Report
ACCCount
A report of the Australian Competition and
Consumer Commission’s and Australian
Energy Regulator’s activities
1 October 2013 to 31 December 2013
Australian Competition and Consumer Commission
23 Marcus Clarke Street, Canberra, Australian Capital Territory 2601
© Commonwealth of Australia 2013
ISBN 978-1-921973-73-4
This work is copyright. Apart from any use permitted by the Copyright Act 1968, no part may be reproduced without prior written
permission from the Commonwealth, available through the Australian Competition and Consumer Commission. Requests and
inquiries concerning reproduction and rights should be addressed to the Director Publishing, Australian Competition and
Consumer Commission, GPO Box 3131, Canberra ACT 2601 or by email to publishing.unit@accc.gov.au.
www.accc.gov.au
ACCCount 1 October to 31 December 2013
2
CONTENTS
Overview ........................................................................................................................................ 5
1. Maintaining competition ........................................................................................................ 7
Maintain and promote competition and remedy market failure ................................................ 7
Enforcing the Act for businesses and consumers .................................................................... 7
Competition enforcement .............................................................................................. 7
Maintaining competition in concentrated sectors ................................................................... 11
Mergers ....................................................................................................................... 11
Remedy market failure ............................................................................................................ 14
Authorisations and notifications .................................................................................. 14
2. Protecting consumers and Fair trading ............................................................................. 18
Protect the interests and safety of consumers and support fair trading in markets ............... 18
Consumer protection outcomes .............................................................................................. 18
Action to protect consumers ....................................................................................... 18
Other significant activities ....................................................................................................... 25
Carbon price representations ..................................................................................... 25
Product safety ............................................................................................................. 27
3. Effective Regulation ............................................................................................................. 29
Promote the economically efficient operation of, use of and investment in monopoly
infrastructure ........................................................................................................................... 29
Energy..................................................................................................................................... 29
Better Regulation Program ......................................................................................... 29
Major reports and communication .............................................................................. 30
Decisions and determinations ..................................................................................... 31
Authorisations and exemptions ................................................................................... 34
Telecommunications ............................................................................................................... 35
Decisions and determinations ..................................................................................... 35
Reports Released ....................................................................................................... 37
Fuel price monitoring .............................................................................................................. 39
ACCC Petrol monitoring report ................................................................................... 40
Rail access.............................................................................................................................. 42
Decisions and determinations ..................................................................................... 42
Bulk wheat export–access to port terminal services............................................................... 42
PART IIIa ................................................................................................................................ 43
Water ...................................................................................................................................... 43
State Water price approval/determination pre-application consultation ..................... 43
4. Increasing engagement ........................................................................................................ 44
Increase our engagement with the broad range of groups affected by what we do............... 44
Outcomes from International forUMS and conferences ......................................................... 44
International partnerships and collaboration ............................................................... 44
Consumer engagement .......................................................................................................... 46
Consumer Consultative Committee ............................................................................ 46
Business engagement ............................................................................................................ 47
Franchising Consultative Committee .......................................................................... 47
ACCCount 1 October to 31 December 2013
3
Small Business Consultative Committee .................................................................... 47
Online education programs ......................................................................................... 48
Other business education and engagement activities ................................................ 48
Major speeches ...................................................................................................................... 49
5. Appendices............................................................................................................................ 50
Complaints and inquiries ........................................................................................................ 50
Enforcement outcomes & matters in court ............................................................................. 53
Litigation commenced ................................................................................................. 53
Litigation ongoing ........................................................................................................ 54
Litigation concluded .................................................................................................... 57
Undertakings accepted and Infringement Notices Paid .............................................. 60
87B Undertakings ....................................................................................................... 60
Infringement Notices ................................................................................................... 62
ACCCount 1 October to 31 December 2013
4
OVERVIEW
1.
The Australian Competition and Consumer Commission (ACCC) and the Australian Energy Regulator
(AER) play an integral role in facilitating and maintaining the operation of fair, efficient and effective
markets in Australia. This has been achieved through a broad range of activities across the economy in
the October to December 2013 quarter.
2.
In a landmark regulatory decision, the ACCC accepted the varied Special Access Undertaking lodged by
NBN Co. This Undertaking operates until 2040, setting the terms and conditions for access to the NBN
and provides a broad framework to facilitate effective engagement between NBN Co and access
seekers. The acceptance of the Undertaking is the culmination of an extensive two year process that
included widespread industry consultation.
3.
In another regulatory matter providing long term benefits to Australian markets, the AER finalised its
Better Regulation Program. This Program will deliver a multitude of regulatory reforms that will benefit
consumers by protecting them from paying more than is required for electricity and gas network services.
4.
The AER made a number of important decisions in the December quarter. Of particular note, the AER
published the final rate of return guideline setting out how the AER will determine the return that
electricity and gas network businesses can earn on their investments. This guideline balances the
interests of stakeholders and will provide greater regulatory stability and increased certainty within
markets.
5.
In December 2013 the ACCC released its 2013 report on the prices, costs and profits of unleaded petrol
in Australia. This report contains a number of key findings including that, despite the average annual
retail price at the pump for the five largest capital cities falling slightly in 2012-13, prices remained
historically high due to high international prices.
6.
The ACCC achieved a range of important enforcement outcomes in the October to December 2013
quarter in both competition and consumer protection matters.
7.
The ACCC accepted two separate court enforceable undertakings from Woolworths; and Coles Group
Limited, Coles Supermarkets Australia Pty Limited and Eureka Operations Pty Ltd following an
investigation into fuel saving offers. These undertakings were accepted following ACCC concerns that
these offers could have negative long term effects on retail fuel markets and the short term effect of
increasing pump prices.
8.
The ACCC continues to prioritise and vigorously pursue action against cartel conduct. In the December
2013 quarter the ACCC:

obtained a penalty of $2 million against Koyo Australia Pty Ltd for cartel conduct in the ball and
roller bearing market

instituted proceedings against Colgate-Palmolive Pty Ltd, PZ Cussons Australia Pty Ltd, a former
sales director of Colgate, Mr Paul Ansell, and Woolworths Limited in relation to alleged cartel
conduct in the supply of laundry detergents

instituted proceedings against NSK Australia Pty Ltd for alleged cartel conduct relating to the
supply of ball and roller bearings.
9.
Since the commencement of the Australian Consumer Law on 1 January 2011, the ACCC has obtained
strong outcomes in a range of consumer protection cases and this trend continued in the December
2013 quarter.
10.
Among a number of successfully litigated outcomes, the ACCC brought action leading to:

the High Court re-instating a $2 million penalty originally imposed against TPG Internet Pty Ltd for
misleading advertisements

Scoopon Pty Ltd paying pecuniary penalties of $1 million for making false or misleading
representations to both businesses and consumers
ACCCount 1 October to 31 December 2013
5

Australian Power & Gas Company Limited paying a pecuniary penalty of $1.1 million for illegal
door-to-door selling practices.
11.
Additionally, following action by the ACCC against AGL South Australia and its marketing company,
CPM Australia Pty Ltd, the Federal Court ruled that a ‘Do-not-knock’ sticker constituted a request to
leave a premises for the purpose of the Australian Consumer Law.
12.
The ACCC also achieves a wide range of non-litigated enforcement outcomes. Outcomes in the
December 2013 quarter notably include accepting a court enforceable undertaking from Apple Pty Ltd
following an investigation into Apple’s consumer guarantees policies and practices and representations
about consumers’ rights.
13.
In addition to its enforcement work, the ACCC remains committed to engaging with business, including
through producing a diverse range of educational materials and publications. In December 2013 the
ACCC released a new publication, ‘Online reviews: a guide for business and review platforms’,
providing best practice guidance on online product reviews and how to avoid engaging in misleading
conduct related to fake online reviews.
14.
Product safety continues to be a priority of to the ACCC. In the December 2013 quarter the ACCC:

received notifications for 160 product safety recalls published on the Recalls Australia website

released two consultation papers seeking public comment on proposals to review the mandatory
safety standards for child car restraints and hot water bottles

received 535 mandatory reports.
15.
In November 2013 the Hon Bruce Billson MP, Minister for Small Business, issued a Safety Warning
Notice to consumers about the sale of ‘fire wallets’ found to contain asbestos. The ACCC successfully
negotiated for both suppliers to recall all fire wallets found to contain asbestos.
16.
The ACCC assessed or pre-assessed 57 matters relating to potential mergers and acquisitions,
including announcing that the ACCC would not oppose Westpac Banking Corporation’s proposed
acquisition of the assets of Lloyds International Pty Ltd which included Capital Finance Australia Limited
and BOS International (Australia) Limited.
17.
In December 2013 the ACCC issued a final determination granting authorisation to Visa and
MasterCard. The authorisation permits Visa and MasterCard to coordinate with each other, American
Express and participating financial institutions in relation to the removal of signatures as a method of
authentication for the majority of credit card transactions completed in person.
ACCCount 1 October to 31 December 2013
6
1. MAINTAINING COMPETITION
Maintain and promote competition and remedy
market failure
ENFORCING THE ACT FOR BUSINESSES AND
CONSUMERS
Competition enforcement
1.1
In the December 2013 quarter the ACCC was involved in 13 proceedings relating to competition
enforcement.
1.2
These proceedings relate to competition matters in industries including travel, construction, laundry
products, electrical products and financial services. A complete list of these proceedings is included in
the Appendix.
1.3
Of the 13 competition enforcement proceedings:

10 cases were carried over from the previous quarter

three new cases were commenced in the quarter

one is a new appeal

three cases were concluded in the quarter

11 cases remain ongoing at the end of the quarter.
ACCCount 1 October to 31 December 2013
7
Cartels
NSK Australia Pty Ltd
The ACCC commenced proceedings in the Federal Court against NSK Australia
Pty Ltd (NSK) for alleged cartel conduct relating to the supply of ball and roller
bearings for use in motor vehicles and industrial applications. The ACCC
alleges that in 2008 and 2009, NSK and at least two of its competitors made
and gave effect to two separate cartel arrangements in which they exchanged
pricing plans for the purpose of controlling or maintaining the price of bearings
to aftermarket customers.
The ACCC is seeking pecuniary penalties, injunctions and a compliance
program. NSK has cooperated with the ACCC’s investigation and has admitted
to the conduct.
Cartels
Colgate-Palmolive Pty Ltd & Ors
The ACCC commenced proceedings in the Federal Court against ColgatePalmolive Pty Ltd (Colgate), PZ Cussons Australia Pty Ltd (Cussons), a former
sales director of Colgate, Mr Paul Ansell, and Woolworths Limited (Woolworths)
in relation to alleged cartel conduct. The ACCC alleges that Colgate, Cussons
and Unilever Australia Ltd (Unilever) made and gave effect to cartel and other
anti-competitive arrangements in relation to the supply of laundry detergents.
The ACCC is also alleging that Mr Paul Ansell and Woolworths were knowingly
concerned in the alleged arrangements.
Unilever and its relevant employees have been granted conditional immunity
from legal proceedings by the ACCC after Unilever came forward with
information about the alleged conduct.
The ACCC is seeking pecuniary penalties, declarations, injunctions, compliance
programs and costs.
Resale price
maintenance
Mitsubishi Electric Australia Pty Ltd
The ACCC commenced proceedings in the Federal Court against Mitsubishi
Electric Australia Pty Ltd (Mitsubishi) for allegedly engaging in resale price
maintenance in relation to air conditioning products.
The ACCC sought declarations, injunctions, pecuniary penalties and costs.
Proceedings concluded
Cartels
Koyo Australia Pty Ltd
The Federal Court ordered by consent Koyo Australia Pty Ltd (Koyo) pay
pecuniary penalties totalling $2 million for engaging in cartel conduct. The Court
found that in 2008 and 2009, Koyo made and gave effect to two separate cartel
arrangements with two of its competitors to increase the price of ball and roller
bearings to their aftermarket customers.
The Court has also ordered injunctions and that Koyo implement a competition
and consumer law compliance training program.
ACCCount 1 October to 31 December 2013
8
Mitsubishi Electric Australia Pty Ltd
Resale price
maintenance
The Federal Court ordered by consent Mitsubishi pay civil pecuniary penalties
totalling $2.2 million for engaging in resale price maintenance in relation to
Mitsubishi branded air conditioning products.
The Court also ordered injunctions, declarations and that Mitsubishi pay
$50 000 towards the ACCC’s costs.
Appeals
Anti-competitive
agreements
Australia and New Zealand Banking Group Limited
The ACCC has appealed the Federal Court’s decision to dismiss allegations
that Australia and New Zealand Banking Group Limited (ANZ) engaged in price
fixing.
The ACCC alleged that Mortgage Refunds Pty Ltd (Mortgage Refunds) and
ANZ were competitors in the market for loan arrangement services. The ACCC
alleged that ANZ engaged in price fixing by limiting the refund Mortgage
Refunds could provide customers for arranging ANZ home loans.
The Federal Court dismissed the allegations, finding that ANZ was not a
competitor in the market for loan arrangement services.
Court enforceable undertakings
1.4
1.5
The ACCC also resolves contraventions of the Competition and Consumer Act 2010 (the Act) by
accepting court enforceable, non-court based undertakings under section 87B. In these undertakings,
which are on the public record, companies or individuals generally agree to:

remedy the mischief

accept responsibility for their actions

establish or review and improve their competition compliance programs and culture.
In the December 2013 quarter the ACCC accepted two section 87B undertakings for alleged breaches of
competition provisions.
ACCCount 1 October to 31 December 2013
9
Shopper
dockets
Coles Group Limited, Coles Supermarkets Australia pty Ltd, Eureka
Operations Pty Ltd and Woolworths Limited
On 6 December 2013 the ACCC accepted two separate court enforceable
undertakings from Woolworths; and Coles Group Limited, Coles Supermarkets
Australia Pty Limited and Eureka Operations Pty Ltd (together Coles) following an
investigation into whether fuel saving offers were causing a substantial lessening of
competition in retail fuel markets.
The ACCC’s investigation focused on offers of fuel discounts of 8 cents per litre or
more for sustained periods during 2012 and 2013. The ACCC was concerned that
such offers could have longer term effects on the structure of retail fuel markets
and also short term effects of increasing general pump prices in those markets.
The undertakings address these concerns and state:
From 1 January 2014 Coles and Woolworths will not make or allow fuel discounts
where those discounts are:

not funded wholly by the fuel subsidiary or division of Woolworths or
Coles or

greater in amount than 4 cents per litre and contingent on purchase
of goods or services at a store or business separate from the retail
fuel outlet.
Continuing investigations
INFORMATION SHARING – FUEL COMPANIES
1.6
On 3 May 2012 the ACCC announced it had commenced an investigation into petrol price information
sharing arrangements in relation to the retail petrol sector because of concerns that these arrangements
may be in breach of the Act.
1.7
The petrol price information sharing arrangements allow for the private and very frequent exchange of
comprehensive retail price information between the major petrol companies. The ACCC is concerned
that this allows petrol retailers to signal price movements, monitor competitors’ responses and react to
them. The ACCC is concerned that these arrangements may lessen price competition in petrol retailing
to the detriment of consumers.
ONLINE COMPETITION
1.8
The ACCC continues to assess market behaviour which affects competitive online markets. The focus is
on traditional bricks and mortar businesses that are engaging in anti-competitive conduct towards new
online entrants. This may include misuse of market power, exclusive dealing distribution arrangements
and controlling prices through resale price maintenance.
1.9
The ACCC continues to monitor international competition matters that relate to online issues relevant to
Australian markets. A key current investigation is the European Commission’s response to Google Inc.’s
alleged misuse of market power in relation to search engine services and online advertising.
ACCCount 1 October to 31 December 2013
10
MAINTAINING COMPETITION IN CONCENTRATED
SECTORS
Mergers
1.10
The impact of proposed and completed mergers and acquisitions on competition is assessed by the
ACCC under section 50 of the Act, which prohibits transactions which would have the effect, or likely
effect, of substantially lessening competition.
1.11
The ACCC does this by providing the merger parties with its view on whether a particular proposal is
likely to breach section 50 of the Act. This process is generally known as the ‘informal clearance’
process. Businesses may also apply to the ACCC for formal clearance of mergers.
1.12
The ACCC monitors media daily for news of proposed or actual mergers to identify any transactions that
may potentially raise competition issues. Where proposals are identified in the media that have not yet
been notified to the ACCC, the ACCC may investigate further.
1.13
The ACCC deals with matters expeditiously through pre-assessment when it determines that they do not
require review because of the low risk that competition concerns will be raised. As indicated in Table 1
below, a significant proportion of the mergers assessed by the ACCC are pre-assessed, thus enabling
the ACCC to respond quickly when there are no significant concerns.
Table 1: Matters assessed and reviews undertaken – 1 October to 31 December 2013
Confidential Public
Total
Pre-assessed 1 October – 31 December 2013
47
0
47
Total reviews undertaken 1 October – 31 December 2013
1
9
10
Total reviews can be broken down into the following categories:
Not opposed
1
7
8
Finished—no decision (including withdrawn)
0
0
0
Opposed outright
0
0
0
Confidential review—ACCC concerns expressed
0
0
0
Resolved through undertakings
0
2
2
Variation to undertaking accepted
0
0
0
Variation to undertaking rejected
0
0
0
Total matters assessed and reviews undertaken
48
9
57
Note: Only public matters can be resolved with undertakings
ACCCount 1 October to 31 December 2013
11
SIGNIFICANT MERGER DECISIONS THIS QUARTER
Merger
Case Study—Westpac Banking Corporation’s proposed acquisition of the
assets of Lloyds International Pty Ltd
On 4 December 2013 the ACCC announced it would not oppose Westpac
Banking Corporation’s (Westpac) proposed acquisition of the assets of Lloyds
International Pty Ltd (Lloyds) which included Capital Finance Australia Limited
(CFAL) and BOS International (Australia) Limited (BOSI).
Westpac (through its subsidiary St. George) and Lloyds (through CFAL) primarily
competed in the provision of finance facilities to motor vehicle dealerships.
Following its review, the ACCC reached the view that the proposed acquisition
would not be likely to result in a substantial lessening of competition in these
markets (or any other market) in contravention of section 50 of the Act.
The ACCC noted that bailment finance to motor vehicle dealerships is provided
by both automotive manufacturers.
Manufacturer aligned lenders provide bailment finance to motor vehicle
dealerships which sell the manufacturer’s brand of vehicles. The ACCC
considered that manufacturer aligned lenders compete vigorously against the
non-aligned lenders to provide bailment finance to those motor vehicle
dealerships which sell brands of motor vehicles associated with that
manufacturer aligned lender.
The ACCC considered that motor vehicle dealerships which do not sell brands of
motor vehicles associated with the manufacturer aligned lenders typically have
fewer options for bailment finance and are limited to those provided from one of
the non-aligned lenders.
For these unaffiliated dealerships which do not currently have access to
manufacturer aligned financiers, the ACCC considered that ANZ and Macquarie
were likely to continue to constrain the merged entity for the provision of bailment
financing. While the ACCC identified a number of potential entrants who
appeared well placed to enter the market to compete for unaffiliated dealership
franchises, the likelihood of such new entry was uncertain. However the ACCC
considered that existing aligned and non-aligned lenders did not face substantial
barriers to expansion. In particular, the ACCC observed that recent attempts by
Macquarie to grow its market share had put pressure on other non-aligned
lenders to offer lower bailment rates to motor vehicle dealerships.
The ACCC’s decision not to oppose the proposed transaction followed extensive
market inquiries with a range of industry participants including motor vehicle
dealerships, providers of bailment finance, point of sale finance and other
financial institutions, finance brokers, motor vehicle manufacturers and various
industry bodies.
BlueScope Steel Ltd - proposed acquisition of Orrcon Steel
1.14
On 5 December 2013 the ACCC announced that it would not oppose the proposed acquisition by
BlueScope Steel Ltd (BlueScope) of Orrcon Steel (Orrcon) from Hills Holding Limited.
1.15
BlueScope is the only Australian manufacturer of hot rolled coil, cold rolled coil and galvanised coil which
are key inputs for the manufacture of pipe and tube products. BlueScope also distributes steel and tube
products through a number of sites across Australia. The target, Orrcon, is a manufacturer of pipe and
tube products with facilities in Queensland and South Australia and also distributes steel and tube
products from 12 sites across Australia.
1.16
The acquisition of Orrcon would result in BlueScope becoming vertically integrated downstream into the
manufacture of pipe and tube products and merge the existing BlueScope and Orrcon steel and tube
distribution businesses. The ACCC in its review focused on whether the acquisition would increase the
ability and incentive for BlueScope to affect the supply of the key inputs to rival pipe and tube
manufacturers and also rival steel and tube distributors.
ACCCount 1 October to 31 December 2013
12
1.17
The ACCC concluded that manufacturers of pipe and tube products could bypass BlueScope by
increasing the volume of imports they acquire in the event that BlueScope pursued a foreclosure
strategy for the supply of key inputs to these rivals. In respect of the supply of pipe and tube products the
ACCC concluded that rival steel and tube distributors would have alternatives to BlueScope for the
supply of these products, principally from the manufacturer Australian Tube Mills and also through
imports.
1.18
The ACCC recognised that there are complexities with the importation of pipe and tube inputs, such as
hot rolled coil, and pipe and tube products, including logistical challenges, the effect of anti-dumping
applications and steel-industry related Australian Standards. However, based on publicly available data,
feedback from industry participants and information provided by BlueScope and Orrcon, the ACCC
considered that imports would continue to represent a significant alternative for both the supply of pipe
and tube inputs and the supply of pipe and tube products in Australia.
1.19
In respect of the merger of BlueScope and Orrcon’s pipe and tube distribution businesses the ACCC
concluded that alternative distributors in all states would constrain any attempt by BlueScope to either
increase prices or decrease service.
STATEMENT OF ISSUES
1.20
If the ACCC reaches a preliminary view that a proposed merger raises competition concerns that require
further investigation, it will publicly release a Statement of Issues. A Statement of Issues provides the
ACCC’s preliminary views, drawing attention to particular issues with varying degrees of competition
concern, as well as identifying further lines of inquiry that the ACCC wishes to undertake. It provides an
opportunity for all interested parties (including customers, competitors, shareholders and other
stakeholders) to ascertain and consider the primary issues identified by the ACCC. It is also intended to
provide the merger parties and other interested parties with the basis for making further submissions
should they consider it necessary.
1.21
In this quarter the ACCC issued six Statements of Issues in the reviews of:

iSentia Pty Limited proposed acquisition of AAP's media monitoring business

Woolworths Ltd - proposed acquisition of Lindisfarne Cellars (liquor licence and associated
assets) in Tasmania

BlueScope Steel Limited proposed acquisition of OneSteel Sheet & Coil

Sonic Healthcare Limited proposed acquisition of assets of Delta Imaging

Woolworths Ltd proposed acquisition of St Kilda Supa IGA

BlueScope Steel Limited proposed acquisition of Fielders Australia.
PUBLIC COMPETITION ASSESSMENT
1.22
The ACCC publishes a public competition assessment (PCA) outlining the basis for its final conclusion in
an informal merger clearance review generally when a merger is opposed, cleared subject to
undertakings or raises important issues that the ACCC considers should be made public. PCAs aim to
provide the market with a better understanding of the ACCC's analysis of various markets and
associated merger and competition issues involved in certain merger reviews.
1.23
In this quarter the ACCC issued six PCAs for the following reviews:

Woolworths Limited and Lowe's Companies Inc (JV) proposed acquisition of G Gay & Co
hardware stores

Perpetual Limited proposed acquisition of The Trust Company Limited

Westfield Group and Westfield Retail Trust proposed acquisition of Karrinyup Shopping Centre

Baxter International Inc proposed acquisition of Gambro AB

Woolworths Limited proposed acquisition of supermarket site at Glenmore Ridge Village Centre

Woolworths Limited proposed acquisition of the Hawker Supa IGA.
ACCCount 1 October to 31 December 2013
13
REMEDY MARKET FAILURE
Authorisations and notifications
1.24
In circumstances where competitive markets do not work to deliver the most efficient outcomes it may be
in the public interest to allow certain restrictions on competition. This is particularly the case where there
are features in a market that may lead to market failure, or where left to itself does not achieve the most
optimal outcomes. In many ways, the authorisation and notification provisions of the Act allow the ACCC
to consider the benefits from allowing conduct that addresses a market failure but which nonetheless
restricts competition.
Authorisations
1.25
The ACCC may ‘authorise’ businesses to engage in conduct that might otherwise amount to a breach of
the Act where it is satisfied that the public benefit outweighs any public detriment.
1.26
In assessing the likely public benefits and detriments of an authorisation application the ACCC
undertakes a transparent public consultation process, placing submissions on a public register subject to
any claims of confidentiality. After considering submissions, the ACCC will issue a draft decision and
provide an opportunity for interested parties to request a conference to discuss it. The ACCC will then
reconsider the application in light of any further submissions and release a final decision.
Table 2: Authorisations received and decisions issued–1 October to 31 December 2013
Total authorisations received 1 October –
31 December 2013
Number of proposal
(number of applications)
New
4 (7)
Revocation and substitution
9 (10)
Minor variations
0 (0)
Decisions issued 1 October – 31 December
2013
Draft determinations
9 (18)
Final determinations
7 (14)
Interim decisions (prior to draft)
3 (4)
SIGNIFICANT AUTHORISATIONS
1.27
Significant authorisations decided during the December 2013 quarter included:
ACCCount 1 October to 31 December 2013
14
VISA & MASTERCARD – AUTHORISATIONS – A91379 & A91380
On 18 December 2013 the ACCC issued a final determination granting
authorisation to Visa and MasterCard. The authorisation permits Visa and
MasterCard to coordinate with each other, American Express and participating
financial institutions in relation to the removal of signatures as a method of
authentication for most credit card transactions completed in person.
Each card scheme can independently make decisions regarding the use of
signatures or PINs without approval from the ACCC. The coordination between
the card schemes, rather than the PIN@POS initiative itself, was therefore the
focus of the ACCC’s decision.
The ACCC considered that public benefits are likely to arise from coordination
between the card schemes and financial institutions, and that it was also likely to
lead to mandatory PIN@POS being implemented earlier by more card schemes.
Specifically, it considered that a coordinated approach, including a single
message from industry, would be likely to lead to some efficiencies and less
confusion for customers and merchants.
The ACCC also considered that the coordination would be unlikely to significantly
reduce competition, as the card schemes will continue to compete on fees and all
other aspects of their product and service offerings to financial institutions,
merchants and cardholders.
Throughout the ACCC assessment process, the card schemes and financial
institutions advised of their plans to engage with merchants and consumers in
relation to these changes. Some financial institutions advised that, whilst PINs
will be mandatory for most transactions, some consumers will be able to receive
cards that will allow them to continue to sign for purchases if they are able to
demonstrate that they are unable to use a PIN.
The ACCC granted authorisation until 30 June 2015 to allow the parties to
implement the mandatory use of PINs over a period of time.
Homeworker Code Committee Incorporated - Revocation & Substitution - A91354 - A91357
1.28
On 3 October 2013 the ACCC granted authorisation of a revised form of the Homeworkers Code of
Practice (the Code) for five years.
1.29
The Code contains an agreement to only outsource work to contractors who comply with workplace
laws. The revisions to the Code clarify its operation and extend operation to textiles businesses to reflect
changes to underlying laws.
1.30
The ACCC considered that the Code is likely to result in net public benefits. These include efficiencies in
risk management of outsourced supply chains and of compliance with legal obligations to works are
likely to outweigh the detriments.
1.31
The ACCC considered that anticompetitive detriment is likely to be limited by the following factors:
1.32

the Code is voluntary

retail signatories and accredited manufacturers are only able to agree to boycott business that are
not compliant with their legal obligations

the Code contains safeguards against inappropriate accreditation or boycott decisions.
The ACCC had regard to submissions which stated that accreditation under the Code was not voluntary
for parties seeking to comply with the Commonwealth Procurement Rules but considered it is a matter
for individual businesses to decide whether or not they tender for such projects.
ACCCount 1 October to 31 December 2013
15
Notifications
1.33
Notification is an alternate process to authorisation as a means for businesses to obtain protection from
legal action for certain conduct including exclusive dealing and collective bargaining.
EXCLUSIVE DEALING NOTIFICATIONS
1.34
Exclusive dealing (where a business trading with another imposes restrictions on the other businesses
freedom to choose with whom, in what or where it deals) is prohibited under the Act in certain
circumstances. Third line forcing is a type of exclusive dealing conduct which involves the supply of
goods or services subject to a condition that the buyer must also acquire certain goods or services from
a third party. Third line forcing conduct is prohibited outright while other forms of exclusive dealing are
only a breach of the Act if they substantially lessen competition.
1.35
The exclusive dealing notification process provides protection from legal action for potential breaches of
the exclusive dealing provisions of the Act where the ACCC assesses there is sufficient public benefit.
Lodging a notification with the ACCC provides protection from legal action automatically from the
lodgement date (or soon after in the case of third line forcing conduct), which remains in force unless
revoked by the ACCC. Notifications can be reviewed by the ACCC at any time.
1.36
The ACCC may revoke the protection provided by a notification for third line forcing conduct if it is
satisfied that the likely public benefit from the conduct will not outweigh the likely detriment.
To revoke a notification for other exclusive dealing conduct the ACCC must be satisfied that the conduct
is likely to result in a substantial lessening of competition and the likely benefit to the public will not
outweigh the detriment.
Table 3: Exclusive dealing notification projects
Exclusive Dealing Notifications
Matters lodged in the quarter
Matters requiring a draft notice
Matters allowed to stand
1.37
1 October to 31 December 2013
number of proposals (number of
notifications)
129 (189)
0 (0)
125 (179)
Matters revoked
0 (0)
Matters withdrawn
0 (0)
A significant notification that required consultation in the period was:

Port Hedland Port Authority - Notification - N96171
1.38
On 19 December 2013 the ACCC decided not to take any further action in relation to a notification
lodged by the Port Hedland Port Authority (PHPA) following a commitment from the PHPA to introduce
competition in the provision of towage services at the Port of Port Hedland.
1.39
The port is Australia’s largest port by annual throughput, and is the largest bulk minerals export port in
the world.1 The primary export from the port is iron ore, and users of the port include BHP, Fortescue
Metals Group, Atlas and, in the future, Roy Hill Infrastructure.
1.40
All vessels entering and exiting the port (other than small craft, such as fishing vessels) must use a
towage service provider that has been licensed by the PHPA. To date, the PHPA has only licensed BHP
Billiton Minerals Pty Limited (BHP) to provide these services to all port users. The notification lodged by
the PHPA broadly has the effect of requiring port users to use towage services provided by BHP.
1.41
Following consultation with interested parties and the ACCC, the PHPA has recently committed to an
open, transparent and accountable process to facilitate opportunities for new entrants in the provision of
towage services at the port.
1.42
The ACCC considers that competition in the provision of towage services is likely to result in benefits in
terms of service quality, efficiency and price. To ensure that the benefits of competition are realised as
1
Source: http://www.phpa.com.au/About-the-Port/Port-profile-and-handbook, accessed 18 December 2013.
ACCCount 1 October to 31 December 2013
16
soon as possible, the process to appoint an additional towage service provider should be genuine,
transparent and timely.
1.43
The PHPA has committed to provide the ACCC with regular updates regarding its proposed process,
and the ACCC encourages any affected parties to contact the ACCC should they have any concerns
regarding the process.
ACCCount 1 October to 31 December 2013
17
2. PROTECTING CONSUMERS AND
FAIR TRADING
Protect the interests and safety of consumers
and support fair trading in markets
CONSUMER PROTECTION OUTCOMES
Action to protect consumers
2.1
2.2
The ACCC indicated that its 2013 consumer protection priorities would be:

online consumer issues

the telecommunications and energy sectors

consumer guarantees

consumer issues impacting on Indigenous communities

credence claims, particularly in the food sector

unfair contract terms

product safety.
In the December 2013 quarter the ACCC was involved in 41 proceedings relating to consumer
protection:

36 cases were carried over from the previous quarter

five first instance cases were commenced

11 cases were concluded

two appeals were concluded

28 cases remain ongoing at the end of the quarter.
2.3
These actions and outcomes demonstrate the ACCC’s continuing efforts to protect the interests and
safety of consumers, and support for fair trading in markets.
2.4
Since the introduction of new consumer law remedies and powers in the Trade Practices Act 1974 (TPA)
in April 2010 and the introduction of the Australian Consumer Law (ACL) on 1 January 2011, the total
penalties awarded by the Federal Court under the ACL pecuniary penalty regime is over
$33.6
million. As at 31 December 2013 this figure encompasses 13 ACCC cases where penalties awarded by
the Court have been at or above $1 million. These figures highlight that this type of conduct is viewed
seriously by the Federal Court and it will apply significant penalties where it is appropriate to do so.
ACCCount 1 October to 31 December 2013
18
Proceedings commenced
2.5
The following first instance proceedings were commenced in the December 2013 quarter:
Credence claims
Snowdale Holdings Pty Ltd and Pirovic Enterprises Pty Ltd
The ACCC commenced separate proceedings in the Federal Court against egg
producers Snowdale Holdings Pty Ltd in WA and Pirovic Enterprises Pty Ltd in
NSW alleging false, misleading or deceptive representations in relation to ‘free
range’ claims.
The ACCC is seeking pecuniary penalties, compliance programs, corrective
notices, declarations, injunctions and costs.
Reebok Australia Pty Ltd
The ACCC commenced proceedings in the Federal Court against Reebok
Australia Pty Ltd (Reebok) about false, misleading or deceptive representations
that walking in its EasyTone shoes increased muscle tone and strength more
than walking in traditional walking shoes.
The ACCC is seeking pecuniary penalties, corrective notices, non-party
consumer redress, a compliance program, costs, declarations and injunctions.
Consumer
protection in the
energy sector
AGL South Australia Pty Ltd
The ACCC commenced proceedings in the Federal Court against AGL South
Australia Pty Ltd (AGL South Australia) alleging false or misleading
representations and engaging in misleading or deceptive conduct. The alleged
conduct relates to representations made by AGL South Australia to residential
electricity consumers about the level of discounts off electricity usage charges
that could be obtained by consumers under its energy plans.
The ACCC is seeking pecuniary penalties, declarations, injunctions, publication
orders, a compliance program, redress for affected consumers and costs.
Consumer
guarantees
Fisher & Paykel Customer Services Pty Ltd & Anor
The ACCC commenced proceedings in the Federal Court against Fisher &
Paykel Customer Services Pty Ltd and Domestic & General Services Pty Ltd
alleging they made false or misleading representations about consumer
guarantees under the ACL in the course of offering an extended warranty.
The proceedings also involve alternative allegations under the consumer
protection provisions of the Australian Securities and Investments Commission
Act.
The ACCC is seeking pecuniary penalties, declarations, injunctions, a
compliance programs and costs.
ACCCount 1 October to 31 December 2013
19
Proceedings concluded
Small business
scam
Artorios Ink Co Ltd & Ors
The Federal Court ordered Tuan Nguyen, the sole director, and Thuan
Nguyen, the sales manager, of Artorios Ink Co (Artorios Ink) to pay pecuniary
penalties totalling $100 000 after they admitted to be knowingly concerned in
contraventions of the ACL by acting deliberately to mislead and deceive small
businesses to generate ink cartridge sales. The Court also made declarations
by consent and accepted undertakings from Tuan Nguyen and Thuan Nguyen
that they would not manage or be a director of a corporation for five years.
The Court found that, during 2011 and 2012, Artorios Ink engaged in
misleading or deceptive conduct and made a number of false or misleading
representations to the small businesses. The Court also found that Artorios Ink
asserted a right to payment for unsolicited goods by sending demands for
payments for ink cartridges which the small businesses had never agreed to
purchase.
Consumer
guarantees
Harvey Norman franchisees
The Federal Court ordered five Harvey Norman franchises to pay a total of
$148 000 in pecuniary penalties for making false or misleading representations
to customers regarding consumer guarantee rights. The five Harvey Norman
franchisees are:





Salecomp Pty Ltd, located in Sale, Victoria ($28 000)
HP Superstore Pty Ltd, located in Hoppers Crossing, Victoria
($28 000)
Moonah Superstore Pty Ltd, located in Moonah, Tasmania ($28 000)
Launceston Superstore Pty Ltd, located in Launceston, Tasmania
($32 000)
Camavit Pty Ltd, located in Campbeltown, NSW ($32 000)
The Court also ordered declarations and injunctions against the five
franchisees. With the exception of Launceston Superstore Pty Ltd, which
ceased trading on 30 November 2012, the franchisees are required to display
in-store corrective notices and implement a consumer law compliance
program.
The ACCC is awaiting judgment in proceedings against another five Harvey
Norman franchisees for similar conduct.
Vulnerable and
disadvantaged
persons
Excite Mobile Pty Ltd
The Federal Court ordered Excite Mobile Pty Ltd (Excite Mobile) pay pecuniary
penalties totalling $555 000 for engaging in false, misleading and
unconscionable conduct and using undue coercion in relation to selling and
obtaining payment for mobile phone services.
The Court also ordered that Excite Mobile’s directors, Mr Obie Brown and
Mr David Samuels, and an employee, Ms Fiona Smart, pay pecuniary penalties
totaling $103 500 for their involvement in the conduct. The Court also
disqualified Mr Brown from managing a corporation for a period of three years
and Mr Samuel for a period of two and a half years.
Injunctions have also been imposed on each of Mr Brown, Mr Samuel and
Ms Smart and they have been ordered to pay the ACCC’s costs.
ACCCount 1 October to 31 December 2013
20
Group buying
Scoopon Pty Ltd
The Federal Court ordered by consent that Scoopon Pty Ltd (Scoopon) pay
pecuniary penalties of $1 million for making false or misleading representations
to both businesses and consumers.
The representations to consumers concerned refund rights and the price of
goods advertised in some deals, and to businesses, the risks and costs
involved in running a deal with Scoopon, and the voucher redemption rate.
The Court also ordered injunctions, declarations; that Scoopon further develop
and enhance its existing compliance program, and hold an educational seminar
on ACL issues for other online group buying traders and contribution to the
ACCC’s costs.
Door-to-door selling
AGL South Australia Pty Ltd & Anor
The Federal Court ordered by consent AGL South Australia and its marketing
company, CPM Australia Pty Ltd (CPM), pay pecuniary penalties totalling
$60,000 for failing to leave a consumer’s premises despite the presence of a
‘do not knock’ sign on the consumer’s front door.
As part of the same proceedings, in May 2013 the Court ordered, by consent,
that AGL Sales Pty Ltd and AGL South Australia pay combined pecuniary
penalties of $1.55 million for other unlawful selling practices. CPM was also
ordered to pay $200 000 for its role in the conduct.
Australian Power & Gas Company Limited
The Federal Court ordered by consent that Australian Power & Gas Company
Limited (APG) pay a pecuniary penalty of $1.1 million for illegal door-to-door
selling practices.
The Court declared that APG, through the conduct of certain sales
representatives acting on its behalf, made false or misleading representations
while calling on consumers at their homes for the purpose of negotiating
agreements for the supply of retail electricity and/or gas by APG.
The Court also declared that APG, by the conduct of one of its contracted sales
representatives, engaged in unconscionable conduct during a door-to-door
sale involving a consumer from a non-English speaking background with very
limited English reading/writing skills.
The Court further declared that APG breached various unsolicited consumer
agreement provisions of the ACL and ordered APG to publish corrective
website and newspaper notices and to make a contribution to the ACCC’s
costs.
ACCCount 1 October to 31 December 2013
21
Credence claims
Luv-a-Duck Pty Ltd
The Federal Court ordered, by consent, Luv-a-Duck Pty Ltd (Luv-a-Duck) pay a
pecuniary penalty of $360 000 in relation to misleading claims about its duck
meat products.
Luv-a-Duck engaged in misleading or deceptive conduct (or conduct liable to
mislead and deceive) and made false representations by using words on its
packaging, website, brochures and promotions that represented that the ducks
used in its products spent at least a substantial amount of their time outdoors,
were raised in a spacious outdoor environment and were of a different quality
than duck meat products processed from barn-raised ducks, when this was not
the case.
The Court also ordered injunctions, corrective notices, a three year compliance
program and that Luv-a-Duck pay $15 000 towards the ACCC’s costs.
Turi Foods Pty Ltd & Ors
The Federal Court ordered Baiada Poultry Pty Ltd (Baiada) and Bartter
Enterprises Pty Ltd (Bartter), the processers and suppliers of Steggles branded
chicken products to pay civil pecuniary penalties totalling $400 000 for false,
misleading and deceptive conduct when it described on product packaging and
in advertising that its meat chickens were ‘free to roam in large barns’, when
this was not the case.
The Court also ordered Australian Chicken Meat Federation Inc (ACMF), the
peak industry body for Australia’s chicken meat industry, to pay $20 000 in
penalties for false, misleading and deceptive conduct for representing in
publications on its website that chickens produced in Australia were ‘free to
roam’, when this was not the case. The Court also ordered corrective letters
and relevant ACMF staff undergo trade practices training.
Turi Foods Pty Ltd (Turi Foods), the processor and supplier of La Ionica Poultry
products, was previously a respondent in the matter but settled proceedings
with the ACCC in December 2011. At that time, Turi Foods was ordered, by
consent, to pay a pecuniary penalty of $100 000, publish corrective
advertisements and implement a compliance training program for false,
misleading and deceptive conduct in relation to similar conduct.
The Court also ordered Baiada, Bartter and ACMF pay the ACCC’s costs.
Appeals
Telecommunications
TPG Internet Pty Ltd
The High Court of Australia allowed an appeal by the ACCC in relation to TPG
Internet Pty Ltd’s (TPG) Unlimited ADSL2+ advertisements.
The High Court overturned the Full Court’s findings that TPG’s advertisements
were not misleading. In the High Court’s view, the Full Court erred in finding
that the home telephone bundling requirement and set up charges were
adequately disclosed and consumers would have known that internet services
were commonly bundled with telephony services.
The High Court also reinstated $2 million pecuniary penalty ordered by the trial
judge, overturning the Full Court’s order for a $50 000 penalty.
ACCCount 1 October to 31 December 2013
22
Misleading conduct
The Jewellery Group Pty Ltd
The Full Federal Court dismissed an appeal by Jewellery Group Pty Ltd
(Zamel’s) against the decision that Zamel’s made false or misleading
representations in its use of two price advertising in catalogues and a flyer.
At first instance, Zamel’s was ordered to pay a pecuniary penalty of $250 000,
publish corrective notices, implement a compliance program and pay costs.
These orders were stayed until the determination of Zamel’s appeal.
Court enforceable undertakings
2.6
2.7
In addition to court based outcomes the ACCC often resolves contraventions of the Act by accepting
court enforceable, non-court based undertakings under section 87B of the Act. In these undertakings,
which are on the public record, companies or individuals generally agree to:

remedy the mischief

accept responsibility for their actions

establish or review and improve their trade practices compliance programs and culture.
In the December 2013 quarter the ACCC secured six section 87B undertakings for alleged breaches of
the Act and ACL.
Consumer
guarantees
Apple Pty Ltd
On 17 December 2013 the ACCC accepted a court enforceable undertaking
from Apple Pty Ltd (Apple) following an investigation into Apple’s consumer
guarantees policies and practices and representations about consumers’ rights
under the ACL. The ACCC was concerned that Apple had made a number of
false or misleading representations to consumers regarding their consumer
guarantee rights. Apple has acknowledged the ACCC's concerns and that
some of these representations may have contravened the ACL. Apple has
worked with the ACCC to resolve these concerns and committed to a number of
compliance measures.
In the undertaking offered to the ACCC, Apple publicly acknowledged that,
without limiting consumers’ rights, Apple will provide its own remedies
equivalent to those remedies in the consumer guarantee provisions of the ACL
at any time within 24 months of the date of purchase. Apple has also
acknowledged that the ACL may provide for remedies beyond 24 months for a
number of its products. Apple has also undertaken to:





not make representations to consumers which the ACCC was
concerned were contrary to the ACL
continue to offer a consumer redress program in which consumers
potentially affected by the alleged conduct can go to Apple to have
their claims re-assessed by Apple in accordance with the ACL
continue to implement a program to improve ACL compliance which
includes improved staff training
maintain a webpage to provide information and clarify the differences
between the coverage provided by the ACL and Apple’s voluntary
limited manufacturer’s warranty.
continue to make available in its retail stores in Australia copies of the
ACCC’s ‘Repair, Replace, Refund’ brochure.
ACCCount 1 October to 31 December 2013
23
Credence claims
Game Farm Pty Ltd
On 26 November 2013 the ACCC accepted a court enforceable undertaking
from Game Farm Pty Ltd (Game Farm) in relation to representations made
about its bird meat products.
Game Farm acknowledged that it was likely to have contravened the Act by
representing on its packaging and website that its chicken, duck, quail,
spatchcock and turkey are ‘range reared’, when in fact its birds are grown in
large commercial sheds with no access to the outdoors.
As a part of the undertaking Game Farm will refrain from making similar
representations, send corrective letters to its major regular customers that in
total account for approximately 90 per cent of Game Farm’s product sales and
establish and implement a trade practices compliance program. Two
infringement notices were also paid by Game Farm for the conduct, totalling
$20,400.
Product safety
Brand Republic Pty Ltd
On 16 October 2013 the ACCC accepted a court-enforceable undertaking from
Brand Republic Pty Ltd (Brand Republic) in relation to supplying children’s
nightwear garments that did not comply with the mandatory standard.
Brand Republic operates three GAP retail stores which sell apparel for men,
women, children and babies. Between 22 July 2011 and 26 May 2013, Brand
Republic sold five different children’s nightwear garments that did not comply
with the mandatory standard for children’s nightwear.
Brand Republic has undertaken that it will not supply or offer to supply products
that are subject to a prescribed information or safety standard unless they
comply with that standard and, where the products are subject to a prescribed
safety standard, specified evidence will be obtained to demonstrate
compliance.
Brand Republic has also undertaken to publish recall notices on the internet, instore and in certain newspapers, and implement a trade practices compliance
program. Five infringement notices totalling $51 000 have been paid.
Door-to-door
selling
AGL Energy Ltd
On 28 November 2013 the ACCC accepted a court-enforceable undertaking
from AGL Energy Ltd (AGL) in relation to the court proceedings ACCC v
Australian Power & Gas Company Ltd QUD 621 of 2013. These proceedings
related to Australian Power & Gas Company Ltd’s (APG) door-to-door selling
practices.
In October 2013 AGL completed its acquisition of APG, which is now wholly
owned by AGL.
Separate to the proceedings AGL offered the ACCC an undertaking that it would
extend its existing trade practices compliance program to include APG.
Infringement Notices
2.8
In the December 2013 quarter the ACCC:

issued seven infringement notices to two traders

received payment from two traders.
ACCCount 1 October to 31 December 2013
24
2.9
This takes the total infringement penalties paid up to December 2013 to over $970 000 under the ACL.
2.10
The payment of infringement notice penalties is not an admission of a contravention of the Act. The
ACCC can issue an infringement notice where it has reasonable grounds to believe a person has
contravened certain consumer protection laws.
OTHER SIGNIFICANT ACTIVITIES
Carbon price representations
2.11
In the December 2013 quarter the ACCC received over 40 identifiable carbon pricing complaints and
inquiries. This forms part of over 3000 complaints and inquiries received since the implementation of the
carbon price mechanism on 1 July 2012.
2.12
Energy remains the largest complaint category, constituting approximately 40 per cent of all contacts
received since 1 July 2012.
Proposed carbon tax repeal
2.13
On 13 November 2013 the government introduced the Clean Energy Legislation (Carbon Tax Repeal)
Bill 2013. The legislation will amend the Act and provides the ACCC with new powers to:
i.
monitor prices in key sectors
ii. take action against businesses in key sectors that attempt to exploit other businesses and
consumers by charging a price that is unreasonably high having regard to the carbon tax repeal
and
iii. take action against businesses that make false or misleading representations about the effect of
the carbon tax repeal or carbon tax scheme on the price for the supply of goods or services.
2.14
The prohibitions on price exploitation and carbon-specific false or misleading representations are
proposed to be in effect for one year (1 July 2014 to 30 June 2015).
Indigenous consumer protection
2.15
The ACCC continues to build partnerships with remote communities and key stakeholders to improve
consumer literacy, enhance consumer confidence to complain about consumer law breaches and detect
and stop illegal conduct at an early stage. The ACCC have visited the communities of Kununurra,
Wyndham, Warmun, Port Hedland and South Hedland in the East Kimberley and Pilbara regions of WA.
2.16
The ACCC launched the revised FairStore publication, a best practice guide for owners, operators and
staff of retail stores serving Indigenous communities. The publication (a joint publication with the
Australian Securities and Investments Commission) provides guidance to businesses on their obligations
under Australia’s national consumer protection and credit laws, including how these provisions apply to
the practice of book-up.
Online consumer protection
2.17
On 3 December 2013 the ACCC released a new publication, ‘Online reviews: a guide for business and
review platforms’ providing best practice guidance on online product reviews and how to avoid engaging
in misleading conduct related to fake online reviews.
2.18
The guide was produced in response to concerns that some businesses are taking advantage of
consumer trust in online reviews by posting fake reviews. Many consumers believe that reviews on
various online platforms reflect the genuine experience or views of real consumers. In fact, the ACCC
believes that there has been an increase in paid for and fake reviews.
2.19
The guidelines set out three core principles of conduct for businesses to abide by:

be transparent about commercial relationships

don’t post or publish misleading reviews

remember that omitting negative reviews can be as misleading as posting fake reviews.
ACCCount 1 October to 31 December 2013
25
Industry code audits
2.20
In October 2013 the ACCC announced its intention to audit franchisors in the take-away food and fitness
industries for compliance with the Franchising Code of Conduct.
2.21
The ACCC served seven audit notices on traders operating under the Franchising Code and one audit
notice on a trader operating under the Horticulture Code during the quarter. The ACCC has now served
71 audit notices (on 56 franchisors and 15 horticulture traders) since the audit power was introduced on
1 January 2011.
Scams
2.22
During the quarter, the ACCC continued to work with other agencies and implemented educational
initiatives to protect Australians against scam activity.
2.23
The ACCC chairs the Australasian Consumer Fraud Taskforce (Taskforce), a group of 23 government
agencies in Australia and New Zealand working to disrupt scam activities. On 11 November 2013 the
ACCC hosted the final Taskforce members’ meeting for the year.
2.24
The ACCC’s SCAMwatch website is the Australian Government’s website for information on scams.
SCAMwatch provides a free subscription service to alert the public to new scams. These ‘radars’ are
sent to over 26 000 subscribers. SCAMwatch radars issued during the quarter included:
2.25

Beware of fake charities

Don’t back a scammer this spring racing season

Beware fake websites when shopping online for Christmas

Don’t let scammers take advantage of the Anzac spirit

Don’t let scammers ruin your Christmas.
The ACCC also runs a SCAMwatch Twitter account where tweets are posted about scams targeting
Australian consumers and businesses, as well as on how to recognise, avoid and report them. In the
December quarter 180 tweets were posted.
Unsolicited Selling
2.26
The ACCC has continued to prioritise consumer protection in the energy sector, particularly marketing
practices that involve unsolicited selling.
2.27
This quarter two ACCC proceedings in the Federal Court, against Australian Power & Gas Company
Limited and AGL South Australia Pty Ltd, involving door-to-door selling in the energy sector were
concluded. More information on these cases is available on page 21.
2.28
Proceedings are continuing in the Federal Court in two matters involved in door-to-door selling against
Origin Energy Electricity Limited, and marketing company SalesForce Australia Pty Ltd and against
Energy Australia and four of its former marketing companies.
2.29
Proceedings are continuing in the Federal Court against Titan Marketing. The ACCC is alleging that
Titan Marketing breached the unsolicited consumer agreement provisions of the ACL in relation to its
sales of first aid kits and water filters in Indigenous communities and other locations in Qld, NSW and the
NT.
2.30
In addition, the ACCC continued its ‘Knock! Knock! Who’s There?’ national campaign to raise consumer
awareness about their rights when buying at their door.
In-app purchases
2.31
The ACCC continues to investigate concerns about children’s use of game applications, in particular the
ability for children to make inadvertent in-app purchases while playing ‘free’ games on mobile or tablet
devices.
2.32
In September 2013 the ACCC conducted a sweep of over 340 ‘app’ games in the Google Play and Apple
App Stores in conjunction with the International Consumer Protection and Enforcement Network (ICPEN)
consumer protection agencies. The ACCC review of these sites in the December quarter confirmed the
need for guidance to the app industry to protect consumers. Many ‘free’ games that appeal to children do
not come with adequate disclosures about costs associated with app-based games and fewer than
20 per cent of children’s ‘free’ game apps include information about how to prevent inadvertent in-app
purchases.
ACCCount 1 October to 31 December 2013
26
2.33
The ACCC supports the objectives of proposed principles for the online and app-based game industry.
The draft principles, released by the United Kingdom Office of Fair Trading on 26 September 2013, are
designed to protect children playing app-based games on smartphones and tablets.
Product safety
Recalls
2.34
In the December 2013 quarter the ACCC received notifications for 160 product safety recalls published
on the Recalls Australia website.
Table 4: Recalls – 1 October to 31 December 2013
Recalls - 1 October to 31 December 2013
General consumer goods
88
Motor vehicles
57
Food
2
Therapeutic goods
13
Note: ACCC-negotiated recalls are prompted by consumer complaints, supplier intelligence,
market-place surveillance, overseas recalls and other Commonwealth and state/territory regulator referral.
Teeth Whitening
2.35
In 2012 a compulsory recall order was made in relation to two teeth whitening products sold by Pro
Teeth Whitening (Aust) Pty Ltd. In 2013 the Federal Court dismissed the company’s application for
administrative review. The company appealed this decision. In allowing the company’s appeal the
Federal Court found on 18 December 2013 that the company had not been afforded natural justice in
relation to the decision to implement the compulsory recall without holding a pre recall
conference. Other elements of the company’s appeal were dismissed.
Emerging hazards and product safety recalls
2.36
During the December 2013 quarter the ACCC:

Received 535 mandatory reports (a report of a product related injury under the ACL) of which 275
were referred to other regulators. The remaining 260 reports were assessed or are currently under
assessment by the ACCC. Of these, seven reports were assessed as posing a high or significant
risk

Received 540 voluntary reports related to the safety of products from a range of sources. These
reports have been assessed, or are currently under assessment by the ACCC and include 28
reports assessed as posing a high to an extremely high risk.
New standards and bans
Synthetic drugs
2.37
On 18 June 2013 the Assistant Treasurer imposed a national interim ban on a range of dangerous
synthetic drugs to ensure there were no gaps in state and territory drug enforcement laws. At the time
there were gaps in drug control legislation in place in New South Wales and the Northern Territory. The
national interim ban was extended twice to allow States and Territories to update their drug enforcement
laws to outlaw these forms of synthetic drugs. Following on from this in October, the Hon Bruce Billson
MP, Minister for Small Business, announced he would not impose a permanent ban as it would result in
regulatory duplication.
Fire wallets
2.38
On 23 November 2013 the Hon Bruce Billson MP, Minister for Small Business, issued a Safety Warning
Notice to consumers about ‘fire wallets’ sold by an eBay trader and at a stall at the 2013 Royal
ACCCount 1 October to 31 December 2013
27
Melbourne Show found to contain asbestos. Fire wallets have the appearance of a regular leather wallet
but when opened can produce a large flame and are used as a magic trick or novelty.
2.39
The ACCC tested fire wallets from all known Australian suppliers for asbestos and commissioned an
expert risk assessment to determine the risk of injury to consumers and the safest way to dispose of the
affected product.
2.40
The ACCC successfully negotiated for both suppliers to recall all fire wallets found to contain asbestos
and continues to work with professional magicians, suppliers and the Australian Customs and Border
Protection Service to prevent further imports of fire wallets containing asbestos.
Reviews of mandatory standards
2.41
Two consultation papers were released seeking public comment on proposals to review the mandatory
safety standards under the ACL for child car restraints and hot water bottles.
Hazards associated with chemicals in consumer goods
2.42
Significant projects progressed by the ACCC during the December 2013 quarter include:

Development of a detailed survey proposal of clothing and textiles that may contain or release
benzidene based dyes or their aromatic amines. Preliminary survey samples had been purchased.

As part of the ‘Inventory Multi-tiered Assessment and Prioritisation’ (IMAP) Framework, as referred
by National Industrial Chemicals Notification and Assesment Scheme (NICNAS), commenced the
assessment of rosin, hydrogenate rosin and salts (used in adhesives, electronics solder fillers,
paints and string instrument resins) and sodium lauryl sulphate/sodium laureth sulphate
(surfactants).
Surveillence
2.43
During the December 2013 quarter the ACCC conducted 536 site surveys (wholesale, retail, online and
show bag inspections) and inspected 534 products against 80 mandatory safety standards, bans or
product types, resulting in one product being withdrawn from sale.
2.44
Non-compliant Flexi Bath Aid products identified as being supplied by Stokke Company during
surveillance activities were recalled in September 2013
(http://www.recalls.gov.au/content/index.phtml/itemId/1051074). The Scoot Stroller was also detected
on sale and proved to be non-compliant. A recall of the stroller is being prepared. In responding to the
ACCC’s concerns, Stokke have advised that they will be introducing a revised detailed compliance
program to ensure future compliance with all mandatory standards administered by the ACCC.
2.45
The ACCC finalised the pilot strategy on sunglasses and fashion spectacles involving inspection of
sunglasses by regulators at retail outlets and laboratory testing to the various performance requirements
of the mandatory standard.
ACCCount 1 October to 31 December 2013
28
3. EFFECTIVE REGULATION
Promote the economically efficient operation of,
use of and investment in monopoly
infrastructure
ENERGY
3.1
The Australian Energy Regulator (AER) is Australia’s national energy market regulator and has an
independent board. The AER is funded by the Commonwealth and shares staff, resources and facilities
with the ACCC. This section of the report details the AER’s achievements in the December 2013 quarter.
Better Regulation Program
3.2
The AER finalised its Better Regulation Program during the quarter to deliver a range of regulatory
reforms that will protect consumers from paying more than necessary for the safe delivery of reliable
electricity and gas network services.
3.3
The Better Regulation program involved extensive consultation with businesses and the community to
reform the approach to setting energy network prices under the new network regulation rules finalised in
late 2012. Both the new rules and the AER’s guidelines give it stronger powers to scrutinise network
businesses’ expenditure proposals. The AER will use benchmarking and other techniques to assess the
need for and efficiency of spending proposals. Reforms have also been introduced to encourage network
businesses to seek out more efficient ways of providing services. This includes new measures that will
allow customers to share in the benefits of the networks unforcasted savings. Details of each of the new
Better Regulation guidelines are included below.
CONFIDENTIALITY GUIDELINES
3.4
On 19 November 2013 the AER released the final confidentiality guideline. The guideline sets out how
energy network businesses must make confidentiality claims over information they submit to The AER.
The guideline balances protecting genuinely confidential information with ensuring that stakeholders can
access sufficient information on issues affecting their interests.
SHARED ASSET GUIDELINE
3.5
On 29 November 2013 the AER released the final shared assets guideline. The guideline outlines how
consumers will benefit from the other services electricity network businesses may provide using the
assets consumers pay for.
EXPENDITURE INCENTIVES GUIDELINES
3.6
On 29 November 2013 the AER released the final expenditure incentives guideline. The guideline
measures include its capital expenditure incentives guideline and efficiency benefit sharing scheme.
These give electricity network businesses incentives to spend efficiently and share the benefits of
efficiencies with consumers. The AER’s incentive schemes are integrated with its approach to
forecasting to promote efficient spending.
EXPENDITURE FORECAST ASSESSMENT GUIDELINES
3.7
On 29 November 2013 the AER released the final expenditure forecast assessment guideline. The
guideline describes the process, techniques and associated data requirements for the AER’s approach
ACCCount 1 October to 31 December 2013
29
to setting efficient expenditure allowances for network businesses. The AER’s approach to assessing
efficient expenditure is closely linked to its expenditure incentive measures.
RATE OF RETURN GUIDELINE
3.8
On 11 October 2013 the AER released an issues paper on equity beta as part of its consultation for
developing the rate of return guideline. The guideline sets out how the AER intends to apply the new
rules framework to set rates of return for electricity and gas service providers, in order to promote the
long term interests of consumers. The issues paper set out the AER’s proposed approach to estimating
the equity beta. Applying this approach, it proposed to adopt an equity beta of 0.7, chosen from within a
range of 0.4 to 0.7. Stakeholders were invited to lodge submissions by 28 October 2013. Fourteen
submissions were received.
3.9
On 17 December 2013 the AER published the final guideline setting out how it will determine the return
that electricity and gas network businesses can earn on their investments. The new approach has
involved extensive consultation with businesses and consumers since the new network regulation rules
were finalised in late 2012. The new guideline describes the method for determining the allowed rate of
return, based on the efficient financing practices of a benchmark network business.
3.10
Applied consistently over time, the AER’s guideline will provide greater regulatory stability and increased
certainty through greater transparency of the key components of the rate of return and how these are
assessed. It will allow the rate of return to change through time as market conditions change. The AER's
approach balances the interests of stakeholders while providing for the recovery of efficient financing
costs, less cash flow volatility for the businesses, and more stable price movements for consumers. The
framework will support the attraction of long term capital while addressing the long term interests of
consumers.
CONSUMER ENGAGEMENT GUIDELINE FOR NETWORK SERVICE PROVIDERS
3.11
On 6 November 2013 the AER issued its consumer engagement guideline. The guideline promotes
better communication between energy network businesses and their consumers, from households,
through to large and small businesses.
BETTER REGULATION NEWSLETTERS
3.12
During the quarter the AER published two Better Regulation Program newsletters. The October edition
focussed on stakeholder engagement in energy regulation. The November edition focussed on applying
Better Regulation and the impact of the AER’s guidelines and was the final edition of the newsletter.
TECHNICAL ADVISOR APPOINTMENTS
3.13
On 29 November 2013 the AER advised the appointment of four in-house technical advisors to provide
greater industry expertise, particularly in power system engineering. The new technical advisor group
was established in late October 2013 in time for the upcoming network pricing reviews.
Major reports and communication
STAKEHOLDER ENGAGEMENT FRAMEWORK AND SERVICE CHARTER
3.14
On 31 October 2013 the AER released its Stakeholder Engagement Framework and Service Charter.
3.15
The Stakeholder Engagement Framework sets out the principles that will guide the AER’s public
engagement with consumers, energy businesses and other stakeholders affected by the AER’s
activities. It commits the AER to communicate in a timely and clear way, and to be accessible and
inclusive, transparent and measurable in our engagement activities.
3.16
The Service Charter sets out how we will respond to stakeholders when they contact the AER. It also
provides useful information for consumers that may be experiencing problems with energy businesses.
ACCC AND AER ANNUAL REPORT
3.17
On 19 September 2013 the AER published its first annual report which details activities undertaken in
2012-2013 to regulate the wholesale electricity market, set prices for the of energy networks and protect
customers in retail electricity gas markets. In addition to this On 1 November 2013 the ACCC and AER
published their annual report for 2012-13. The combined annual report highlights the AER’s major
outputs for the financial year including a range of reforms to make energy markets work better for
consumers.
ACCCount 1 October to 31 December 2013
30
STATE OF THE ENERGY MARKET 2013
3.18
On 20 December 2013 the AER published the State of the energy market 2013 report which highlights
developments in the energy market that are helping to stabilise retail energy prices. The report shows
electricity retail prices stabilising in some States. Regulated prices in New South Wales, Tasmania and
the ACT are expected to rise by less than 4 per cent in 2013–14, compared with double digit rises in
2012–13. Retail prices in some parts of the New South Wales network are expected to fall in 2013-14.
Decisions and determinations
Gas networks regulation matters
MERITS REVIEW OF ACCESS ARRANGEMENT DECISION FOR VICTORIAN GAS DISTRIBUTION AND
TRANSMISSION NETWORKS
3.19
On 8 October 2013 the AER remade its access arrangement decision for Multinet’s Victorian gas
distribution network. The decision was remade in accordance with orders from the Australian
Competition Tribunal (Tribunal).
3.20
The AER’s remade decision will increase Multinet’s opening capital base for 2013 by approximately $30
million. This accounts for the difference between the AER’s original approach of using the ESC’s
benchmark capex to adjust the capital base and Multinet’s actual capex for 2012. The AER’s decision
will result in average reference service distribution charges that are 3.2 per cent higher than average
reference service charges per GJ for the 2008-12 access arrangement period. Over the entire access
arrangement, a typical residential gas bill could be expected to increase by up to $3 or 0.3 per cent on
average each year.
3.21
On 21 November 2013 the AER released its remade access arrangement decision for APA GasNet’s
Victorian transmission system. The decision was remade in accordance with orders from the Tribunal.
3.22
The AER’s remade decision will increase APA GasNet’s revenue for the 2013-17 access arrangement
period by approximately $13.7 million. This accounts for the difference between the AER’s original
approach and the Tribunal’s decision. The AER’s decision will result in average reference service
transmission charges that are 7.6 per cent lower than average reference service charges per GJ for the
2008-12 access arrangement period. Over the entire access arrangement, a typical residential gas bill
could be expected to decrease by up to $4.40 on average each year.
Victorian gas network tariffs for 2014
3.23
On 22 November 2013 the AER approved gas distribution and ancillary reference services tariffs for the
period 1 January to 31 December 2014 in accordance with the 2013-17 Victorian access arrangements
for Multinet, Envestra Albury, Envestra Victoria and SP AusNet.
Electricity network regulation matters
VICTORIAN ELECTRICITY TRANSMISSION NETWORK DETERMINATION
3.24
On 15 October 2013 the AER published an issues paper on its determination for the Victorian electricity
transmission network managed by the Australian Energy Market Operator (AEMO). Stakeholders were
invited to lodge submissions by 25 November 2013. Two submissions were received. The AER also held
a public forum on 28 October for interested stakeholders.
3.25
On 16 December 2013 the AER issued its draft transmission determination for AEMO’s next regulatory
control period (1 July 2014 to 30 June 2019). Since submitting its proposal, AEMO has been consulting
with stakeholders about its proposed pricing methodology and proposed negotiating framework. AEMO
has since raised the possibility of amending the pricing methodology it originally proposed to the AER.
The AER’s draft decision does not approve AEMO’s proposed pricing methodology but does approve the
negotiating framework proposed by them. Stakeholders were invited to lodge submissions by
21
February 2014.
SP AUSNET 2014-15 REMOTE SERVICE CHARGES
3.26
On 28 October 2013 the AER released its draft decision on the regulation of advanced metering
infrastructure (AMI) remote services in Victoria for SP AusNet. The draft decision relates to SP AusNet’s
statement of proposed charges and terms and conditions for the provision of AMI remote services.
These charges and terms and conditions will take effect from 1 January 2014 to 31 December 2015.
Stakeholders were invited to lodge submissions by 15 November 2013. No submissions were received.
ACCCount 1 October to 31 December 2013
31
VICTORIAN ADVANCED METERING INFRASTRUCTURE CHARGES FOR 2014
3.27
On 31 October 2013 the AER published its decision on the Victorian distribution network service
providers’ advanced metering infrastructure 2014 charges, which is in effect from 1 January to
December 2014.
31
VICTORIAN ELECTRICITY DISTRIBUTION PRICING PROPOSALS 2014
3.28
On 31 October 2013, the Victorian distribution network service providers proposed annual network tariffs
for the period of 1 January 2014 to 31 December 2014.
ENDEAVOUR ENERGY – PROPOSED CHARGES
3.29
On 26 November 2013 the AER approved Endeavour Energy’s proposed capital and maintenance
charges for a new energy efficient luminaire. The methodology, inputs and assumptions used to
calculate the proposed charges were consistent with the AER’s 2009-14 NSW Distribution
Determination.
VICTORIAN NETWORK TARIFFS 2014
3.30
On 10 December 2013 the AER approved electricity network tariffs proposed by the Victorian distribution
network service providers CitiPower, Powercor, Jemena Electricity Networks, SP AusNet and United
Energy for the period 1 January 2014 to 31 December 2014.
3.31
Changes to average network tariffs vary between reductions of $11.40 to an increase of $48.30,
depending upon which distributor the customer is connected to. Across Victoria, average retail tariffs
would increase by approximately 1 per cent as a result of these tariffs in 2014. This compares to an
increase in the previous year of 5 per cent. Adding smart meter costs for 2014 increases this to
approximately 2 per cent. However, retail tariffs are also affected by changes to wholesale prices and
retail costs.
POWERLINK – COST PASS THROUGH APPLICATION
3.32
On 16 December 2013 the AER released its determination on a negative cost pass through application
received from Powerlink. Powerlink proposed a negative pass through amount of $12.8 million relating to
costs saved through the deferral of network augmentation projects in the Northern Bowen Basin area
following the Queensland Government’s decision to amend the network reliability standard for that area.
3.33
The AER determined Powerlink’s application, relating to the proposed net cost reductions, does not
satisfy the definition of a service standard event under the National Electricity Rules. In particular, the
amendment to the network reliability standard in the Northern Bowen Basin does not materially decrease
the costs to Powerlink of providing prescribed transmission services. As the AER found that a service
standard event did not occur, it could not determine a required pass through amount to be passed on to
network users.
ENERGEX – COST PASS THROUGH APPLICATION
3.34
On 17 December 2013 the AER released its determination on Energex’s pass through application
relating to higher than forecast feed-in tariff payments made during the 2012-13 regulatory year.
AER determined that $185.6 million is the approved pass through amount.
The
FRAMEWORK AND APPROACH FOR QLD ELECTRICITY DISTRIBUTION DETERMINATIONS
3.35
On 18 December 2013 the AER issued its preliminary position paper, Framework and approach for
Energex and Ergon Energy. Stakeholders were invited to lodge submissions by 19 February 2014.
Invitations to attend a forum on 30 January 2014 were extended to consumers and interested
stakeholders.
FRAMEWORK AND APPROACH FOR SA ELECTRICITY DISTRIBUTION DETERMINATION
3.36
On 18 December 2013 the AER issued its preliminary position paper, Framework and approach for
SA Power Networks. Stakeholders were invited to lodge submissions by 19 February 2014. Invitations to
attend a forum in the week commencing 20 January 2014 were extended to consumers and interested
stakeholders.
ELECTRANET–HEYWOOD INTERCONNECTOR UPGRADE
3.37
On 18 December 2013 the AER received an application for approval of a contingent project from
ElectraNet for the upgrade of the Heywood Interconnector. The project involves installing new equipment
to upgrade the 275kV transmission lines linking Victoria to South Australia and reconfiguration of the
ACCCount 1 October to 31 December 2013
32
132kV network in South Australia. Associated with this work is a project to be undertaken in Victoria by
the Australian Energy Market Operator to upgrade transformer capacity at Heywood. The combined
project will increase the power transfer capability between Victoria and South Australia. Stakeholders
were invited to lodge submissions by 7 February 2014.
SP AUSNET’S REGULATORY PROPOSAL 2014-17
3.38
On 11 October 2013 SP AusNet submitted a revised revenue proposal responding to the AER’s draft
decision on SP AusNet’s electricity transmission determination for the regulatory control period
1 April 2014 to 31 March 2017. Stakeholders were invited to lodge submissions by 1 November 2013.
Five submissions were received.
SERVICE TARGET PERFORMANCE INCENTIVE SCHEME
3.39
On 4 December 2013 the AER published a final position paper on the early application of version 4 of
the service target performance incentive scheme (STPIS) for transmission businesses. The final paper
also sets out the AER’s preliminary position on the application of the STPIS to TransGrid and Transend
during their transitional year. This preliminary position will assist in our preparation of the upcoming
framework and approach paper for TransGrid and Transend. The framework and approach paper will set
out the modifications to be made to the application of the STPIS for the transitional regulatory control
period for TransGrid and Transend.
Energy wholesale markets
QUARTERLY COMPLIANCE REPORT
3.40
On 22 October 2013 the AER released its quarterly compliance report for the quarter ending
30 September 2013. The report summarises the AER’s compliance monitoring and enforcement
activities in the wholesale gas and electricity markets. It provides an overview of the results of
investigations (including special reports into significant market or power system events), compliance
audits, targeted compliance reviews and rebidding inquiries undertaken during the quarter.
Energy retail markets
ALTERNATIVE ENERGY SELLERS ISSUES PAPER
3.41
On 14 October 2013 the AER published an issues paper, setting out our proposed approach to
regulating alternative energy selling models under the National Energy Retail Law. The paper discusses
several emerging business models, including solar power purchase agreements, which differ from the
traditional energy retailing model. The issues paper identifies high level principles for the regulation of
these businesses and proposes an approach to determining whether alternative energy sellers need a
retailer authorisation or a retail exemption. Stakeholders were invited to lodge submissions by
22
November 2013. 26 submissions were received.
CUSTOMER CONSULTATIVE GROUP
3.42
On 14 November 2013 the AER’s Customer Consultative Group met and discussed the AER’s work
program in 2013, and its priorities for 2014, They also discussed the lessons learned from the Consumer
Reference Group consultation process, as part of the Better Regulation, program and how the AER will
use this knowledge to improve its consumer engagement.
ANNUAL RETAIL LAW COMPLIANCE REPORT
3.43
On 26 November 2013 the AER issued its first annual retail law compliance report. The report describes
the compliance activities the AER undertook during 2012-13, and the compliance issues the AER
observed. The report covers the period from 1 July 2012 to 30 June 2013, during which energy retailers
and distributors in the ACT, Tasmania and South Australia adopted the Retail Law.
ANNUAL RETAIL LAW PERFORMANCE REPORT
3.44
On 26 November 2013 the AER issued its first annual performance report on the retail energy market
under the National Energy Retail Law. The report looks at retail market and retailers’ performance
including a number of active retailers, customer switching rates, the number of customers in debt,
average debt levels, the numbers disconnected for non-payment and the assistance provided to
customers experiencing payment difficulties. The report highlights customer service levels provided by
retailers, including the performance of their call centres and the rates of complaints across retailers. It
also includes the AER’s analysis on energy affordability and the impact of energy bills on the budgets of
ACCCount 1 October to 31 December 2013
33
low income households in Queensland, Victoria, New South Wales, South Australia, the ACT and
Tasmania.
PROMOTION OF ENERGY MADE EASY WEBSITE
3.45
On 17 December 2013 the AER released two resources to help consumers control their energy service.
The Energy Made Easy postcard, which won Avant card of the month earlier in 2013, is a fun reminder
for consumers to visit Energy Made Easy to compare offers, understand their bills, and take control of
their energy service. The Energy Made Easy poster, currently being displayed in Centrelink offices
across the country, has valuable tips for consumers who may need help paying their bills.
Authorisations and exemptions
PEOPLE ENERGY PTY LTD APPLICATION FOR RETAILER AUTHORISATION
3.46
On 11 October 2013 the AER approved People Energy Pty Ltd application for an electricity retailer
authorisation.
EXPRESS SOLAR PTY LTD APPLICATION FOR RETAIL EXEMPTION
3.47
On 14 October 2013 the AER accepted an application from Express Solar Pty Ltd for an exemption from
the requirement to hold a retailer authorisation. Stakeholders were invited to lodge submissions by
12 November 2013. One submission was received.
CO ZERO APPLICATION FOR ELECTRICITY RETAILER AUTHORISATION
3.48
On 28 October 2013 the AER accepted an application by CO Zero Pty Ltd for an electricity retailer
authorisation. Stakeholders were invited to lodge submissions by 29 November 2013. No submissions
were received. The AER approved the application on 12 December 2013.
POOLED ENERGY APPLICATION FOR RETAILER AUTHORISATION
3.49
On 29 October 2013 the AER accepted an application from Pooled Energy Pty Ltd for an electricity
retailer authorisation. Stakeholders were invited to lodge submissions by 29 November 2013. No
submissions were received. The AER approved the application on 12 December 2013
SMART COMMERCIAL SOLAR APPLICATION FOR INDIVIDUAL EXEMPTION
3.50
On 20 November 2013 the AER accepted an application from Smart Commercial Solar for an individual
electricity exemption. Stakeholders were invited to lodge submissions by 20 December 2013. No
submissions were received.
DEMAND MANAGER PTY LTD APPLICATION FOR INDIVIDUAL EXEMPTION
3.51
On 22 November 2013 the AER accepted an application from Demand Manager for an individual
electricity exemption. Stakeholders were invited to lodge submissions by 24 December 2013. No
submissions were received.
AUSTRALIAN CLEAN ENERGY FINANCE FUND APPLICATION FOR INDIVIDUAL EXEMPTION
3.52
On 16 December 2013 the AER accepted an application from Australian Clean Energy Finance Fund
(ACEFF) for an individual electricity exemption. Stakeholders were invited to lodge submissions by
16
January 2014.
COVA U PTY LTD APPLICATION FOR ELECTRICITY AND GAS RETAILER AUTHORISATION
3.53
On 19 December 2013 the AER accepted an application from Cova U Pty Ltd for electricity and gas
retailer authorisation. Stakeholders were invited to lodge submissions by 24 January 2014.
SOLAR WHOLESALERS APPLICATION FOR INDIVIDUAL EXEMPTION
3.54
On 20 December 2013 the AER accepted an application from Solar Wholesalers for an individual
electricity exemption. Stakeholders were invited to lodge submissions by 24 January 2014.
ACCCount 1 October to 31 December 2013
34
TELECOMMUNICATIONS
3.55
The ACCC is responsible for the economic regulation of the communications, broadcasting and audiovisual content sectors.
3.56
The communications industry in Australia is currently undergoing a long period of transition brought
about by technological developments, changes in consumer usage and most significantly, policy-induced
structural change.
3.57
As the competition regulator, the ACCC’s key goals in the communications sector are to:
3.58

maintain and promote competition and remedy market failure where it arises;

protect the interests of consumers and fair trading; and

support the economically efficient investment in, and use of, infrastructure.
In the December 2013 quarter the ACCC made a range of key decisions affecting the
telecommunications sector and released a number of reports. These matters are discussed below.
Decisions and determinations
NBN Co Special Access Undertaking
3.59
On 13 December 2013, the ACCC accepted the varied Special Access Undertaking (SAU) lodged by
NBN Co on 19 November 2013. The varied SAU was lodged in response to a variation notice issued by
the ACCC on 8 October 2013.
3.60
The SAU, which will operate until June 2040, includes terms and conditions for access to the NBN, and
provides the broad regulatory framework to facilitate effective engagement between NBN Co and access
seekers to negotiate commercial agreements.
3.61
In particular, the SAU forms the basis for how NBN Co can set its prices and change its product offerings
over time. The SAU also provides for continued ACCC oversight in areas such as pricing, products and
investments.
3.62
The SAU has a ‘modular’ structure that allows for different matters to be ‘locked in’ for different periods
of time which is intended to achieve a balance between long term certainty and flexibility. In addition, the
SAU is technology neutral and sufficiently flexible to accommodate any network design changes that
may arise from alternate policy settings such as those that may flow from the Strategic Review of the
NBN.
3.63
The acceptance of the SAU follows two years of extensive consultation and assessment by the ACCC.
In April 2013, the ACCC released a draft decision indicating that the SAU submitted by NBN Co in
December 2012 did not meet the relevant statutory criteria for acceptance. The ACCC then consulted on
a draft variation notice in July 2013 on the detailed changes required to address the ACCC’s concerns,
before issuing the final variation notice in October. This process followed the submission and withdrawal
of two previous undertakings dating back to December 2011.
Fixed services review
3.64
The fixed services review (FSR) is a review of access regulation for the existing fixed line
telecommunications services (not including NBN Co’s access services).
Fixed line services declaration inquiry
3.65
On 13 December 2013, the ACCC released a draft report in relation to the fixed line services declaration
inquiry. The ACCC proposes to extend the declaration of all six services for five years. The six fixed line
services covered by the existing declarations are the: unconditioned local loop service (ULLS), line
sharing service (LSS), public switched telephone network originating access service (PSTN OA), public
switched telephone network terminating access service (PSTN TA), wholesale line rental service (WLR)
and local carriage service (LCS). The current declarations expire on 31 July 2014.
3.66
As outlined in the draft report, the ACCC proposes to remove provisions exempting WLR and LCS
services in CBD areas from regulation. In addition, the ACCC proposes to clarify that the declaration for
WLR and LCS services does not extend to services supplied over the NBN.
3.67
The ACCC is inviting submissions on the proposals contained in the draft report until 14 February 2014
and intends to release a final decision in the first half of 2014.
ACCCount 1 October to 31 December 2013
35
Final access determinations for fixed line services
3.68
The FAD inquiry will determine the terms and conditions, including price, on which access providers will
be obliged to supply declared fixed line services (subject to the ACCC’s decision in the fixed line
services declaration inquiry).
3.69
On 11 December 2013, the ACCC decided to extend the decision making period for finalising the FAD
inquiry for the fixed line services to 11 July 2014.
3.70
This decision was made to ensure that the ACCC has the necessary time to consider forecast financial
and operational data received from Telstra in late November 2013 and to consult on price and non-price
issues.
3.71
The current FADs expire on 30 June 2014.The ACCC intends to release a discussion paper for the FAD
inquiry and commence public consultation on price and non-price issues in the coming months.
Draft report on the domestic transmission capacity service declaration inquiry
3.72
On 13 December 2013, the ACCC released the draft domestic transmission capacity service (DTCS)
declaration decision for consultation.
3.73
The ACCC has formed a preliminary view to vary and extend the declaration of the DTCS for a further
five years. The current DTCS declaration expires on 31 March 2014.
3.74
In its draft decision, the ACCC has proposed to:

revise its approach to assessing competition on transmission routes;

remove regulation on some metropolitan Exchange Serving Areas (ESAs) and regional
transmission routes that meet the revised competition criteria;

to re-declare some regional transmission routes that do not meet the new criteria;

maintain regulation of tail-end transmission services;

vary the DTCS service description to align it with the DTCS FAD; and

impose a transitional period of nine months before the removal of regulation and re-declaration of
routes take effect.
3.75
The DTCS is a type of high capacity wholesale transmission service that is used to carry large volumes
of voice, data and video traffic. It is an essential input into other telecommunications services including
voice, data and video services used by consumers. The declaration enables telecommunications
companies to access the DTCS in areas where there is little competition.
3.76
The DTCS will continue to be an essential input for retail broadband services during and following the
transition to the NBN.
3.77
The ACCC is inviting submissions on the proposals contained in the draft report until 14 February 2014.
The ACCC intends to publish the final declaration decision by 31 March 2014.
Draft report on the mobile terminating access service declaration inquiry
3.78
On 13 December 2013, the ACCC released a report detailing its draft decision in the declaration inquiry
on the mobile terminating access service (MTAS).
3.79
Regulation of the MTAS ensures that users of fixed or mobile voice services are able to connect to
mobile users on a different network. As outlined in the draft decision, the ACCC proposes to continue
regulating mobile voice call termination services and is also proposing to regulate SMS termination
services for the first time.
3.80
SMS termination is the price paid by one network to send a text message to an end-user on another
network. The ACCC’s draft view is that SMS termination rates are inefficiently high and at present this
cost is passed on to consumers.
3.81
The ACCC is inviting submissions on the proposals contained in the draft report until 14 February 2013.
It expects to release a final decision in the inquiry in mid-2014.
Variation to the digital radio access undertakings
3.82
On 19 December 2013, the ACCC accepted a variation to the digital radio access undertakings under
section 118NH(3) of the Radiocommunications Act 1992. The digital radio access undertakings sets out
ACCCount 1 October to 31 December 2013
36
the terms and conditions on which digital radio multiplex transmission licensees (the Licensees) provide
access to the digital radio multiplex transmission (DRMT) service.
3.83
The request for a variation to the digital radio access undertakings was made by the Licensees on
19 June 2013. The reason for the variation was to, among other things, facilitate new investments in the
DRMT service (specifically on-channel repeaters) to improve service coverage and quality in existing
broadcast areas.
3.84
The ACCC publicly consulted on the proposed variation and, following the consideration of submissions,
determined that the variation did not substantively alter the terms and conditions of access previously
approved by the ACCC.
Telstra’s Migration Plan
3.85
On 20 December 2013, the ACCC decided to reject Telstra’s draft pull through required measures and
direct Telstra to improve its process to notify wholesale customers of extended service outages caused
by NBN Co undertaking pull through activities. The ACCC gave this direction as it considered that
Telstra’s proposed process did not provide a firm commitment to provide notification to wholesale
customers in a timeframe that would:

help limit any potentially adverse consequences for end-users that may arise from a service
outage and the consequent inability to make or receive calls from their fixed line phone; and

ensure that, to the greatest extent practicable, Telstra’s wholesale customers will be in an
equivalent position to Telstra to respond to the needs of their end-user customers.
3.86
Telstra’s Migration Plan specifies how Telstra will migrate voice and broadband services from its copper
and HFC networks to the NBN as the fibre network is rolled out.
3.87
Pursuant to the Migration Plan, Telstra is required to develop measures relating to a process referred to
as “pull through” that NBN Co may use to connect premises to the NBN. In some cases, NBN Co may
need to use an existing copper or HFC line to pull the NBN fibre through the conduit that leads from the
street to the end-user’s premise in order to connect that premise to the NBN. The pull through process
will result in a temporary service outage to the existing communications services. If not properly
managed, the consequence of a service outage, particularly for vulnerable consumers, carers or
businesses that rely on their fixed line services for internet transactions or important calls, may be
severe.
Reports Released
NBN points of interconnect
3.88
On 12 December 2013, the Minister for Communications tabled in Parliament the report of a review
conducted by the ACCC on the NBN points of interconnection (POIs).
3.89
The review covered the policies and procedures the ACCC employed in identifying the POIs to the NBN
and examined the extent to which facilities are interconnected.
3.90
The review found that the ACCC’s processes in identifying the POIs were appropriate, and that, given
the early stage of the NBN rollout, the extent of interconnection at POIs was so far limited.
3.91
The review was required under section 151DC of the Act and was provided to the Minister in July 2013.
Telstra’s compliance with the retail price control arrangements
3.92
On 9 December 2013, the ACCC’s report on Telstra’s compliance with the retail price control
arrangements for the period 2012–13 was tabled in parliament by the Minister for Communications.
3.93
The ACCC must report annually to the Minister for Communications on the adequacy of Telstra’s
compliance with the retail price control arrangements. Based on the audited compliance report submitted
by Telstra, the ACCC considers that Telstra adequately complied with the price control arrangements in
2012–13.
3.94
The retail price controls are set by the Minister and consist of a series of price caps that apply to three
‘baskets’ of fixed voice services and ten specified connection services. Price caps are also set for
untimed local calls, calls from payphones and calls to internet dial-up numbers.
ACCCount 1 October to 31 December 2013
37
3.95
In addition, the retail price controls require Telstra to offer a package of services for low-income
households endorsed by consumer advocacy groups, and to offer basic services in non-metropolitan
areas under the same price terms as in metropolitan areas.
Accounting Separation Reports for the March & June 2013 Quarters
3.96
3.97
On 22 November 2013, the ACCC published Telstra’s current cost accounting report relating to the
accounting separation of Telstra for the second half and full year 2012-13. This report provides an
overview of the financial information that Telstra is required to provide to the ACCC in the form of fixed
asset, capital employed and capital adjusted profit and loss statements in respect of the core regulated
services provided over Telstra’s public switched telephone network (PSTN). These services include:

the unconditioned local loop service;

PSTN originating and terminating access services; and

the local carriage service.
On 18 December 2013, the ACCC published the imputation and non-price terms and conditions report
for the September 2013 quarter under the Accounting Separation regime for Telstra. The imputation
report provides imputation testing results for core telecommunications services supplied by Telstra to its
access seekers.
ACCCount 1 October to 31 December 2013
38
FUEL PRICE MONITORING
3.98
The ACCC closely follows developments in the petroleum industry and monitors the retail prices of
petrol, diesel and automotive liquefied petroleum gas (LPG) in all capital cities and around
180 regional locations. The ACCC also provides an annual monitoring report to the Minister under Part
VIIA of the Act.
3.99
The ACCC monitors movements in domestic retail petrol prices against movements in international
benchmark prices. In the case of regular unleaded petrol (RULP), movements in seven-day rolling
average retail RULP prices in the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth)
are compared with movements in seven-day rolling average prices for Singapore Mogas 95 Unleaded
lagged by 10 days (Mogas 95) in Australian cents per litre (cpl).
3.100
Chart 1 shows movements in these prices over the period 1 October to 31 December 2013. Retail RULP
prices are shown on the left hand side of the chart and Mogas 95 prices are shown on the right hand
side.
3.101
A comparison of movements in these two prices is indicative rather than an exact science and factors
other than international benchmark prices can influence retail petrol prices in the short run. This caveat
also applies to the comparisons of movements between retail diesel and automotive LPG prices and
their respective international benchmarks.
Chart 1 Movements in retail RULP prices and international benchmark prices—1 October to
31 December 2013
160
110
Five largest cities (7-day rolling average retail price), LHS
100
150
90
140
80
130
Australian cents per litre
Australian cents per litre
170
70
Singapore Mogas 95 Unleaded
(7-day rolling average price, lagged by 10 days), RHS
120
01-Oct-13 15-Oct-13 29-Oct-13 12-Nov-13 26-Nov-13 10-Dec-13 24-Dec-13
60
Note: the cyclical movements in the seven-day rolling average retail price series arise because petrol price
cycles in recent years have been longer than seven days. Traditionally the ACCC has used a seven-day rolling
average to smooth out the effects of the petrol price cycle.
3.102
As illustrated in the chart, retail RULP prices broadly followed Mogas 95 prices during the December
2013 quarter. Daily average retail RULP prices in the five largest cities increased by 2.4 cpl over the
quarter - from 149.0 cpl at the beginning of October to 151.4 cpl at the end of December. Mogas 95
prices increased by 5.0 cpl over the quarter.
3.103
Mogas 95 prices were broadly stable from early October until late November 2013. Prices increased in
the remainder of the quarter due to a shortfall in Libyan crude output and strong demand for refined
petroleum in the Asia-Pacific region.
3.104
The ACCC monitors the movement of retail diesel prices against the price of Singapore Gasoil with
10 parts per million (ppm) sulphur content, lagged by 11 days (Gasoil 10ppm). Chart 2 shows daily
average retail diesel prices on the left hand side of the chart and Gasoil 10 ppm prices on the right hand
side.
3.105
Daily average retail diesel prices in the five largest cities increased by 2.8 cpl over the quarter - from
158.5 cpl at the beginning of October to 161.3 cpl at the end of December. Gasoil 10 ppm prices
increased by 4.2 cpl over the quarter.
ACCCount 1 October to 31 December 2013
39
Chart 2 Movements in retail diesel prices and international benchmark prices—
1 October to 31 December 2013
170
110
160
100
150
90
140
80
Australian cents per litre
Australian cents per litre
Five largest cities
(daily average retail price), LHS
Singapore Gas Oil 10ppm
(7-day rolling average price, lagged by 11 days), RHS
130
01-Oct-13 15-Oct-13 29-Oct-13 12-Nov-13 26-Nov-13 10-Dec-13 24-Dec-13
70
3.106
The ACCC monitors the movement of retail automotive LPG prices against the average of Saudi Aramco
contract prices for propane and butane (Saudi CP), which are issued on the first day of the month (see
Chart 3).
3.107
Average retail automotive LPG prices in the five largest cities (on a seven-day rolling average basis)
increased by 14.9 cpl over the December 2013 quarter—from 79.5 cpl at the beginning of October to
94.4 cpl at the end of December.
3.108
The Saudi CP increased by 16.1 cpl over the December quarter. The increase in the Saudi CP in
December 2013 of 16.8 cpl was the largest monthly increase on record. This was due to tight supply in
the Middle East and strong demand from the Northern Hemisphere and South East Asia.
Chart 3 Movements in retail automotive LPG prices and international benchmark prices—1
October to 31 December 2013
Five largest cities
(7-day rolling average retail price), LHS
90
85
80
75
70
65
60
Saudi CP benchmark prices, RHS
55
45
01-Oct-13 15-Oct-13 29-Oct-13 12-Nov-13 26-Nov-13 10-Dec-13 24-Dec-13
Australian cents per litre
Australian cents per litre
95
50
40
ACCC Petrol monitoring report
3.109
On 11 December 2013 the ACCC released its 2013 report on the prices, costs and profits of unleaded
petrol in Australia. The key findings of the 2013 report are below.
ACCCount 1 October to 31 December 2013
40

International prices and domestic government taxes were again the key drivers of retail petrol
prices in Australia. International price of petrol plus taxes account for 89 per cent of the retail price
of petrol, while the local wholesale and retail industries account for 11 per cent of the final price.

While the average annual retail price at the pump for the five largest capital cities fell slightly in
2012-13 to 141.3 cpl compared with 142.8 cpl in 2011-12, prices remained at historically high
levels during 2012-13 due to high international prices.

In 2012-13 prices generally moved in line with the relevant international benchmark price
(Singapore Mogas 95). International prices of crude oil and refined petrol have remained at
historically high levels despite weak global economic conditions. The relatively high Australian
dollar again provided some protection from higher international prices. Due to lower taxes on fuel
compared with other countries, petrol prices in Australia are still among the lowest in the OECD.

Profits in the Australian downstream petroleum industry across all products in 2012-13 were
$775 million or around 0.9 cents per litre, compared with total industry profits of $408 million or
around 0.5 cents per litre in 2011-12. Lower losses in refining and higher profits in retail were the
main contributors to increased profits in the industry.

In 2012-13 net profits in the retail sector of the downstream petroleum industry increased to $535
million across all products and services, up 18.9 per cent on the previous year in real terms.
Profits from convenience store sales were up 17.1 per cent in real terms to $205 million.

In December 2013 the ACCC finalised its investigation into competition concerns in relation to
shopper docket fuel discount schemes offered by the major supermarkets.

The ACCC is also investigating whether price information sharing arrangements in relation to the
retail petrol sector may be in breach of the Act. This investigation is nearing completion and it is
anticipated it will be finalised in the coming months.

Competition from overseas refineries continues to affect Australia’s refinery sector. In April 2013
Shell announced the decision to sell its refinery at Corio and, in the event that a sale does not
eventuate, close the refinery and turn it into an import terminal. This announcement follows recent
refinery closures and are a reflection of the on-going challenges faced by Australia’s refinery
operations due to import competition.

Price cycles in major metropolitan markets have become more unpredictable as their duration
increased and the low-price day changed frequently. This has added to the frustration of
consumers, particularly those who take advantage of the low point in the cycle to purchase petrol.
Petrol price cycles are not responses to changes in cost but are the result of the profit-maximising
pricing policies of major fuel retailers.

Prices in regional areas again tended to be higher than in major cities. Lower volumes of petrol
sold, higher transport costs and lower levels of competition at regional retail sites are the main
reasons for higher prices in regional locations. Differences in responses to changes in
international prices between regional locations and capital cities sometimes accentuate the
country-capital city differential.

The ACCC continues to monitor prices in around 180 different regional locations and also pays
particular attention to transactions in regional areas involving sales of retail sites to ensure that
changes in ownership do not result in a substantial lessening of competition.
ACCCount 1 October to 31 December 2013
41
RAIL ACCESS
Decisions and determinations
Hunter Valley Access Undertaking
3.110
The Hunter Valley Access Undertaking requires the Australian Rail Track Corporation (ARTC) to submit
documentation to the ACCC for the purposes of conducting an annual compliance assessment.
3.111
In late May the ARTC submitted its compliance documentation for the 2012 calendar year. On 12 June
2013 the ACCC issued a consultation paper calling for submissions from interested parties. Five
submissions were received as of 12 July 2013. The ACCC also issued two information requests to the
ARTC on 5 August 2013 and 24 October 2013. The ACCC is continuing its annual compliance
assessment process.
3.112
On 28 June 2013 the ARTC submitted a variation application to include rail segments between Gap and
Turrawan into the Hunter Valley Access Undertaking. These segments service the Gunnedah Basin coal
mines Gunnedah, Boggabri and Narrabri, and may also service proposed developments at Watermark
and Maules Creek. The variation seeks to incorporate the segments between Gap and Turrawan in the
network effective on and from 1 January 2014. The ACCC is required to make a decision on whether to
consent to the variation application within 180 days (plus any clock stoppers).
3.113
On 23 July 2013 the ACCC issued a consultation paper calling for views of interested parties on the
proposed variation. Three submissions were received. The ACCC also issued a further information
request to the ARTC on 3 September 2013.
3.114
On 18 September 2013 the ACCC engaged economic consultants Marsden Jacob Associates to conduct
a review of the valuation of the Gap to Turrawan segments put forward by ARTC as part of its proposed
variation. On 12 December 2013 the ACCC released a position paper outlining its preliminary views on
the proposed variation and Marsden Jacob Associates’ final report. The ACCC expects to release its
final decision on the proposed variation by mid-March 2014.
BULK WHEAT EXPORT–ACCESS TO PORT TERMINAL
SERVICES
Access Undertakings
3.115
During 2011 the ACCC accepted undertakings under Part IIIA of the Act regulating access to services for
the export of bulk wheat at port terminals operated by GrainCorp Limited (Graincorp) at seven ports on
the East Coast; Australian Bulk Alliance (now Emerald) at Melbourne, Viterra Ltd (Viterra) at six ports in
South Australia and Cooperative Bulk Handling (CBH) at four ports in Western Australia.
3.116
The undertakings were provided to fulfil the access test in the Wheat Export Marketing Act 2008
(WEMA), which in part requires vertically integrated port operators to have a Part IIIA access
undertaking accepted by the ACCC. The undertakings allow for third party exporters to access the port
terminals operated by vertically integrated port terminal operators, ensuring competition in this significant
export market.
3.117
On 25 July 2013 Viterra submitted to the ACCC an application to extend its 2011 Undertaking to
30 September 2015 to obtain greater certainty about future regulation, pending the possible introduction
of a mandatory industry code. In addition to the application to extend the undertaking, Viterra also sought
to vary a number of existing provisions. On 20 November 2013 the ACCC released a draft decision
proposing to consent to the application to vary and extend.
3.118
On 12 November 2013, GrainCorp applied to the ACCC to vary its 2011 undertaking in relation to the
obligations at its Newcastle bulk wheat terminal. GrainCorp submits that there is now effective
competition in Newcastle that means it should be subject to less regulatory oversight. It also submits that
it is at a competitive disadvantage because the competing facilities are not regulated. Accordingly,
GrainCorp is seeking to vary its undertaking to exclude the majority of the current access provisions from
applying at Newcastle. On 12 December 2013 the ACCC released an issues paper seeking views on
GrainCorp’s application to vary.
ACCCount 1 October to 31 December 2013
42
Wheat Code
3.119
Legislative amendments made in December 2012 provide for the WEMA to be repealed on
1 October 2014, if the Minister for Agriculture has approved an industry code of conduct governing port
access and that code is declared as a mandatory code under the Act.
3.120
The Department of Agriculture, the ACCC and the Treasury all have a role in the development of the
code. The government is currently usiActng a set of key principles, provided by the industry
representative Code Development Advisory Committee, in developing a draft code.
PART IIIA
3.121
On 25 October 2013 the Productivity Commission (PC) provided its final report on the National Access
Regime to Government. The ACCC engaged with the PC to assist with the review, including
participating in public hearings. The release date for the report is to be determined by Government.
WATER
State Water price approval/determination pre-application consultation
3.122 Under the Water Charge (infrastructure) Rules 2010, the ACCC is the regulator responsible for approving
or determining the regulated charges of State Water Corporation of New South Wales (State Water)
applying in the Murray-Darling Basin (MDB) during the period 1 July 2014 to 30 June 2017. State Water's
MDB charges were previously regulated by the NSW Independent Pricing and Regulatory Tribunal
(IPART). IPART will continue to regulate charges for services in State Water's areas of operation in NSW
outside the MDB.
3.123 The ACCC received State Water’s pricing application on 31 July 2013. Subsequently, the ACCC released
an information paper to assist stakeholders in understanding the pricing application and to encourage
stakeholders to make constructive submissions. The ACCC received 29 submissions in response to the
information paper which are available to view on the ACCC website.
3.124 The ACCC held meetings with stakeholders over October and November 2013. The ACCC met with water
infrastructure operators, State Water customer service committees, user groups and affected town
councils. Issues discussed at these meetings and in the submissions to the information paper will
supplement the ACCC’s internal assessment of State Water’s pricing application and feed into the
ACCC’s Draft Decision.
ACCCount 1 October to 31 December 2013
43
4. INCREASING ENGAGEMENT
Increase our engagement with the broad range
of groups affected by what we do
OUTCOMES FROM INTERNATIONAL FORUMS AND
CONFERENCES
International partnerships and collaboration
4.1
The ACCC continued to engage closely with competition and consumer protection counterparts around
the world. The need for international cooperation has grown as trading across jurisdictional borders has
become more frequent and consumers are exposed to more complex transactions occurring across
multiple jurisdictions.
4.2
The ACCC regularly engages and exchanges information with other regulators internationally in respect
of investigations and merger assessments. This quarter the ACCC:
4.3

received and responded to 13 requests for information from agencies in Austria, Brazil, Canada,
Latvia, New Zealand, Papua New Guinea, Poland, Russia, and South Africa

made 19 requests for information to agencies in Canada, the European Community, Netherlands,
New Zealand, the United Kingdom and the United States of America.
Recognising the value of effective competition and consumer protection regulation and regional
cooperation, the ACCC continues to commit efforts to relationship and capacity building in the AsiaPacific region and beyond. This quarter the ACCC hosted delegations from Kenya, Korea, Nigeria, the
Philippines, Russia, Papua New Guinea, Singapore and the United Kingdom and engaged in the
following international activities.
COMPETITION RELATED ACTIVITIES
4.4
This quarter the ACCC was funded under the ASEAN Australia and New Zealand Free Trade Agreement
to deliver two expert secondments to the Vietnam Competition Authority (VCA) and Malaysia
Competition Commission (MCC) respectively to assist those institutions build their capacity to enforce
their respective competition laws. Under the same agreement, the ACCC also delivered an
Investigations Skills training course with Baker & McKenzie to the VCA in Hanoi.
4.5
In October 2013 the ACCC participated in the OECD Competition Committee meetings. The OECD's
Competition Committee and its working parties promote market-oriented reform by actively encouraging
and assisting decision-makers in government to tackle anti-competitive practices and regulations.
Australia submitted four papers to facilitate discussion on topics of remedies in cross-border merger
cases, the definition and treatment of confidential information by competition agencies, proposed
amendments to the 1995 OECD recommendation on International cooperation and competition issues in
the food chain industry.
4.6
In October 2013 the ACCC also participated in the International Competition Network Cartel Working
Group (ICN) workshop held in Cape Town, South Africa. This ICN workshop provides a forum for
competition regulators and private practitioners to discuss how to effectively address cross border cartel
conduct, and is a key annual product of the ICN Cartel Working Group’s subgroup on enforcement
cooperation, which is co-chaired by the ACCC and Canadian Competition Bureau. This year’s workshop
focussed on tackling roadblocks to effective cartel enforcement.
ACCCount 1 October to 31 December 2013
44
4.7
In November 2013 the ACCC attended the 12th ASEAN Experts Group on Competition meeting held in
November in Cebu, Philippines to participate in the first meeting of the newly approved Australia and
New Zealand Free Trade Agreement (AANZFTA) Competition Committee. The Committee provides a
framework for Australia’s ongoing engagement and cooperation with New Zealand and ASEAN
agencies.
4.8
In the same month the ACCC joined representatives of the five BRICS countries (Brazil, Russia, India,
China, South Africa) and representatives of 44 other countries for a conference in New Delhi with the
theme ‘Competition Enforcement in BRICS Countries: Issues and Challenges’. While in New Delhi, the
ACCC was also invited to present on national competition policy at the IIM Kashipur Conference in New
Delhi on 20 November 2013. IIM Kashipur is a pre-eminent business school in India that has, in
collaboration with the Competition Commission of India, commenced a competition program aimed at
business and government employees.
4.9
On 5 and 6 December 2013 the ACCC welcomed a senior delegation from the People’s Republic of
China Ministry of Commerce (MOFCOM) to Canberra. The delegation, which included the DirectorGeneral of China’s Anti-Monopoly Bureau (under MOFCOM), met with the ACCC Chairman and
representatives of the ACCC’s Mergers, Enforcement & Compliance and international teams to discuss
cooperation in future transnational merger reviews and the possibility of entering an MOU in 2014.
4.10
Also in December 2013, the ACCC participated in the 17th International Workshop on Competition Policy
held in Seoul. The ACCC acted as a moderator in a session on ‘The relationship between Competition
Authorities and Sectorial Regulators’ and gave a keynote speech on ‘Key Issues and the Investigative
Tools used in Major Cases of Unfair Trade Activities and Cartels’. The ACCC also helped run the OECDKorea Policy Centre (Competition Programme) training seminar on the topic of complex mergers.
CONSUMER PROTECTION RELATED ACTIVITIES
4.11
In October 2013 the ACCC attended the ’Competition Matters’ Inaugural Conference on Competition and
Regulation organised by the New Zealand Commerce Commission (NZCC) in Wellington. Commissioner
Sarah Court gave a key note speech outlining the ACCC’s experience with the ACL focussing
particularly on civil penalties, unfair contract terms and infringement notices, all of which are proposed to
be introduced into New Zealand consumer law shortly.
4.12
In October 2013 the ACCC presented at the inaugural workshop on e-commerce and issues relating to
online advertising, in Ottawa Canada, hosted jointly by the Canadian Competition Bureau and the
University of Ottawa’s Canadian Internet Policy and Public Interest Clinic.
4.13
Also in October the ACCC attended the International Consumer Protection Enforcement Network
(ICPEN) conference and best practices workshop in Panama City, Panama. The conference and
workshop was generally split into two themes: Travel, tourism and travel-related services, and children’s
online games and applications.
4.14
The ACCC’s Deputy Chair for Consumer Protection, Delia Rickard presented at the 2013 International
Conference on Consumer Protection: Child Consumer Protection in Taipei City, Taiwan in
December 2013.
PRODUCT SAFETY RELATED ACTIVITES
4.15
As the current chair of the OECD Product Safety Working Party the ACCC participates in the
International Consumer Product Health and Safety Organisation (ICPHOSO) forum for the exchange of
ideas and information on health and safety issues related to consumer products manufactured and
marketed in the global marketplace.
4.16
In October 2013 the ACCC ICPHOSO conference was held in Queensland and included product safety
stakeholders from Australia and off-shore such as manufacturers, retailers, regulators, consumer groups,
researchers, consultants and product safety testers.
4.17
A series of meetings of international product safety officials took place around the conference, including
the OECD Working Party on Consumer Product Safety chaired by the ACCC, the International
Consumer Product Safety Caucus (ICPSC) and an OECD workshop on product risk assessment.
Government officials from the European Commission, Latvia, Germany, Canada, Brazil, Colombia, New
Zealand, Fiji, Papua New Guinea, Japan, South Korea, Chinese Taipei, Malaysia, Vietnam Singapore
and Australia – including Australian state regulators – participated in the meetings and conference.
4.18
ACCC Chairman Rod Sims delivered a keynote address that named product safety as one of the
ACCC’s highest priorities and called on retailers to step up their compliance.
ACCCount 1 October to 31 December 2013
45
REGULATION RELATED ACTIVITES
4.19
In October 2013 the AER hosted the 28th meeting of the Energy Intermarket Surveillance Group (EISG)
conference in Adelaide. The EISG is the single peak and only international group that provides
coordination between energy market surveillance and enforcement bodies, such as the AER. EISG is a
not-for-profit organisation that coordinates the sharing of information and skills between its members.
This was only the fourth time the meeting has been hosted outside North America in the 13 years since
the group was formed.
4.20
In November 2013 the ACCC attended the Regulatory Policy Committee and the Network of Economic
Regulators (NER) and presented a paper on ‘Designing key performance indicators’.
CONSUMER ENGAGEMENT
Consumer Consultative Committee
4.21
The Consumer Consultative Committee (CCC) provides a forum through which consumer protection
issues can be addressed collaboratively between the ACCC and consumer representatives. Members of
the CCC include representatives from CHOICE, Financial Counselling Australia, the Public Interest
Advocacy Centre, the Australian Communications Consumer Action Network, the Brotherhood of St
Laurence, the Indigenous Consumer Assistance Network, Council on the Ageing, Consumer Law Action
Centre, the Australian Council of Social Services, Youth Action and Australian Multicultural Education
Services.
4.22
On 19 November 2013 the ACCC held its final CCC meeting for the year in Sydney. Members
considered issues faced by disadvantaged and vulnerable consumers as witnesses in litigation and the
ACCC provided an update on its work in the areas of online competition and consumer protection,
telecommunications, and energy door-to-door sales practices.
NATIONAL DISABILITY INSURANCE SCHEME
4.23
The ACCC has commenced working with key organisations in the disability sector to develop a program
that educates Australians with disabilities, their carers and businesses supplying the disability sector
about their rights and obligations under the ACL.
4.24
This project follows the recent launch of the National Disability Insurance Scheme (NDIS), which will
provide Australian consumers with disabilities with the option to manage personal budgets and make
purchasing decisions in relation to their disability needs.
4.25
The ACCC is currently consulting with key stakeholders to identify key competition and consumer
protection issues that may impact consumers with a disability accessing the NDIS. This consultation will
ultimately inform the education and compliance program, which will be rolled out in collaboration with the
state and territory consumer protection agencies.
Other consumer education and engagement activities
4.26
The ACCC’s education and engagement activities during the quarter focussed on promoting awareness
about consumer guarantees, online shopping and how consumers can protect themselves from scams.
4.27
On 5 December 2013 the ACCC launched a new video, Shop Smart Online, to help consumers and
small businesses understand their rights and obligations when shopping or selling online.
4.28
The video explains that all of the usual consumer rights apply when shopping with an Australian Online
business and also covers aspects of online shopping that can cause consumer confusion, such as
navigating unfamiliar selling platforms, figuring out which reviews to trust and paying securely. The Stay
Smart Online video was a joint initiative of the Australian, state and territory governments and in the first
three weeks the video attracted over 30 000 visits.
4.29
During the quarter, the AER released ‘Managing energy at home’ a publication for caseworkers that
contains detailed information about consumer rights, contracts, billing, dispute resolution, marketing and
disconnections. The AER also released a postcard with a slogan of ‘Compare, Understand, Control’ that
focuses on the key functions of the AER’s price comparator website Energy Made Easy. Over 40 000
were distributed to consumers during this campaign and to strategic partners including the South
Australian government, Kildonan and the Energy and Water Ombudsman of New South Wales (EWON).
ACCCount 1 October to 31 December 2013
46
4.30
The AER is working with the South Australian government to identify opportunities to promote Energy
Made Easy to energy customers. This includes distributing the Power to You publication to various
community organisations.
4.31
On 8 October 2013 the ACCC, in partnership with Kidsafe, state and territory consumer protection
agencies and Olympian Blake Gaudry, launched ‘Trampoline Safety – It’s flippin’ important’ campaign.
The campaign included an event at the South Australian Aquatic and Leisure Centre in Adelaide which
featured ACCC Commissioner and Campaign Spokesperson Sarah Court, the premiere of a safety
animation video and a performance by trampoline Olympian Blake Gaudry.
4.32
The ACCC participated in the Pregnancy, Babies & Children's Expo in Melbourne 25-27 October 2013.
4.33
On 17 December 2013 the ACCC launched a national education campaign to complement the ACCC
and state and territory product safety agencies surveillance activities for the Integrated Sunglasses
Project. The campaign aims to raise national awareness of risks associated with unsafe sunglasses and
provide Australian consumers with practical safety tips when purchasing sunglasses.
BUSINESS ENGAGEMENT
Franchising Consultative Committee
4.34
The Franchising Consultative Committee (FCC) is a forum through which competition and consumer law
concerns relating to the franchising sector can be considered collaboratively. FCC members are drawn
from a range of sectors and include franchisees, franchisors, business advisors, researchers and
educators.
4.35
One FCC meeting was held this quarter. Members received an update from the ACCC on its franchising
related enforcement and compliance activities, and heard the latest from Treasury on the Franchising
Code review. The Office of the Franchising Mediation Adviser provided a breakdown of the franchising
disputes it had recently dealt with and special guest Rupert Barkoff presented on current franchising
issues in the USA.
4.36
The ACCC has conducted a review of the membership of the FCC. Following an assessment of the
applications, the ACCC has appointed the following members for the next two years:

Kym De Britt – Franchise Council of Australia

The Hon. David Beddall – Franchisee Association of Australia

Gary Hu – Michel’s Patisserie franchisee

Michael Marinos – Billy Baxter’s franchisor

Jenelle Fountain – Tatts Lotteries franchisor

Derek Sutherland – HWL Ebsworth Lawyers

Nigel Smith – Federal Chamber of Automotive Industries

Jason Gehrke – Franchise Advisory Centre

Colin Duckworth – Australia Motor Industry Federation

Tim Hantke – Franchising Solutions

Professor Lorelle Frazer – Griffith University

Dr Jenny Buchan – University of New South Wales
Small Business Consultative Committee
4.37
The Small Business Consultative Committee (SBCC) was established to inform the ACCC of emerging
competition and consumer law issues relating to small businesses. SBCC members are drawn from a
range of sectors and include industry associations, business advisers and academics.
4.38
The SBCC met once this quarter. Topics discussed included fake online reviews, carbon pricing and
current ACCC enforcement and compliance activities relevant to small business. Dr Warren Mundy also
presented on the key findings from the Productivity Commission’s recent report on Regulator
Engagement with Small Business.
ACCCount 1 October to 31 December 2013
47
4.39
The ACCC recently reviewed the membership of the SBCC, appointing the following members for the
next two years:

Richard Calver – Master Builders Australia

Cate Clunies-Ross – Australian Chamber of Commerce and Industry

Jos de Bruin – Master Grocers Australia

Jock Kreitals – Real Estate Institute of Australia

Russell Zimmerman – Australian Retailers Association

Dr Paull Weber – School of Management, Curtin Business School

Liz Westover – The Institute of Chartered Accountants in Australia

Peter Strong – Council of Small Business of Australia (COSBOA)

Jackie Zelinsky – Business Enterprise Centres Australia

Richard Dudley – Australian Motor Industry Federation

Andrew Conway – Institute of Public Accountants

Jeff Rogut – Australasian Association of Convenience Stores Limited

Phillip Kemp – Business Incubation and Innovation Australia

Lauretta Stace – Fitness Australia

Yolanda Vega – Australian Women Chamber of Commerce & Industry

Genevieve Quilty – Optometrists Association Australia

Colin Gray -- Freshmark, The NSW Chamber of Fruit & Vegetable Industries Inc
Online education programs
4.40
4.41
The ACCC now has three free online education programs, which can all be accessed via
www.ccaeducationprograms.org:
a.
a program for small businesses, which aims to help small businesses better understand their
rights and responsibilities under the Act when dealing with their customers, suppliers and other
businesses. The program was launched in April 2013.
b.
a program for tertiary students, which was launched in November 2013. The program aims to
educate students enrolled in commerce, management, business law, marketing, economics
and other business courses about Australia’s competition and consumer laws and some of the
issues that students are likely to encounter in their future business careers.
c.
a franchising pre-entry education program, administered by Griffith University. This program is
designed to provide potential franchisees with the information they need to make an informed
decision about whether to buy a franchise. Around 5,500 people have enrolled in this program
since its release in July 2010.
Around 10 000 unique visitors have gone to www.ccaeducationprograms.org since April 2013.
Other business education and engagement activities
4.42
The ACCC continued to deliver presentations to business audiences, attend business-related events and
expos, and distribute small business-related publications and articles through industry associations.
Highlights this quarter included the ACCC’s attendance at the National Franchise Convention, the
Institute of Public Accountants National Congress and the Small Business Development Conference, as
well as presentations to the Business Educators of Western Australia and at the Small Business
Solutions Open Forum in Melbourne.
ACCCount 1 October to 31 December 2013
48
MAJOR SPEECHES
4.43
During the December quarter the ACCC and AER delivered 38 addresses including:
Keynote Address: ICPHSO Asia-Pacific Symposium
Chairman Rod Sims - 9 October 2013
Giving consumers a say on energy network prices
Andrew Reeves - 16 October 2013
Franchise Legal Symposium: ACCC Update
Deputy Chair Dr Michael Schaper - 20 October 2013
Thoughts on market concentration issues
Chairman Rod Sims - 30 October 2013
Keynote Address: RBB Economics Conference
Chairman Rod Sims - 29 November 2013
ACCCount 1 October to 31 December 2013
49
5. APPENDICES
COMPLAINTS AND INQUIRIES
5.1
During the December 2013 quarter the ACCC received 46, 738 complaints and enquiries from
businesses and consumers (email 26, 665, telephone 19, 776 and letter correspondence 297).
5.2
Of these, 281 matters were escalated for assessment:
Table 5: ACCC complaints, investigations and litigation progression
Category
Dec 2013
quarter
Contacts received (phone, email and letters)
46, 738
Under assessments commenced
281
Initial investigations commenced
121
In-depth investigations commenced
41
First instance litigation commenced
8
Table 6: Geographic location of inquirers and complainants recorded in the national database
State
ACL
Scams
(ACL &
Scams)
Anticompetitive
Practices
Industry
Codes
Other
Total
NSW
3 158
6 551
9 709
165
23
1 920
11 817
VIC
3 298
4 895
8 193
126
33
1 343
9 695
QLD
2 648
4 408
7 056
89
40
977
8 162
WA
1 178
1 762
2 940
64
10
399
3 413
SA
1 144
1 612
2 756
44
12
490
3 302
ACT
510
1 219
1 729
16
3
212
1 960
TAS
227
499
726
10
1
83
820
NT
149
163
312
7
1
50
370
Overseas
87
417
506
2
0
73
581
Not
Supplied
85
9
94
11
2
27
134
Note: single contacts may involve multiple issues. Contacts recorded differ from contacts received as not all
contacts received are entered into the ACCC database and some may be entered at a later date.
ACCCount 1 October to 31 December 2013
50
Table 7: Complaints and inquiries – top ten by industry
Industry
Non-store retailing (predominantly online sales)
Contacts
1035
On selling electricity and electricity market operation
789
Other store-based retailing
522
Other electrical and electronic goods retailing
412
Wired telecommunications network operation
401
Motor vehicle manufacturing
366
Supermarket and grocery stores
351
Fuel retailing
347
Department stores
334
Electrical, electronic and gas appliance retailing
325
Note: single contacts may involve multiple industries
Table 8: Top 10 scam categories reported to the ACCC
Scam category
Contacts
Advanced fee /up-front payment
6586
Phishing & identity theft (incl. banking & online account)
4128
Computer hacking (incl. malware and viruses)
2189
Online auction and shopping
1952
Lottery and sweepstakes
1190
False billing
1174
Unexpected prizes
774
Job and employment
762
Dating and romance (incl. adult services)
634
Spam and ‘free’ internet offers
285
ACCCount 1 October to 31 December 2013
51
Table 9: Top possible contraventions of the Competition and Consumer Act 2010 (excluding
scams and other miscellaneous categories)
Fair trading and consumer protection including Australian Consumer Law
Contacts
Guarantee as to acceptable quality
2,823
Guarantee as to due care and skill
720
Guarantee relating to the supply of goods by description, sample or
demonstration
291
Guarantees as to fitness for a particular purpose etc.
247
Guarantees as to reasonable time for supply
234
Guarantee as to fitness for any disclosed purpose etc.
222
Misleading or deceptive conduct
2,508
Wrongly accepting payment
816
False representation price
343
Safety Standards
300
Effective competition and informed markets Parts IV and IVB
Contacts
Contravention of industry Codes
122
Misuse of market power
80
Exclusive dealing
71
ACCCount 1 October to 31 December 2013
52
ENFORCEMENT OUTCOMES & MATTERS IN COURT
Litigation commenced
COMPETITION (4)
Anti-competitive agreements
Australia and New Zealand Banking Group Ltd (appeal)
commenced
jurisdiction
Cartels
|
|
12 December 2013
Federal Court Sydney
Mitsubishi Electric Australia Pty Ltd
commenced
jurisdiction
Cartels
10 December 2013
Federal Court Brisbane
Colgate-Palmolive Pty Ltd & Ors
commenced
jurisdiction
Resale price maintenance
|
|
|
|
19 November 2013
Federal Court Adelaide
NSK Australia Pty Ltd
commenced
jurisdiction
|
|
13 December 2013
Federal Court Sydney
CONSUMER PROTECTION (5)
Consumer protection in Energy
sector
AGL South Australia Pty Ltd
Consumer guarantees
Fisher & Paykel Customer Services & Anor
commenced
jurisdiction
commenced
jurisdiction
Credence claims
12 November 2013
Federal Court Sydney
|
|
10 December 2013
Federal Court Sydney
Reebok Australia Pty Ltd
commenced
jurisdiction
Credence claims
|
|
4 December 2013
Federal Court Adelaide
Pirovic Enterprises Pty Ltd
commenced
jurisdiction
Credence claims
|
|
|
|
17 December 2013
Federal Court Perth
Snowdale Holdings Pty Ltd
commenced
jurisdiction
ACCCount 1 October to 31 December 2013
|
|
9 December 2013
Federal Court Perth
53
Litigation ongoing
COMPETITION (8)
Cartels
Air New Zealand Ltd
commenced
|
jurisdiction
|
awaiting judgement
Anti-competitive agreements
Cement Australia
commenced
|
jurisdiction
|
12 May 2010
Federal Court Sydney
12 September 2008
Federal Court Brisbane
interim orders made 12 September 2013
Price fixing
Flight Centre Ltd
commenced
|
jurisdiction
|
9 March 2012
Federal Court Brisbane
awaiting judgment on penalty
Cartels
P.T. Garuda Indonesia Ltd
commenced
|
2 September 2009
jurisdiction
|
Federal Court Sydney
awaiting judgement
Cartels
Prysmian Cavi e Sistemi
commenced
|
23 September 2009
jurisdiction
|
Federal Court Adelaide
continues following settlement with some of the parties
Cartels
Yazaki Corporation & Australian Arrow Pty Ltd
commenced
|
13 December 2012
jurisdiction
|
Federal Court Melbourne
Cartels
Renegade Gas Pty Ltd, Speed-E-Gas Ltd & Ors
commenced
|
23 August 2012
jurisdiction
|
Federal Court Sydney
Misuse of market power
Visa (Inc) & Ors
commenced
|
jurisdiction
|
4 February 2013
Federal Court Sydney
CONSUMER PROTECTION (23)
Unfair contract terms
Advanced Medical Institute Pty Ltd & Ors
commenced
|
21 December 2010
jurisdiction
|
Federal Court Melbourne
trial hearing continues
Consumer guarantees
Avitalb Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
jurisdiction
|
Federal Court Perth
Consumer protection
BAJV Pty Ltd t/as Europcar (appeal)
commenced
|
1 August 2013
jurisdiction
|
Full Federal Court Hobart
Consumer protection
Breast Check Pty Ltd
commenced
|
jurisdiction
|
ACCCount 1 October to 31 December 2013
21 December 2011
Federal Court Perth
54
awaiting judgment
Consumer guarantees
Bunavit Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
jurisdiction
|
Federal Court Brisbane
Credence claims
Coles Supermarkets Australia Pty Ltd
commenced
|
12 June 2013
jurisdiction
|
Federal Court Melbourne
Misleading claims
Dateline Imports Pty Ltd
commenced
|
25 June 2012
jurisdiction
|
Federal Court Brisbane
awaiting judgement
Credence claims
DuluxGroup (Australia) Pty Ltd
commenced
|
5 December 2012
jurisdiction
|
Federal Court Perth
Door-to-door selling
Energy Australia Pty Ltd (formerly TRUenergy Pty Ltd)
commenced
|
7 March 2013
jurisdiction
|
Federal Court Melbourne
Consumer guarantees
Harvey Norman Gordon Superstore Pty Ltd
commenced
|
20 November 2012
jurisdiction
|
Federal Court Sydney
Consumer protection
Homeopathy Plus! Australia Pty Ltd & Ors
commenced
|
19 February 2013
jurisdiction
|
Federal Court Sydney
awaiting judgement
Vulnerable and disadvantaged
persons
Lux Distributors Pty Ltd (appeal)
commenced
|
1 March 2013
jurisdiction
|
Full Federal Court Melbourne
On 12 September 2013 Lux filed an application for Special
Leave of the High Court to appeal the decision of the Full Court
Consumer guarantees
Mandurvit Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
jurisdiction
|
Federal Court Perth
Door-to-door selling
Origin Energy Electricity Ltd & Ors
commenced
|
26 September 2013
jurisdiction
|
Federal Court New South Wales
Consumer guarantees
Oxteha Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
jurisdiction
|
Federal Court Brisbane
Credence claims
P & N Pty Ltd & Ors
commenced
|
jurisdiction
|
awaiting judgement
Contempt
Peter Foster
commenced
jurisdiction
Consumer protection
Safe Breast Imaging Pty Ltd & Anor
commenced
|
21 December 2011
ACCCount 1 October to 31 December 2013
|
|
3 May 2013
Federal Court Adelaide
11 November 2011
Federal Court Brisbane
55
jurisdiction
|
awaiting judgement
Federal Court Perth
Small business scam
Safety Compliance Pty Ltd & Ors
commenced
|
16 April 2012
jurisdiction
|
Federal Court Sydney
awaiting judgement
Scam
Sensaslim Australia
commenced
|
jurisdiction
|
15 July 2011
Federal Court Sydney
Awaiting judgment
Unsolicited consumer
agreements
Startel Communication Co Pty Ltd
commenced
|
18 July 2013
jurisdiction
|
Federal Court Brisbane
Misleading advertising
Taxsmart Group Pty Ltd & Ors
commenced
|
20 June 2013
jurisdiction
|
Federal Court Melbourne
Vulnerable and disadvantaged
persons
Titan Marketing Pty Ltd & Anor
commenced
|
14 June 2013
jurisdiction
|
Federal Court Brisbane
ACCCount 1 October to 31 December 2013
56
Litigation concluded
COMPETITION (3)
Anti-competitive agreements
Australia and New Zealand Banking Group Ltd
commenced
|
25 July 2007
concluded
|
18 November 2013
conduct
|
alleged price fixing
jurisdiction
|
Federal Court Brisbane
outcome
|
ACCC’s case was
dismissed. The ACCC has
appealed the decision.
Resale price maintenance
Mitsubishi Electric Australia Pty Ltd
commenced
|
19 November 2013
concluded
|
19 December 2013
conduct
|
resale price maintenance of
air conditioning products
jurisdiction
|
Federal Court, Adelaide
outcome
|
pecuniary penalties totalling $2.2
million, declarations, injunctions
and contribution to ACCC’s costs
Cartels
Koyo Australia Pty Ltd
commenced
|
concluded
|
conduct
|
jurisdiction
outcome
|
|
15 July 2013
18 October 2013
price fixing conduct in relation to
the supply of ball bearings products
Federal Court Sydney
pecuniary penalty $2 million,
injunctions and implementation of a
competition and consumer law
compliance training program
CONSUMER PROTECTION (14)
Door-to-door selling
AGL Sales Pty Ltd & Ors
commenced
concluded
conduct
jurisdiction
outcome
Small business scam
|
|
|
|
|
26 March 2012
13 December 2013
door-to-door selling practices
Federal Court Melbourne
pecuniary penalty totalling $60,000.
Together with the earlier penalty
ordered against parties on 1 June
2013, the total pecuniary penalties
ordered in this matter total $1.815
million.
Artorios Ink Pty Ltd & Ors
commenced
|
10 September 2012
concluded
|
3 December 2013
conduct
|
misleading or deceptive conduct in
relation to the supply of ink
cartridges to five small businesses
jurisdiction
|
Federal Court Melbourne
outcome
|
pecuniary penalty totalling
$100,000, declarations,
undertakings that the two individual
respondents would not be directors,
or be involved in the management
of a corporation for a period of five
years and contribution to costs
ACCCount 1 October to 31 December 2013
57
Door-to-door selling
Australian Power & Gas Company Ltd
commenced
|
9 September 2013
concluded
|
28 November 2013
conduct
|
door-to-door selling practices
jurisdiction
|
Federal Court Brisbane
outcome
|
pecuniary penalty totalling $1.1
million, declarations, corrective
advertising and contribution to
ACCC costs
Consumer guarantees
Camavit Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
outcome
|
13 December 2013
conduct
|
false or misleading representations
to customers regarding consumer
guarantee rights
jurisdiction
|
Federal Court Sydney
outcome
|
pecuniary penalty $32,000,
declarations, injunctions, in-store
corrective notices and
implementation of a consumer law
compliance program
Vulnerable and disadvantaged
persons
Excite Mobile Pty Ltd & Ors
commenced
|
7 December 2011
concluded
|
29 November 2013
conduct
|
false, misleading and conscionable
conduct and using undue coercion
in relation to the selling and
obtaining payment for mobile phone
services.
jurisdiction
|
Federal Court Adelaide
outcome
|
pecuniary penalty totalling
$658,500, disqualification orders
against two directors, injunctions,
declarations and costs.
Consumer guarantees
HP Superstore Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
outcome
|
9 December 2013
conduct
|
false or misleading representations
to customers regarding consumer
guarantee rights
jurisdiction
|
Federal Court Melbourne
outcome
|
pecuniary penalty of $28,000,
declarations, injunctions, in-store
corrective notices and
implementation of a consumer law
compliance program
Credence claims
Luv-a-Duck Pty Ltd
commenced
|
concluded
|
conduct
|
jurisdiction
outcome
ACCCount 1 October to 31 December 2013
|
|
15 March 2013
1 November 2013
misleading or deceptive conduct,
false representations in relation to
advertising for its duck meat
products
Federal Court Melbourne
pecuniary penalty of $360,000,
declarations, injunctions, corrective
notices, implementation of a
compliance program and
contribution to ACCC costs
58
Consumer guarantees
Launceston Superstore Pty Ltd (trading as Harvey
Norman)
commenced
|
12 June 2013
concluded
|
9 December 2013
conduct
|
false or misleading representations
to customers regarding consumer
guarantee rights.
jurisdiction
|
Federal Court Melbourne
outcome
|
pecuniary penalty of $32,000,
declarations and injunctions
Consumer guarantees
Moonah Superstore Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
concluded
|
9 December 2013
conduct
|
false or misleading representations
to customers regarding consumer
guarantee rights
jurisdiction
|
Federal Court Melbourne
outcome
|
pecuniary penalty of $28,000,
declarations, injunctions, in-store
corrective notices and
implementation of a consumer law
compliance program for making
Consumer guarantees
Salecomp Pty Ltd (trading as Harvey Norman)
commenced
|
12 June 2013
concluded
|
9 December 2013
conduct
|
false or misleading representations
to customers regarding consumer
guarantee rights
jurisdiction
|
Federal Court Melbourne
outcome
|
pecuniary penalty of $28,000,
declarations, injunctions, in-store
corrective notices and
implementation of a consumer law
compliance program
Group buying
Scoopon Pty Ltd
commenced
|
concluded
|
conduct
|
jurisdiction
outcome
Misleading conduct
|
|
3 July 2013
17 December 2013
misleading and deceptive conduct
and making false and misleading
representations to businesses and
consumers through its online group
buying business
Federal Court Brisbane
pecuniary penalty of $1 million,
declarations, injunctions,
further develop and enhance its
compliance program, community
service orders and contribution to
ACCC costs
The Jewellery Group (trading as Zamels) (appeal)
commenced
|
29 January 2013
concluded
|
29 November 2013
conduct
|
false or misleading representations
by Zamel’s use of two price
advertising in catalogues and a flyer
jurisdiction
|
Federal Court Adelaide
outcome
|
Full Court dismissed Zamel’s
appeal and upheld the earlier
decision. The earlier orders of a
$250,000 penalty, declarations,
corrective notices, implementation
of a compliance program and
ACCCount 1 October to 31 December 2013
59
ACCC costs apply
Telecommunications
TPG Internet Pty Ltd (appeal)
commenced
|
19 August 2013
concluded
|
12 December 2013
jurisdiction
|
High Court of Australia
outcome
|
High Court allowed the ACCC’s
appeal in relation to TPG’s
advertisements for its Unlimited
ADSL2+ broadband internet
service. The High Court overturned
the Full Court’s finding that TPG’s
advertisements were not misleading
and restored the $2 million penalty
imposed by the primary judge.
Credence claims
Turi Foods Pty Ltd & Ors
commenced
|
5 September 2011
concluded
|
30 October 2013
conduct
|
false, misleading or deceptive
conduct in relation to advertising of
chicken meat products
jurisdiction
|
Federal Court Melbourne
outcome
|
Baida/Bartter and Australian
Chicken Meat Federation were
ordered to pay pecuniary penalties
totalling $420,000, declarations and
ACCC costs
Undertakings accepted and Infringement Notices Paid
87B Undertakings
COMPETITION AND CONSUMER ACT (2)
“To promote vigorous lawful competition and informed markets”
Shopper dockets
Coles Group Ltd, Coles Supermarkets Australia Pty Ltd
and Eureka Operations Pty Ltd
S87B undertaking
dated 6 December 2013
The ACCC accepted a court enforceable undertaking from
Coles Group Ltd, Coles Supermarkets Australia Pty Ltd and
Eureka Operations Pty Ltd (together Coles) following an ACCC
investigation into fuel savings offers made by Coles
Supermarkets to customers in 2012 and 2013 in the amount of
8 cents per litre and in some cases higher amounts.
Coles has undertaken that it will not make or allow fuel
discounts where those discounts are:
Shopper dockets

Not funded wholly by the fuel subsidiary or division
of Coles;

Greater in value than 4 cents per litre and,
contingent on purchases of goods or services at a
store or business separate from the retail fuel
outlet.
Woolworths Ltd
S87B undertaking
ACCCount 1 October to 31 December 2013
60
dated 6 December 2013
The ACCC accepted a court enforceable undertaking from
Woolworths following an ACCC investigation into fuel savings
offers made by Woolworths to customers in 2012 and 2013 in
the amount of 8 cents per litre and in some cases higher
amounts.
Woolworths has undertaken that it will not make or allow fuel
discounts where those discounts are:

not funded wholly by the fuel subsidiary or division
of Woolworths; or

greater in value than 4 cents per litre and,
contingent on purchases of goods or services at a
store or business separate from the retail fuel
outlet.
AUSTRALIAN CONSUMER LAW (4)
“To encourage fair trading, protection of consumers and product safety”
Product safety
Brand Republic Pty Ltd
S87B undertaking
dated 16 October 2013
The ACCC accepted a court enforceable undertaking from
Brand Republic, operator of GAP retail stores, after it sold five
different children’s nightwear garments that did not comply with
the mandatory standard for children’s nightwear.
Brand Republic has undertaken that it will not supply or offer to
supply products that are subject to a prescribed standard
unless they comply with that standard, publish recall notices for
the garments, provide refunds to consumers who return the
garments and implement a trade practices compliance
program.
Brand Republic also paid five infringement notices totalling
$51,000 in relation to this conduct.
Credence claims
Game Farm Pty Ltd
S87B undertaking
dated 26 November 2013
The ACCC has accepted a court enforceable undertaking from
Game Farm after it acknowledged that it was likely to have
contravened the ACL by representing on its packaging and
website that its chicken, duck, quail, spitchcock and turkey are
‘range reared’, when in fact its birds are grown in large
commercial sheds with no access to the outdoors.
Game Farm has undertaken to refrain from engaging in similar
conduct, send corrective letters to its major regular customers
and establish and implement a trade practices compliance
program.
Game Farm also paid two infringement notices totalling
$20,400 in relation to this conduct.
Door-to-door selling
AGL Energy Ltd
S87B undertaking
dated 28 November 2013
The ACCC has accepted a court enforceable undertaking from
AGL Energy Ltd in relation to the court proceedings ACCC v
Australian Power & Gas Company Ltd QUD 621 of 2013.The
proceedings relate to door-to-door selling practices.
ACCCount 1 October to 31 December 2013
61
In October 2013, AGL completed its acquisition of APG and
therefore APG is wholly owned by AGL.
Separate to the proceedings, AGL offered to the ACCC an
undertaking that it would extend its existing trade practices
compliance program to include APG.
Consumer guarantees
Apple Pty Ltd
S87B undertaking
dated 17 December 2013
The ACCC has accepted a court enforceable undertaking from
Apple Pty Ltd following an investigation into Apple’s consumer
guarantees policies and practices and representations about
consumers’ rights under the Australian Consumer Law.
The ACCC was concerned that Apple had made a number of
false or misleading representations to a number of consumers
regarding their consumer guarantee rights, including that Apple
was not required to provide a refund, replacement or repair to
consumers in circumstances where these remedies were
required by the consumer guarantees in the ACL.
In the undertaking Apple has publicly acknowledged that,
without limiting consumers’ rights, Apple will provide its own
remedies equivalent to those remedies in the consumer
guarantee provisions of the ACL at any time within 24 months
of the date of purchase. Apple has also acknowledged that the
ACL may provide remedies beyond 24 months for a number of
its products.
Apple has undertaken to:

not make representations to consumers which the ACCC
was concerned were contrary to the ACL;

continue to offer a consumer redress program in which
consumers potentially affected by the alleged conduct can
go to Apple to have their claims re-assessed by Apple in
accordance with the ACL

continue to implement an Apple program to improve ACL
compliance, which includes improved training for Apple
sales staff and management staff and all Apple call centre
representatives who have contact with Australian
consumers

continue to monitor and review its ACL compliance going
forward to ensure the conduct of concern to the ACCC
does not occur again

maintain a webpage aimed at providing information and
clarifying the differences between the coverage provided
by the ACL and Apple’s voluntary limited manufacturer’s
warranty

continue to make available in its retail stores in Australia
copies of the ACCC’s ‘Repair, Replace, Refund’ brochure.
Infringement Notices
TRADER
DATE PAID AND AMOUNT
Brand Republic Pty Ltd
11 October 2013
Five notices totaling $51,000
Game Farm Pty Ltd
20 November 2013
Two notices totaling $20,400
ACCCount 1 October to 31 December 2013
62
ACCCount 1 October to 31 December 2013
63