ACCC ‘on the march’

THE Australian Competition and Consumer Commission (ACCC) seems to be ‘on the march’ in dealing with major companies deemed to have breached their trading obligations, judging by the March 2014 quarterly report, ACCCount. Top of the bill is activity ahead of the Federal Government’s repeal of the carbon tax.

The ACCC has begun a formal monitoring role in preparation for the repeal of the carbon tax. The ACCC is to monitor prices, costs and profits to assess the general effect of the carbon tax scheme in Australia.

The ACCC’s focus will be on suppliers of regulated goods, namely natural gas, electricity and synthetic greenhouse gases, as well as corporations identified as liable entities under the Clean Energy Act 2011.

“The ACCC is gathering information that will provide a benchmark to allow the ACCC to compare prices charged to consumers both before and after the carbon tax is removed,” ACCC acting chairman Michael Schaper said. 

In February the ACCC released its Compliance and Enforcement Policy for 2014. The policy outlines the ACCC’s new priority areas including drip pricing, misleading promotions in retail energy plans, disruption of scams, and complexity “and unfairness in consumer or small business contracts”.

Cartel conduct, anti-competitive agreements, misuse of market power, and product safety remain enduring priorities for the ACCC, Dr Schaper said.

He said the ACCC was on track to meeting its commitment to increase the number of competition cases investigated. In the March quarter the ACCC:

• obtained a penalty of $11 million against Flight Centre Limited for attempting to enter into anti-competitive arrangements with airlines (case now under appeal and cross-appeal);
• instituted proceedings in the Federal Court against Pfizer Australia Pty Ltd for alleged misuse of market power and exclusive dealing;
• instituted proceedings against Woolworths Ltd and Coles Group Ltd for allegedly breaching court enforceable undertakings in relation to shopper docket discounts.

Continuing its focus on consumer protection, in the first quarter of 2014 the ACCC was involved in 29 proceedings relating to consumer protection, including the commencement of proceedings against Zen Telecom Pty Ltd for alleged contraventions of the Australian Consumer Law (ACL) in relation to its unsolicited telemarketing practices.

The ACCC regulatory arm released its final decision on the review of the declaration of the domestic transmission capacity service (DTCS) in March. The DTCS is a high-capacity transmission service used to carry large volumes of voice, data and video traffic.

 The DTCS is an essential input into the provision of services over the legacy copper network and the national broadband network (NBN). The ACCC’s final decision extends the declaration of the DTCS for a further five years and includes a number of variations.

“Competition for transmission services like the DTCS typically provides lower prices for this essential wholesale service. Retailers are then able to pass this on to consumers in the form of lower prices,” Dr Schaper said.

“The changing nature of Australia’s telecommunications industry has put the ACCC’s regulatory role into sharp focus. The ACCC will continue its important work in various infrastructure sectors with a particular concentration on telecommunications.”

The Australian Energy Regulator (AER) made its final decision on SP Australian Networks Limited (SP AusNet)’s revenue proposal capping it at $1600 million ($ nominal). This cap has been applied to ensure SP AusNet recovers no more than its efficient costs. The AER has also begun engagement with its Consumer Challenge Panel, a key part of the Better Regulation programme.

The ACCC assessed and reviewed a total of 69 merger matters in the quarter, including announcing its opposition to the proposed acquisition of the assets of Macquarie Generation by AGL Energy Limited (AGL).

The ACCC considered that the proposed acquisition was likely to result in a substantial lessening of competition. AGL has applied for a merger authorisation to the Australian Competition Tribunal. The hearing is set for June 2, 2014.

www.accc.gov.au

ends

POSTED MAY 23, 2014.