once a valid application and supporting submission have been lodged
and the appropriate fees paid.
The ACCC then:
• invites interested parties to lodge written or oral submissions commenting on the application and
submission provided in support of the application
• meets with the applicant and interested parties as appropriate
• invites the applicant to lodge a written submission in response to interested party submissions
• conducts its own market enquiries and research while consulting with interested parties
• issues a draft determination which sets out and provides reasons for whether the ACCC proposes
to grant or dismiss the application for authorisation or whether the grant of authorisation is subject
to conditions
• invites written submissions in response to the draft determination and invite the applicant
or interested parties to call a conference so that oral submissions can be made directly
to Commissioner
• holds a conference, if one is called, and
• issues a final determination.
A six month time limit applies to the ACCC’s consideration of new applications for authorisation. The
six month period begins on the date the ACCC receives a valid application for authorisation. Once the
six month time period has begun, the ACCC will accept only minor amendments to an application.
Consultation takes place according to strict deadlines for the submission of information. The six
month period can be extended by the ACCC by up to a further six months if the ACCC issues a draft
determination and the applicant agrees to the extension.
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Notifications
As with authorisations, the notification process begins once a valid notification is received and the
appropriate lodgement fees are paid. To assist with its consideration of a notification, the ACCC may
contact interested parties and invite submissions on the notified conduct. The ACCC may also seek
further information from the notifying party.
If the ACCC assesses the notification and considers that the likely public benefits from the notified
arrangement will not outweigh the anti-competitive detriments the ACCC will move to revoke the
notification. Before revoking the notification the ACCC will:
• issue a draft notice outlining the reason why it proposes to revoke the notification
• invite the applicant and interested parties to request a conference or lodge a written submission in
response to the draft notice
• issue a final notice to revoke if it is satisfied the conduct is not in the public benefit.
4.9
Details of authorisation and notification reviews posted on ACCC’s public authorisation and notification registers
The ACCC is required under the legislation to keep a public register containing documents relevant
to an application for authorisation or a notification. The register contains copies of the authorisation
application or notification, submissions and ACCC decisions. Applicants and interested parties may
request that confidential information provided in a submissions, or parts of it, be excluded from the
public register. Guidelines for requesting that confidential documents be excluded from the public
register are available on the ACCC website.
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Chapter 5: Compliance and enforcement options
The Competition and Consumer Act empowers the ACCC with the right to investigate matters and to take a
variety of enforcement actions. The ultimate determination of a contravention of the Competition and Consumer
Act can only be made, however, by a court of law, generally the Federal Court. The ACCC will decide on the
most appropriate course of action to take in any matter on the basis of established legal principles, and the
gravity of the conduct. In cases where matters are referred to the ACCC that fall outside of the ACCC’s areas of
responsibility, the ACCC proactively refers those matters to more appropriate regulators.
5.1 Determinations about a contravention of the Competition and Consumer Act are made by the courts
Under the Competition and Consumer Act, the ACCC investigates conduct that the ACCC assesses as
being likely to amount to a contravention of the Competition and Consumer Act.
As an investigation progresses, the ACCC has the option to discontinue an investigation, to seek
remedies for the conduct as provided for in the Competition and Consumer Act, or to institute court
proceedings for matters that cannot otherwise be resolved. If the ACCC elects to institute civil or
criminal court proceedings, such matters are then heard by a court of law8. The court determines, on
the basis of the evidence put before it by the ACCC (or another applicant) and the responding party,
whether a contravention of the Act has been committed. Penalties are determined by the court on the
basis of legal principle and precedent that apply to the case and on the gravity of the conduct. If a party
disagrees with the court’s finding, that party has the option to lodge an appeal to a higher level court.
A number of non-court based options are available to the ACCC under the Competition and Consumer
Act, which are discussed in section 5.2 below. Resolution of a matter by way of these alternative
measures does not constitute a formal finding that the party engaging in the conduct has contravened
the Competition and Consumer Act. Nevertheless, in circumstances where the ACCC has concerns
regarding certain conduct and the party who has engaged in that conduct acknowledges that the
ACCC is justified in its concerns, that party may consider it is in their interests to resolve the matter by
way of one of the measures made available to the ACCC by the Competition and Consumer Act.
5.2
Range of compliance and enforcement measures available to achieve appropriate outcome
As a statutory agency, the ACCC is bound to exercise its powers, including the use of any enforcement
measures, in accordance with the principles of administrative law. These include tests of natural justice,
reasonableness, proper purpose and good faith.
8 The Australian has a common law and adversarial (as opposed to inquisitorial) legal system.
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In determining which enforcement measures are appropriate in any given matter, the ACCC takes into
account considerations such as the nature and seriousness of the conduct, and how cooperative and
effective the trader is in taking action to resolve the ACCC’s concerns about the conduct.
As noted in section 5.1 above, findings of contraventions of the Competition and Consumer Act can
only be made by a court of law. For that reason, the alternative enforcement measures outlined in the
Competition and Consumer Act are ultimately a voluntary resolution proffered by the trader where the
ACCC will not take court action should the trader make good on its offer.
The enforcement measures available to the ACCC include administrative resolutions, court-enforceable
undertakings, civil proceedings and criminal proceedings. These enforcement measures are discussed
in the ACCC’s Compliance and Enforcement Policy and described briefly below.
Administrative resolutions
An administrative resolution is an agreement by a trader to stop conduct which may contravene the
Competition and Consumer Act, to compensate those who have suffered detriment as a result of
the conduct and to take any other measures necessary to ensure the conduct does not recur. The
terms of the agreement may be set out in correspondence between the ACCC and the trader or in
a formally signed agreement. Administrative resolutions are appropriate in circumstances where the
ACCC assesses that the risk of damage or harm resulting from the conduct in question is low or where
it provides a fast and effective resolution to a potential competition or consumer issue. For example,
after discussions with and/or an investigation by the ACCC, a trader may elect not to proceed with a
proposed merger, arrangement or other strategy.
Court-enforceable undertakings (section 87B undertakings)
A court-enforceable undertaking is a voluntary undertaking by a trader to remedy the alleged conduct,
accept responsibility for their actions and to establish or review and improve their compliance programs
and culture. Unlike an administrative resolution, a section 87B undertaking is put on the public record
and is enforceable by the Federal Court. The ACCC does not have the power to demand or require a
trader to make a section 87B undertaking, but a trader may offer it or the ACCC may propose it to a
trader as an option it may wish to consider to resolve the matter in question.
Court-enforceable undertakings are sought in situations where the ACCC might otherwise consider the
conduct serious enough to pursue litigation should the matter not be resolved. For this reason, while
the undertakings are voluntary, traders may choose to make a section 87B undertaking to avoid court
action. Indeed, in some cases, traders may wish to provide an undertaking to publicly demonstrate their
intention to act lawfully and to amend their conduct accordingly.
Where a merger raises competition issues, these can potentially be overcome by the merger parties
giving the ACCC a court enforceable undertaking. When considering undertakings in a merger context,
the ACCC has a strong preference for structural undertakings (for example, an undertaking to divest
one or more elements of a business) over behavioural undertakings. The ACCC will consult publicly
on all non-confidential aspects of proposed section 87B undertakings. Once finalised and accepted,
section 87B undertakings will generally be made public on the merger register.
More information about section 87B undertakings is available on in the ACCC’s section 87B guidance.
Infringement Notices
An infringement notice is a notice under which a financial penalty is paid by a trader for conduct which
is alleged to contravene the Competition and Consumer Act, and specifically certain provisions of the
Australian Consumer Law. Once the infringement notice is paid the trader avoids court action.
In applying the Australian Consumer Law, the ACCC’s focuses on consumer protection matters where
there is significant consumer detriment. This means that although that infringement notices are issued in
accordance with consumer protection provisions, in practice this power is often used in circumstances
where the ACCC is seeking to deal with conduct that also has an anti-competitive effect. An example
of this may be a trader who breaches the requirement under the Australian Consumer Law to advertise
the total single price for a good or service when component pricing is also used to represent the price
of that good or service (section 48 of the Australian Consumer Law). In such a case, the trader who
does not advertise the single price may gain an anti-competitive advantage over its competitors through
consumers falsely believing that the good or service is less expensive than what it actually is.
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The penalty amounts for infringement notices are fixed in the Competition and Consumer Act and
must only relate to one contravention, although multiple notices may be issued to the same person
if he or she commits multiple instances of the same type of contravention. The ACCC may issue an
infringement notice in circumstances where the ACCC believes a contravention of the Competition and
Consumer Act has occurred and requires a more formal sanction than an administrative resolution.
As noted above, once an infringement notice is paid the ACCC cannot take the recipient of the notice
to court in relation to the contravention specified in the notice. However, generally speaking, the ACCC
will only consider issuing an infringement notice where it is likely to seek a court-based resolution
should the recipient of the notice choose not to pay. For this reason, a trader may choose to pay an
infringement notice to resolve the matter without proceeding to court.
More information about infringement notices can be found in the Australian Consumer Law guidance on
infringement notices.
Civil proceedings
The ACCC may proceed to litigation in circumstances where the conduct in question is particularly
serious or where there is reason to believe that the party will be unwilling to resolve the matter by way of
one of the measures outlined above. The ACCC’s Compliance and Enforcement Policy outlines some of
the orders that the ACCC might seek from a Court following legal action.
Similarly, if the ACCC considers that an acquisition is likely to contravene section 50 of the Competition
and Consumer Act and the merger parties do not agree to modify or abandon the transaction, the
ACCC can apply to the Federal Court of Australia for an injunction, divestiture or penalties.
Criminal proceedings
Most of the contraventions in the Competition and Consumer Act are civil offences. Nevertheless,
in the case of a trader committing one of the criminal offences provided for in the Competition and
Consumer Act, including the cartel provisions, the ACCC must refer the matter for prosecution to the
Commonwealth Director of Public Prosecutions (CDPP). If the ACCC refers a matter to the CDPP, the
CDPP will make its own assessment of whether to prosecute the offence. This decision is made in
accordance with the Prosecution Policy of the Commonwealth, which requires that the CDPP only take
on cases where there is sufficient evidence to prosecute the case, and where it is evident from the facts
of the case and all the surrounding circumstances that the prosecution would be in the public interest.
Public Warning Notices
A public warning notice is a notice issued by the Chairperson of the ACCC which warns the public
of conduct by a trader. The purpose of a public warning notice is to reduce the extent of widespread
consumer harm being suffered by the public in cases where there is likely to be a long delay before
other enforcement measures can be employed.
5.3
ACCC refers to other regulators where appropriate
The ACCC proactively refers matters to other regulators if it receives a complaint or enquiry that it
assesses does not fall within the Competition and Consumer Act or the ACCC’s Compliance and
Enforcement Policy. Examples of regulators to whom the ACCC regularly refers matters to include the
Australian Securities and Investments Commission, state and territory based Australian Consumer Law
regulators and the Australian Federal Police. The ACCC will only refer confidential information about the
person making the complaint or enquiry with the consent of that person. In this way the ACCC ensures
that matters of public concern are being considered and dealt with by appropriate regulators.
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Chapter 6: Checks and balances
A variety of internal policies and whole of government legislation act to safeguard the integrity and accountability
of the ACCC’s exercise of its functions.
6.1
Oversight of all action by senior management, relevant committees and the Commission
As the ACCC’s organisational chart shows and as discussed in section 1.3, the ACCC has a clear
management and decision making structure at both staff and organisational levels. This ensures
appropriate oversight and decision making authority is maintained at every stage of a matter or issue
under consideration by the ACCC.
6.2
Impartial and transparent use of external legal service providers
The ACCC, like most Commonwealth agencies, is subject to the Financial Management and
Accountability Act 1997 and the Commonwealth Procurement Rules. These rules provide a framework
for the appointment of external contractors, and require the ACCC to expend public money in an
effective and efficient manner. In accordance with these rules, the ACCC has established a panel of
five external legal service providers from whom it obtains legal services. The process for selecting the
panel firms requires the ACCC to conduct an open tender process. The ACCC must provide annual
reports to the Office of Legal Services Coordination in the Australian Attorney-General’s Department
on the amounts paid to each external legal service provider. In addition, each time the ACCC enters a
contract for over AUD$10,000 value with a panel firm or any other legal service provider, the identity of
the provider and the amount of the contract must be reported to the Australian ‘Austender’ website. This website is publicly available and ensures complete transparency of the ACCC’s financial dealings
with external legal service providers. The ACCC also has strict internal procedures in place to ensure that all ACCC expenditure on legal fees
incurred from external legal service providers is formally approved prior to work being done. External
legal service providers are not permitted to commence any work for the ACCC until appropriate funding
has been approved by ACCC senior management. To obtain this approval, ACCC investigative teams
must first obtain a cost estimate from the external legal service provider, which then acts as a cap
on any legal services that it can provide. If further work is required or circumstances change, a new
estimate and approval is obtained. The estimate should be based on a joint assessment by the ACCC
and the external legal service provider about what legal services are required in the matter based on the
ACCC’s strategic goals and policies as outlined in the ACCC’s Compliance and Enforcement Policy.
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6.3
Court as the decision maker on whether the law has been contravened
As set out above, the ACCC does not have power to determine whether a trader has contravened the
Competition and Consumer Act. Only the Court may make this decision. The need to prove its case in
Court provides a key check on the power of the ACCC.
Except in cases where traders are willing to voluntarily alter their behaviour, the ACCC has no power to
apply a remedy to address its competition concerns. Instead, it must commence Court proceedings
to prove a contravention of the Competition and Consumer Act and seek a remedy from the Court for
that contravention.
Decisions of the Court may be appealed by both parties to the proceedings.
6.4
Adherence to Legal Services Directions including government-wide policy to act as a model litigant
The ACCC adheres to the Australian Commonwealth’s Legal Services Directions, which are a binding
set of rules issued by the Attorney-General about the performance of legal work undertaken by and on
behalf of Commonwealth Government agencies (www.comlaw.gov.au). The Legal Services Directions
provide for appropriate oversight by the Australian Attorney-General to ensure that Commonwealth
agencies receive consistent and well coordinated legal services that are of a high standard, that uphold
the public interest and that are sensitive to their context of Commonwealth interests which are broader
than any one agency. Heads of relevant agencies are responsible for ensuring that their agency adopts
appropriate management strategies and practices so as to achieve compliance with the Directions.
A key element of the Legal Services Directions is a requirement not to start court proceedings unless
written legal advice is received, usually from an external independent legal service provider, indicating
that there are reasonable grounds for starting proceedings, and a requirement to act as a model litigant.
The principle of acting as a model litigant requires that Commonwealth agencies, as parties to litigation,
act with propriety, fairly and in accordance with high professional standards. Some examples of the
expected model litigant standards of conduct for Commonwealth agencies include:
• not causing unnecessary delay in handling proceedings
• making an early assessment of the agency’s prospects of success
• limiting the scope of proceedings wherever possible
• not requiring the other party to prove a matter which the agency knows to be true
• considering alternative dispute resolution methods to resolve the litigation e.g. settlement offers
• not taking advantage of a claimant who lacks resources
• not relying on technical defences unless the agency’s interests would be prejudiced by the failure to
comply with a particular requirement, and
• apologising where the agency is aware that it has acted wrongfully or improperly.
6.5
Exercise and review of investigative powers
The ACCC’s coercive investigative powers, including search warrants and compulsory requests for
information, are exercised within strict legislative boundaries and various mechanisms exist to review
the use of these powers.
Search warrants—legislative requirements and review
The Competition and Consumer Act provides for search warrant powers to gather evidentiary material,
which are issued by a magistrate or judge. Under a search warrant the ACCC can seize goods or
documents, inspect, handle and measure the goods and equipment, taking samples of the good and
making copies or extracts from documents. The ACCC inspector may also require any person on the
premises to answer any questions and produce any documents that relate to the reasons for the entry
of the premise.
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Strict legislative requirements exist in the Competition and Consumer Act for the proper entry to a
premises and the subsequent execution of a search warrant. For example, only inspectors appointed
under the Competition and Consumer Act or other specially designated officers such as the Australian
Federal Police can execute the warrant. The executing officer must wear an identity card, announce
that they are authorised to enter the premises before entering it and he or she must allow any person
at the premises to also enter. The executing officer must provide a receipt to the occupier of the
premises for any objects that are seized or taken for examination and owners of electronic equipment
on the premises are entitled to reasonable compensation for damage to that equipment if damage
occurs to it as a result of the equipment being treated without sufficient care. Any use of force must be
necessary and reasonable in the circumstances, and in any event it is ACCC policy to avoid the use of
force wherever possible. Further, it is a criminal offence for an inspector to in any way amend or falsely
replicate a warrant such that their execution of the warrant goes beyond what was authorised by the
magistrate that issued the warrant.
Section 155 of the Competition and Consumer Act—legislative requirements and review
Section 155 of the Competition and Consumer Act gives the ACCC Chairperson the power to require a
person to provide information, documents and/or give evidence under oath or by way of affirmation in
investigations carried out under the provisions of the Competition and Consumer Act.
The decision to issue a section 155 notice is not taken lightly by the ACCC. Before issuing a notice,
ACCC staff consider:
• whether relevant information, documents or evidence are otherwise available
• whether there is a risk that the information, documents or evidence may be compromised in the
absence of the section 155 notice
• whether the information, documents or evidence are necessary to the investigation, and
• the time and cost implications for the ACCC and the notice recipient.
A section 155 notice cannot be issued unless the ACCC Chairperson has reason to believe on
reasonable grounds that the addressee is capable of furnishing information, producing documents
or giving evidence relating to a matter that constitutes, or may constitute, a contravention of the
Competition and Consumer Act.
In order to be valid a notice requiring the addressee to provide information or documents must:
• identify the matter that constitutes or may constitute a contravention of the Competition and
Consumer Act
• request information in relation to the matter
• specify the information or documents in enough detail to enable the addressee to know what is
required, and
• be validly served on the addressee.
The exercise of section 155 powers by the ACCC is subject to judicial review by the Federal Court
of Australia.
Section 155AAA of the Competition and Consumer Act provides for the protection of certain
information, including information collected under section 155. Section 155AAA is discussed in more
detail in Chapter 7.
Judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth)
As a Commonwealth agency, the exercise of the ACCC’s statutory powers are subject to judicial review
in accordance with the Administrative Decisions (Judicial Review) Act 1977 (Cth). Under this Act, a
person may seek judicial review by the Australian Federal Court of a Commonwealth agency’s (including
the ACCC) exercise of its statutory powers. Following an application for judicial review, the court will
determine whether the decision that is complained about is unlawful and may grant relief.
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Review of the ACCC’s exercise of powers—role of the Commonwealth Ombudsman
As noted in section 10.1, if a member of the public is unhappy with a decision made or action taken
by the ACCC, he or she can make a complaint about that to the Commonwealth Ombudsman. The
Commonwealth Ombudsman considers and investigates complaints from people who believe they have
been treated unfairly or unreasonably by an Australian Government department or agency, including
the ACCC. More information about the Commonwealth Ombudsman can be found at the following link:
www.ombudsman.gov.au
Review of ACCC decisions to grant or dismiss applications for authorisation or to revoke
a notification
ACCC determinations of applications for authorisation, revocation and substitution and minor variation
and revocation may be reviewed by the Competition Tribunal. Similarly the decision by the ACCC to
revoke a notification may be reviewed by the Tribunal.
A review by the Tribunal is a re-hearing of the matter, as distinct from a review of the reasons for the
ACCC’s decision. Upon review the Tribunal may make a determination affirming, setting aside or varying
the determination of the ACCC. In relation to notifications the Tribunal may affirm or set aside the
ACCC’s decision to revoke the notification.
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Chapter 7: Information handling
The appropriate handling and storage of information is key to ensuring the ACCC’s actions are transparent and
accountable. The ACCC has a number of systems and policies in place to enable this.
7.1
Information handled and records kept in accordance with organisational guidelines and relevant legislation
To ensure confidential and other information in the ACCC’s control is handled and stored appropriately,
the ACCC adheres to relevant provisions under the Competition and Consumer Act, relevant whole of
government legislation and internal ACCC policies.
Information handling
Various pieces of legislation, including the Competition and Consumer Act, Public Service Act 1999,
the Commonwealth Public Services Regulations 1999 and the Privacy Act 1988, contain provisions
regarding the handling of confidential information which apply to the ACCC. These requirements cover
the use of confidential information generally as well as information obtained by the ACCC through the
use of its compulsory information gathering powers.
Section 155AAA of the Competition and Consumer Act provides that the ACCC and its officers must
keep protected third party information confidential and a failure to do so in accordance with the section
can attract criminal charges for the officers involved. However, the section also permits disclosure of
protected information, in limited circumstances. These circumstances include:
• when the ACCC official is performing duties or functions as an ACCC official
• when required or permitted by law, or
• as permitted by section 155AAA.
The ACCC has published a guidance document which provides guidance for the public about the
ACCC’s approach to obtaining information (including the use of its statutory powers to require the
provision of information), using that information (including the use of information obtained for one matter
that was obtained in respect of another matter), and disclosing information to parties outside of the
ACCC. This guidance, which reflects the ACCC’s information handling obligations in the legislation
noted above, is entitled the ACCC’s Policy on the Collection, Use and Disclosure of information.
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Records management
Good record keeping is a significant part of the ACCC’s commitment to accountability and
transparency. As with other Commonwealth agencies, the ACCC is bound by the Archives Act 1983,
which imposes a number of record keeping requirements and provides for the public to have access
to Commonwealth records that are more than 30 years old. The ACCC has also developed a Records
Management Guide for ACCC staff which reflects the requirements of the Archives Act. This guide
reiterates the importance of all ACCC staff, including employees, contractors and consultants, being
responsible for making and keeping good records of their work-related activities. The guidance requests
that staff maintain an appropriately complete and accurate record of their activities.
A key feature of the ACCC’s record management systems is its organisational-wide electronic
document management system. This system provides a single repository for the ACCC’s electronic
documents, which promotes effective information management and reduces the risk of document
duplication. The security and confidentiality of documents stored in this system are maintained through
the tracking of all interactions with the documents and through the setting of access controls, where
necessary, to restrict the access to certain documents to certain individual or groups.
7.2
Cases recorded in an organisational case management system
As noted in Chapter 3, information received by the ACCC through incoming calls, emails and letters,
and information about the progress of any subsequent investigations, are recorded in an agencywide case management database. This case management database also links to the ACCC’s
electronic document management system. While the database is available to all staff, access controls
are available to ensure staff can only access information which is appropriate to their position and
responsibilities in the ACCC. Through this database, ACCC staff can access information about previous
complaints made about a trader, monitor the progress of an investigation and produce reports about
the nature of the investigations that the ACCC has undertaken. Information on this database is also
used to analyse complaint trends, identify issues for further enquiry and develop compliance responses.
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Chapter 8: Publication of compliance and
enforcement outcomes
All significant decisions and enforcement actions made by the ACCC are made public. This is achieved through
public registers, the issue of media releases and quarterly and annual reporting of outcomes.
8.1
Public registers
The Commission remains transparent and accountable through the publication of its decisions on
public registers. The ACCC is required to maintain some of the registers under the Competition and
Consumer Act and also maintains several voluntary public registers of information that the ACCC
considers should be available to the public.
In total the ACCC maintains 27 statutory and voluntary public registers, which are available on
the ACCC’s website. Examples of public registers that the ACCC’s maintains include registers of
authorisations and notifications (see section 4.9), mergers (see section 4.7), and undertakings.
8.2
Enforcement action, merger and adjudication decisions reported publicly via media releases
As noted in the ACCC’s Compliance and Enforcement Policy, every enforcement matter that is dealt
with through litigation or formal resolution is made public. In addition to public registers available on
the ACCC’s website, the ACCC achieves this by issuing a media release at a formal stage of a matter
(including the giving of court enforceable undertakings or the institution of civil court proceedings),
as well as following decisions relating to merger proposals. In addition to ensuring the ACCC’s
enforcement actions are transparent, media releases have a broader educative and deterrent benefit by
informing the public about what might constitute a contravention of the Competition and Consumer Act
and by highlighting the ACCC’s commitment to taking appropriate action against such contraventions.
Media releases are also a means by which the ACCC achieves its obligations under the Competition
and Consumer Act to make information available to the general public about matters that affect, or laws
that are designed to protect, their interests.
8.3
Quarterly and annual reporting of outcomes
At the end of each financial quarter9, the ACCC publishes a quarterly report on its website covering the
ACCC’s outcomes and major activities for that period.
9 In Australia, the financial quarters include the periods July to September, October to December, January to March, and April to June.
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These reports include, among other things, details of any:
• litigation commenced or ongoing during the period
• enforcement outcomes (such as court decisions or undertakings accepted)
• major projects commenced or completed (such as, for example, a public awareness campaign), and
• information about mergers and adjudication matters decided in the quarter.
As discussed in Chapter 10, the ACCC also publishes an Annual Report each financial year which
reports on the ACCC’s outcomes for the year. These reports are publicly available on the internet.
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Chapter 9: Evaluation and review
9.1
Review of investigations
Investigation teams, and in appropriate cases experienced officers outside the investigation teams, are
asked to review the handling of significant matters or matters involving adverse or unusual aspects to
identify key lessons and options for shared learning or improvements in practices. In 2012-13, this is
being further entrenched with the renewed roll-out of review templates and expectations.
9.2
Recommendations for improved practices communicated and implemented throughout ACCC
At an organisational level, the ACCC continues to review and monitor its practices, particularly in
light of recommendations that are made from the review processes outlined in section 9.1. Revised
organisational processes are communicated to all staff by email and incorporated into the ACCC’s
corporate ‘toolbox’ (see section 4.2).
9.3
Analysis of market and proactive responses to identified competition concerns
The ACCC works with its international counterparts and reviews complaint data to determine trends
in competition issues. These activities are then used to inform proactive compliance and enforcement
activities. An example of this is the ACCC’s cartel project, whereby the ACCC worked to educate
businesses on how to detect possible collusion among their suppliers and to educate business
executives, industry associations and peak bodies about the risks of engaging in cartel conduct and
how the ACCC’s immunity policy works. As part of this education campaign, the ACCC developed
‘The Marker’, a short film which shows the devastating effects involvement in a cartel can have on
individuals and businesses (see www.accc.gov.au/cartels). The ACCC released The Marker in August
2012 and sent copies of it directly to the chief executive officers at 300 of Australia’s largest companies.
In addition, the ACCC sent direct mail-outs to key decision makers in 2500 companies with over
AUD$30 million turnover. These mail-outs focused on companies in two industries that are susceptible
to cartel conduct, namely heavy construction and construction supply industries.
9.4
International review
The ACCC’s activities are subject to consideration and review by a number of non-government
agencies and international entities, for example, the OECD peer review processes.
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In March 2012 the ACCC was named the Global Competition Review’s Agency of the Year—
Asia-Pacific, Middle East and Africa. The awards celebrate particularly creative, strategic and innovative
work of competition regulators around the world, and are decided by readers of the Global Competition
Review following nominations from law firms, economics firms, competition authorities, corporate legal
departments and universities.
9.5
Regular consultation with industry and consumer groups through consultative committees
Given the breadth of the ACCC’s operations, the ACCC has convened various consultative
committees to facilitate ongoing consultation with consumer and industry bodies and to ensure the
issues and concerns of these groups are taken into account in the ACCC’s activities. Some of the
ACCC’s consultative committees include the Consumer Consultative Committee, the Small Business
Consultative Committee, and the Franchising Consultative Committee.
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Chapter 10: Public accountability
Decisions by the ACCC are made within rigorous corporate governance processes and, where appropriate,
information about them is made available to the public. These decisions are able to be reviewed by a range of
agencies, including the Commonwealth Ombudsman and the courts.
10.1 The ACCC’s Service Charter and the role of the Ombudsman
The ACCC publishes a Service Charter on the internet10 which sets out the standards of service
external stakeholders may expect from the ACCC and the steps they may take if these standards are
not met, which include an option for internal review. It applies to general correspondence including
contacts to the Infocentre providing information or making a complaint about market conduct, as well
as complaints about the ACCC as an organisation. The Service Charter demonstrates the ACCC’s
commitment to providing professional, unbiased and objective service to the Australian community.
If a member of the public is unhappy with a decision made or service provided by the ACCC, he or she
may also make a complaint about the ACCC to the Commonwealth Ombudsman. The Commonwealth
Ombudsman considers and investigates complaints from people who believe they have been treated
unfairly or unreasonably by an Australian Government department or agency, including the ACCC. The
Ombudsman resolves disputes through consultation, negotiation or by making recommendations to
senior levels of government. The Ombudsman cannot however override the decisions of the ACCC (or
other agencies it deals with) or issue directions to its staff. More information about the Commonwealth
Ombudsman can be found at the following link: www.ombudsman.gov.au
10.2 Compliance with whole of government accountability requirements
As noted in Chapter 1, ACCC staff must follow and abide by Australian Government legislation which
ensures Australian Government employees act in an accountable and transparent manner and in the
best interests of the public. The Financial Management and Accountability Act 1997, for example, sets
out the financial management, accountability and audit obligations of agencies that are financially part of
the Commonwealth. The Financial Management Act 1997 requires that public resources are managed
efficiently, effectively and ethically and that proper accounts and records of receipt are kept in respect
of any expenditure of public money. In addition, chief executives of Commonwealth agencies are
accountable to the Commonwealth Finance Minister who is entitled, subject to any law that prohibits
disclosure of particular information, to full and free access to agencies’ accounts and records.
The ACCC also adheres to other Commonwealth legislation which outlines standards and requirements
in the areas of recording keeping, information sharing, use of legal services and reporting (see
Chapters 6, 7 and 10).
10 The ACCC’s Service Charter is currently under review. A revised version will be finalised in 2013 following consultation with internal and external stakeholders.
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10.3 Compliance with whole of government Freedom of information Act and publication requirements
The Freedom of Information Act 1982 confers a legal right on members of the Australian public to
access information held by the Australian government. This is important to ensure that individuals
have the opportunity to find out what information is held about them by government agencies and to
encourage transparency and accountability in government policy and decision making.
Since May 2011, government agencies are also required to make public certain operational information,
which is specified in the Freedom of Information Act 1982. Among other things, such information
includes information about the agency’s structure and functions, information held by the agency
which is regularly submitted to Parliament and information held by the agency to assist the agency to
perform or exercise the agency’s functions or powers in making decisions or recommendations which
affect members of the public. These may include, for example, agency rules, guidelines, practices and
precedents relating to those decisions and recommendations.
To adhere to this requirement, the ACCC maintains a Freedom of Information website which contains
all the ACCC’s publicly released documents under the Freedom of Information Act. The ACCC regularly
reviews the website to ensure new operational information produced is included on the website.
10.4 Court determinations on contravention of the Competition and
Consumer Act
As noted in Chapter 3 to 5, under the Competition and Consumer Act, the ACCC investigates conduct
that the ACCC assesses as potentially constituting a contravention of this Act. As an investigation
progresses, the ACCC has the option to take no further action, to seek remedies for the conduct as
provided for in the Act, or to institute court proceedings for matters that cannot otherwise be resolved.
If the ACCC elects to institute civil or criminal proceedings, such matters are then tried before a court
of law11. The court determines, on the basis of the evidence put before it by the ACCC (or another
applicant) and the responding party, whether a contravention of the Act has been established. If a
party disagrees with the court’s determination, that party has the option to lodge an appeal against the
court’s judgment.
Hearings are conducted in public and are commonly the subject of media reports in Australia.
As discussed at 6.7, the Australian Competition Tribunal provides additional oversight for the ACCC’s
administrative functions of formal merger review and adjudication.
10.5 Government-wide financial audit process
Along with other Australian Government entities, the ACCC is subject to an annual audit as well as a
Government-wide program of independent financial statement and performance audits. These audits
are undertaken by the Australian National Audit Office on behalf of the Australian Auditor-General in
accordance with the Auditor-General Act 1997. The audits are intended to hold the Australian Executive
to account and to improve effectiveness in the administration of Australian Government programs and
entities. The audits are conducted in accordance with an Audit Work Program which is published on an
annual basis and the reports from the audits are presented to Parliament and made publicly available.
10.6 Portfolio budget statements
The ACCC, along with all Australian Commonwealth agencies, publishes its intended annual
expenditure for each financial year in a Portfolio Budget Statement. The projected expenditure is
based on the ACCC’s expected revenue which is received via allocations through the Commonwealth
Government’s annual budget processes. Portfolio Budget Statements are made publicly available on
the internet and are submitted for consideration to Parliament. As a portfolio agency of the Australian
Treasury, the ACCC’s Portfolio Budget Statement is incorporated into the Treasury’s Portfolio Budget
Statement and published on the Treasury’s website.
11 The Australian has a common law and adversarial (as opposed to inquisitorial) legal system.
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10.7 Parliamentary Inquiries
The Australian Parliament examines and scrutinises the operations of government agencies through
parliamentary committees and inquiries. The ACCC is required to appear before a number of such
committees, both for inquiries that relate to a specific matter and for standing committees such as
those involved in reviewing government expenditure for Senate estimates.
Senate estimates is a process whereby estimates of government expenditure are referred to Senate
committees as part of the annual budget cycle. The ACCC is required to appear before Senate
estimates hearings three times per year. At these hearings, committee members scrutinise the ACCC’s
expenditure and ask questions of the ACCC about its operations. The Committee is able to investigate
and probe broadly on any aspect of the ACCC’s work.
10.8 Annual reports
The ACCC is required under the Public Service Act 199912 and the Competition and Consumer Act13
to publish an annual report on its operations for each financial year. These reports are publicly available
on the internet. Among other things, the ACCC is required to report on the number of notices it issues
under its compulsory information gathering powers, the numbers of proceedings that are brought
against the ACCC to challenge these notices, the number of search warrants issued by a magistrate
under the Competition and Consumer Act, the number of complaints the ACCC received and how it
dealt with them, and a general description of matters investigated by the ACCC.
Also included in the annual report is a report on the ACCC’s actual expenditure for that financial year
against the projected expenditure outlined in the Portfolio Budget Statement at the beginning of the
financial year.
12 Competition and Consumer Act, section 63(1).
13 Competition and Consumer Act, section 171.
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