Australian Competition and Consumer Commission Chair outlines key priorities for the year ahead

The ACCC Chair focused on two broad themes - the regulator’s current position on enforcement and merger work, and the ACCC’s key priorities for the year ahead. This article discusses one of those priorities – sustainability – as well as some of the Chair’s observations around mergers and enforcement

Sustainability, a key priority for the ACCC

In the speech, the ACCC Chair expands on some areas of particular importance to the regulator - sustainability, digital platforms, cost of living and scams. Of particular interest is the focus on sustainability.

The ACCC’s focus on sustainability is set to increase, and the message for businesses is clear – any claims around sustainability must be able to be substantiated. For example, businesses should ask whether any environmental claims are accurate and verifiable.

It is also clear that the ACCC sees sustainability as both a competition issue as well as a consumer protection issue, and thinks it has a role to play beyond enforcing consumer law.

ESG initiatives have been the focus of applications for authorisation, and in those instances the regulator is able to consider public benefits (e.g., environmental benefits) as part of the “net public benefit” authorisation test.

For example, in 2021, the ACCC authorised a group of companies, including Equinix, HSBC, Nike and Goldman Sachs, to jointly tender and negotiate agreements for renewable energy. The ACCC considered that the conduct was likely to lead to environmental benefits (i.e. a reduction in greenhouse gases). We may see an increase in authorisation applications claiming environmental benefits, with the ACCC open to engage with parties.

On 4 October 2022, the ACCC announced that it had commenced internet sweeps to discover fake or misleading online business reviews and misleading environmental and sustainability marketing claims.

ACCC confirms it will pursue merger reform but no further update

At the Competition and Consumer Workshop last year, former chair of the ACCC Rod Sims introduced some concrete proposals for reform to Australia’s merger laws. This included the introduction of a new formal merger regime, substantive changes to the merger test, and the introduction of sector-specific reforms regulating acquisitions by digital platforms.

Although current Chair Cass-Gottlieb confirmed that the regulator will push for merger reform, she did not set out a detailed position at this time, and there was no indication as to when new merger laws might be introduced.

Even though there is no concrete update on merger reforms, the Chair made it clear that when reforms are introduced, replacing the current informal regime will be a priority. In the regulator’s view, parties are currently prepared ‘to push the boundaries of the informal system’ and the lack of a formal regime places the Commission at a disadvantage.

The ACCC also anticipates an uptick in applications for formal merger authorisation. With a further authorisation application in the banking sector anticipated shortly (while the TPG – Telstra authorisation application continues to be considered).

The Chair noted that there have been a growing number of global cross-border transactions which have required review. The Chair observed that parties in these transactions can be strategic in their approach to obtain clearance by honing their efforts on a certain jurisdiction (or a small number of jurisdictions). The ACCC is prepared to push back if parties try to restrict the time available for a review by leveraging the stance of other regulators. Similarly, if merger parties try to pressure the ACCC into accepting certain remedies by placing time restrictions on review, they may see such proposals receive short shrift from the regulator.

Cartel conduct, an enduring priority for the ACCC

Finally, the Chair endorsed the ACCC’s current compliance and enforcement priorities before reiterating its commitment to tackling cartel conduct.

Although the Commission will continue to refer serious cartel matters to the CDPP (Australia’s Federal Prosecution Service), the plan is to ‘maintain a strong civil cartel litigation program’. This may represent a softening of the ACCC’s approach to pursue criminal cartels rather vigorously since the introduction of criminal cartel offences in 2009.

Any change in approach may reflect the Commission’s mixed track record in criminal cartel cases. One day before the Chair’s speech was given, the ACCC announced that it had achieved a milestone with four individuals sentenced for criminal cartel conduct in a case involving the price fixing of the Australian dollar/Vietnamese dong exchange rate and transaction fees. However, the case was dropped against the fifth individual in that matter.

It is clear that cartel conduct remains a high priority for the Commission and businesses should be aware that engaging in such conduct can have severe consequences (with the risk of criminal sanctions). It is also apparent that under Chair Cass-Gottlieb, the Commission will continue to test the bounds of the law and take on hard cases. It seems likely she will do so armed with increased competition and consumer penalties given the new government’s commitment to introducing these.

For more information, please contact Thomas Jones or Matthew Bovaird and visit our Competition & EU homepage.