Report
ACCCount
A report of the Australian Competition and
Consumer Commission’s and Australian
Energy Regulator’s activities
1 October to 31 December 2012
Australian Competition and Consumer Commission
23 Marcus Clarke Street, Canberra, Australian Capital Territory 2601
© Commonwealth of Australia 2013
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
CONTENTS
Overview........................................................................................................................... 5
1. 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
9
Mergers ........................................................................................................... 9
Remedy market failure
11
Authorisations and notifications..................................................................... 11
2. Protect the interests and safety of consumers and support fair trading in
markets ..................................................................................................................... 18
Consumer protection outcomes
18
Product safety ............................................................................................... 24
3. Promote the economically efficient operation of, use of and investment in
monopoly infrastructure ......................................................................................... 27
Energy
27
State of the Energy Market report ................................................................. 27
Consultation on the new regulation reform program in 2013 ........................ 27
Decisions and determinations ....................................................................... 28
Telecommunications
31
Decisions and determinations ....................................................................... 31
Reports released ........................................................................................... 32
Fuel price monitoring
32
Aviation and airports
35
Decisions and determinations ....................................................................... 35
Rail access
36
Decisions and determinations ....................................................................... 36
Waterfront and shipping
37
ACCC 2011 – 12 Container Stevedoring Monitoring Report ........................ 37
Water
38
State Water price approval/determination pre-application consultation ........ 38
4. Increase our engagement with the broad range of groups affected by what we
do .............................................................................................................................. 39
Outcomes from International forUMS and conferences
39
International partnerships and collaboration ................................................. 39
International cooperation ............................................................................... 40
Consumer engagement
40
Consumer Consultative Committee .............................................................. 40
Consumer protection issues in Indigenous communities .............................. 40
Product safety awareness raising ................................................................. 41
Business engagement
41
Infrastructure Consultative Committee .......................................................... 41
Franchising Consultative Committee ............................................................ 41
Small Business Consultative Committee ...................................................... 41
Energy Marketing Forum ............................................................................... 41
Utility Regulators’ Forum ............................................................................... 42
Market research
42
5. Appendices .............................................................................................................. 43
Major speeches
43
Complaints and inquiries
44
ENFORCEMENT OUTCOMES & matters IN COURT
47
Litigation ........................................................................................................ 47
Undertakings accepted and Infringement Notices Paid ................................ 50
Infringement Notices ..................................................................................... 51
OVERVIEW
1.
Strong enforcement outcomes featured in the December 2012 quarter along with the
commencement of action to improve consumer welfare; protect competition and put a stop to
conduct which is anti-competitive or harmful to Australians. Highlights for the quarter include:

responding to over 55 000 complaints and inquiries from businesses and consumers

securing over $42 million in penalties for breaches of the Competition and Consumer
Act 2010 (Competition and Consumer Act)

commencing four new civil proceedings in the Federal Court

obtaining five court enforceable undertakings

receiving payment of $39,600 for 6 infringement notices under the Australian
Consumer Law

assessing 56 merger transaction and issuing 6 final authorisation determinations.

a total of 1 132 111 unsafe, faulty consumer goods being recalled as a result of the
ACCC’s negotiations.
2.
The ACCC continued to pursue remedies through the Federal Court against companies believed to
be in breach of the law. We instituted our latest civil cartel proceeding against Yazaki Corporation, a
Japanese company, and its Australian subsidiary, Australian Arrow Pty Ltd. The ACCC alleges that
these parties engaged in cartel conduct, market sharing and price fixing, in relation to the supply of
wire harnesses to Toyota Motor Corporation and its related entities in Australia. This action followed
civil proceedings earlier in the quarter, against Renegade Gas Pty Ltd (trading as Supagas NSW, a
privately owned company) and Speed-E-Gas (NSW) Pty Ltd (a wholly owned subsidiary of Origin
Energy Limited).The ACCC alleges that these companies gave effect to an anti-competitive cartel
arrangement which included not supplying liquid petroleum gas (LPG) cylinders for forklifts to each
others' customers. These customers were both small and large scale businesses. These actions sit
within a broader set of activities the ACCC has invested in with a view to preventing and terminating
cartel behaviour.
3.
Since 2006, the ACCC has been pursuing a number of airlines for alleged cartel conduct in the air
cargo industry. December 2012 saw the awarding of penalties against a number of the defendants
including Cathay Pacific Airways Ltd, Emirates, Singapore Airlines Cargo Pty Ltd and Thai Airways
International, taking the total penalties to date to $98.5 million. Proceedings continue against Air
New Zealand Ltd and PT Garuda Indonesia Ltd.
4.
The Federal Court imposed a $1 million penalty against Cotton On Kids and Cotton on Clothing
after it sold unsafe children’s nightdresses and pyjamas. The penalties imposed are the highest
imposed against a company for breaches of a mandatory product safety standard.
5.
The ACCC also achieved a number of significant penalties against various traders for breaches of
the fair trading and consumer protection provisions of the Competition and Consumer Act including;
UNJ Millenium and Pepe’s Ducks for false advertising; and single price provision breaches by Air
Asia Berhad. These judgments take to $23.78 million the total penalties awarded by the Federal
Courts under the Australian Consumer Law pecuniary penalty regime in 33 consumer protection
and fair trading proceedings that have been resolved as at 31 December 2012.
6.
At the end of the quarter, the ACCC had 30 cases before the Federal Court, with 9 cases awaiting
judgment. In addition to undertaking significant work assessing competition issues in the fuel and
supermarket industries; some of the significant traders that we commenced court action against
were:

eleven Harvey Norman franchisees for allegedly misrepresenting consumer rights
ACCCount 1 October to 31 December 2012
5

Hewlett-Packard in relation to a number of alleged misrepresentations about statutory
warranties and consumer guarantee rights

Dulux relating to claims about the temperature reducing capabilities of particular paint
products.
7.
In the December 2012 quarter the ACCC’s responded to 55 791 complaints and inquiries from
consumers and businesses. Scams accounted for 41 per cent of contacts made to the ACCC, with
‘advanced fee/up-front payment’ scams accounting for nearly 27.5 per cent of all scam complaints.
Of the complaints and inquiries entered into the ACCC’s database, 447 matters were flagged for
enforcement assessment.
8.
Building on the work of Consumer Affairs Victoria, the ACCC released a free ‘smart phone’ app for
consumers named ‘ACCC Shopper’ to coincide with the busy Christmas shopping period. The app
includes consumer information on warranties, refunds and lay-bys, and allows users to set
reminders for their gift vouchers and warranties, and stores photos of receipts. It also includes
information about country of origin food labelling and olive oil claims. The app was downloaded
more than 5000 times in the first week following its release.
9.
The aviation sector has featured prominently in our merger and authorisation assessments. On 20
December 2012 the ACCC issued a draft determination proposing to grant authorisation to an
alliance between Qantas Airways Limited and Emirates. The authorisation allows Qantas and
Emirates to coordinate certain aspects of their businesses which, in the absence of the
authorisation, may raise concerns under the Competition and Consumer Act.
10. The ACCC also plays a key role in protecting and ensuring efficient access to Australia’s monopoly
infrastructure. Since the deregulation of the wheat industry in 2012, the ACCC has been
responsible for ensuring exporters are able to access port terminals to ensure healthy competition
in this critical export market. Since accepting access undertakings from the port terminal operators,
the ACCC has been monitoring compliance with the undertakings and in November 2012 decided
not to object to long-term access agreements offered by GrainCorp to users of its bulk grain
facilities on the east coast of Australia.
11. The quarter was also marked with the release of a number of major regulatory reports, including the
AER’s sixth State of the Energy Market Report. The report noted that the main driver of higher retail
energy prices has been rising charges for using energy networks—that is, the poles and wires, and
gas pipelines that transport energy to customers. A number of factors have driven higher network
charges. Some factors—forecast growth in peak energy demand, the need to replace ageing
equipment, and higher financing costs due to conditions in global financial markets—were largely
unavoidable. But other cost pressures were difficult to justify.
12. The ACCC released its fourth Petrol Monitoring Report that examines the prices, costs and profits
of unleaded petrol in Australia. One of the key findings of the report identified that even with the
recent increases, petrol prices in Australia remain among the lowest in the OECD.
13. Healthy competition between businesses in Australian and global markets delivers innovation,
lower prices, greater efficiencies and more choice for customers as businesses try to win market
share and make profits. For competition to remain healthy, businesses need to operate within
boundaries of acceptable and fair behaviour towards their customers, competitors and suppliers.
Those boundaries are set out in the Competition and Consumer Act and the other Acts the ACCC
and the AER enforce. Our role is critical in making markets work for consumers now and in the
future.
ACCCount 1 October to 31 December 2012
6
1. MAINTAIN AND PROMOTE
COMPETITION AND
REMEDY MARKET FAILURE
ENFORCING THE ACT FOR BUSINESSES AND
CONSUMERS
Competition enforcement
1.1
In the December 2012 quarter, the ACCC was involved in eight proceedings relating to
competition matters in various industries. A number of proceedings are highlighted below while a
complete list is included in the appendix.
1.2
In this period, the ACCC also undertook significant work to consider competition issues in the
fuel and supermarket industries.
1.3
These actions and outcomes demonstrate the ACCC’s continued focus on maintaining and
promoting competition and remedying market failures.
Proceedings
Cartels
AUSTRALIA ARROW PTY LTD
The ACCC instituted proceedings in December 2012 in the Federal Court against
Yazaki Corporation and its wholly owned Australian subsidiary Australia Arrow
Pty Ltd for engaging in alleged cartel conduct, market sharing and price fixing, in
relation to the supply of wire harnesses to Toyota Motor Corporation and its
related entities in Australia. Wire harnesses are electrical systems that facilitate
the distribution of power and the sending of electrical signals to various
components of a motor vehicle. The ACCC is seeking pecuniary penalties,
declarations, injunctions and costs.
Cartels
AIR CARGO – VARIOUS AIRLINES
Cathay Pacific Airways Ltd, Emirates, Singapore Airlines Cargo Pte Ltd and Thai
Airways International were ordered to pay $11.25 million, $10 million, $11.75
million and 7.5 million respectively for price fixing of surcharges on international
freight carriage. This brings the total penalties to $98.5 million imposed on cartel
participants since the ACCC’s investigation into alleged cartel activity in air cargo
services began in 2006. Proceedings continue against Air New Zealand Ltd and
PT Garuda Indonesia Ltd.
ACCCount 1 October to 31 December 2012
7
Cartels
RENEGADE GAS PTY LTD (TRADING AS SUPAGAS NSW) AND SPEED-EGAS (NSW) PTY LTD
In August 2010 the ACCC instituted proceedings in the Federal Court in Sydney
against Renegade Gas Pty Ltd (trading as Supagas NSW) and Speed-E- Gas
(NSW) Pty Ltd. The ACCC alleges that these companies, through their senior
executives and sales staff, gave effect to an anti-competitive cartel arrangement
which included not supplying liquid petroleum gas (LPG) cylinders for forklifts to
each others’ customers. Proceedings continued in the quarter.
COURT-ENFORCEABLE UNDERTAKINGS
1.4
On 30 October 2012 the ACCC received a court-enforceable undertaking from Chemical
Formulators Pty Ltd (Chemform) after admitting that it was likely to have engaged in resale price
maintenance in relation to the supply of commercial cleaning products in Australia. Chemform
undertook to not engage in resale price maintenance in the future, revise its distributor
agreement to ensure it does not contain a clause preventing distributors from discounting the
price of Chemform products, send a copy of the revised distributor agreement to distributors and
advise them that they are free to set the minimum price at which they sell the products, and
implement a Competition and Consumer Law Compliance Program.
1.5
On 18 December 2012 the ACCC accepted a court-enforceable undertaking from hearing aid
wholesaler and retailer, Oticon Australia Pty Ltd, which acknowledged that it engaged in resale
price maintenance in the supply of hearing aids to retailers in Australia. Oticon undertook to
refrain from engaging in the conduct in the future and maintain and continue to implement a
compliance program.
Continuing investigations
1.6
During the December quarter, the ACCC also undertook significant activity in projects involving
fuel, supermarkets and competition issues in the online retail sector.
CONCENTRATED SECTORS
1.7
In its Compliance and Enforcement Policy, the ACCC identified that it will prioritise its
competition and consumer work in concentrated sectors including fuel and supermarkets sectors.
In accordance with this, it continues to progress a number of matters in these sectors including
those noted below.
INFORMATION SHARING – FUEL COMPANIES
1.8
On 3 May 2012 the ACCC announced it had commenced an investigation into price information
sharing arrangements in relation to the retail petrol sector because of concerns that such
arrangements may be in breach of the Act.
1.9
The petrol price 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.
SHOPPER DOCKETS
1.10
The ACCC is considering the competition implications of the trend of larger and longer fuel
shopper docket offers. The ACCC is working with industry participants to form a considered view.
SUPERMARKETS
1.11
In early 2012 following concerns voiced publicly about the conduct of major supermarket chains,
the ACCC sought information from supermarket suppliers regarding the way in which they were
treated by supermarkets. A range of concerns were voiced and the ACCC sought information
from the supermarkets regarding some of that conduct. Broadly speaking, suppliers have
complained that they are being treated unconscionably by major supermarket chains as well as
allegations that the supermarkets are misusing their market power. The ACCC will look closely at
these allegations, and expects that considerable work will be required before deciding whether
any action ought to be taken.
ACCCount 1 October to 31 December 2012
8
ONLINE COMPETITION
1.12
The ACCC is continuing to monitor online trading activities and is considering matters that affect
competitive behaviour in the online trading environment. Activities by online traders that may be
considered as anti-competitive include the misuse of market power, exclusive dealing distribution
arrangements and controlling prices.
MAINTAINING COMPETITION IN CONCENTRATED
SECTORS
Mergers
1.13
In the December 2012 quarter, there were 56 matters considered by the ACCC (39 matters were
pre-assessed as not requiring review and 17 matters were reviewed on confidential public basis).
1.14
Of the 15 matters reviewed publicly, 4 were opposed outright; 9 were cleared unconditionally and
1 matter cleared subject to an undertaking. During this period the ACCC also accepted
1 variation to an undertaking (Pfizer).
1.15
The ACCC expressed concerns in 1 confidential review of a merger proposal. There were
18 Foreign Investment Review Board (FIRB) requests assessed in the quarter.
Table 1: Matters assessed and reviews undertaken – 1 October to 31 December 2012
Confidential Public Total
Pre-assessed 1 October – 31 December 2012
39
Total reviews undertaken 1 October – 31 December 2012 2
0
39
15
17
Total reviews can be broken down into the following categories:
Not opposed
0
9
9
Finished—no decision (including withdrawn)
1
0
1
Opposed outright
0
4
4
Confidential review—ACCC concerns expressed
1
0
1
Resolved through undertakings
0
1
1
Variation to undertaking accepted
0
1
1
Variation to undertaking rejected
0
0
0
Total matters assessed and reviews undertaken
41
15
56
Note: Only public matters can be resolved with undertakings
ACCCount 1 October to 31 December 2012
9
SIGNIFICANT MERGER DECISIONS THIS QUARTER
1.16
1.17
The ACCC opposed four proposed mergers reviewed publicly:

Woolworths Limited and Lowe’s Companies Inc (Joint Venture) proposed acquisition
of G Gay & Co hardware stores

Seven Group Holdings Limited proposed acquisition of Consolidated Media Holdings
Limited

Sonic Healthcare Limited proposed acquisition of pathology businesses of
Healthscope Limited in Queensland and Western Australia

carsales.com Limited proposed acquisition of interests associated with the Trading
Post brand
The public review of Nestle’s proposed acquisition of Pfizer Nutrition from Pfizer Inc was
resolved through undertakings.
NESTLE / PFIZER
Merger
On 24 May 2012 the ACCC commenced a review of Nestlé’s proposed
acquisition of the global infant nutrition business of Pfizer Nutrition.
Globally, this acquisition included Pfizer Nutrition’s baby formula business and
prenatal and maternal vitamin products. In Australia, the areas of overlap
between Nestlé and Pfizer Nutrition were in the wholesale supply of infant
formula and follow-on-milks, which are a substitute for human breast milk for
young children aged 0 to 12 months and growing-up milks, which are nutritional
milks for children aged 1 to 5 years.
The ACCC undertook extensive consultation on the proposed acquisition with a
strong focus on the extent to which the removal of Pfizer Nutrition, one of
Nestlé’s closest competitors in the supply of infant formula and toddler milk,
would reduce competition relative to the present market structure.
On 31 August 2012 the ACCC issued a Statement of Issues outlining the ACCC’s
preliminary competition concerns as well the broad principles of a proposed
remedy offered by Nestlé to address these concerns.
Following further market consultation on the terms of the proposed remedy and
discussions with Nestlé and Pfizer Nutrition, the ACCC accepted a courtenforceable undertaking from Nestlé aimed at ensuring that the current level of
competition in the relevant markets will be maintained through the creation of a
strong third major supplier of infant formula and toddler milk in Australia. It
requires Nestlé to sell an exclusive ten year licence for Pfizer Nutrition’s infant
nutrition S-26/SMA brand portfolio in Australia to a purchaser to be approved by
the ACCC, followed by a further ten year ‘black out’ period in which Nestlé will
not be permitted to re-enter the markets with Pfizer Nutrition’s brands.
On 22 November 2012 the ACCC accepted the undertaking and announced it
would not oppose the proposed acquisition.
Statement of Issues
1.18
The ACCC will publicly release a Statement of Issues outlining the basis and facts where the
ACCC has come to a preliminary view that a merger raises competition concerns that require
further investigation. The purpose of releasing a Statement of Issues is to increase transparency
and allows for the ACCC to obtain further information that may either alleviate or reinforce the
concerns of the ACCC and in some cases provides an opportunity for merger parties to consider
putting forward undertakings to resolve competition concerns.
1.19
In this quarter the ACCC publicly released a Statement of Issues on the following matters:

Carsales.com Ltd proposed acquisition of assets associated with Trading Post issued on 19 October 2012
ACCCount 1 October to 31 December 2012
10

Woolworths Limited - proposed acquisition of the Hawker Supa IGA - issued on
6 December 2012

Telstra Corporation Limited proposed acquisition of Adam Internet Pty Ltd - issued on
20 December 2012
Concentrated
markets
FOCUS ON ACQUISITIONS IN CONCENTRATED MARKETS
In June 2012 ACCC Chairman Rod Sims announced that the ACCC would be
focusing on incremental small retail acquisitions by the major supermarket chains
(MSCs) in light of concerns about the continued expansion of Woolworths and
Coles in various sectors. The ACCC was also aware of concerns about the time
that can be taken to review these acquisitions. The ACCC considered the best
way forward was for the ACCC and the MSCs to agree a voluntary streamlined
notification and review protocol which would provide benefits for both the ACCC
and MSCs. The ACCC sought agreement from Wesfarmers and Woolworths
regarding the types of acquisitions that should be notified and the information that
would be provided. In return, the ACCC proposed to expedite pre-assessments
and truncate timelines for the first stages of a merger review.
On 7 December 2012 the ACCC announced agreement with Coles of a
streamlined assessment protocol for single supermarket acquisitions, including in
relation to new supermarket developments, for an initial six month trial period.
Agreement was not reached, however, to include acquisitions by Coles or
Bunnings in the liquor or hardware sectors in the protocol. The ACCC was
disappointed that no agreement on the protocol was reached in any of the
sectors with Woolworths.
The ACCC will continue to pay close attention to all acquisitions in the
supermarket, liquor, hardware and fuel sectors by the major supermarket chains,
including new greenfield store developments. The ACCC will do this not only
through notification by the MSCs and its own monitoring activities but,
importantly, through information received from the market. Indeed, information
received from the public will be important, including particularly in relation to
greenfield developments.
REMEDY MARKET FAILURE
Authorisations and notifications
1.20
In circumstances where competitive markets do not work to deliver the most efficient outcomes it
may be in the public interest to allow certain restrictions on competition. This is particularly where
there are features in a market that may lead to market failure – where the market left to itself
does not achieve the most optimal outcomes. In many ways the authorisation and notification
provisions of the Act allow the ACCC to consider the benefits from allowing conduct that
addresses a market failure but which nonetheless restricts competition.
Authorisations
1.21
Broadly, 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, including from a lessening of competition.
1.22
In assessing the likely public benefits and detriments of an authorisation application, the ACCC
undertakes a transparent public consultation process, placing submissions on a public register,
subject to any claims of confidentiality. After considering submissions, the ACCC will issue a
draft decision and provide an opportunity for interested parties to request a conference to
discuss the draft decision. The ACCC will then reconsider the application in light of any further
submissions and release its final decision.
ACCCount 1 October to 31 December 2012
11
Table 2: Authorisations received and decisions issued–October to December 2012
Total authorisations received 1 October – 31 December 2012 10 (16)*
New
9 (15)
Revocation and substitution
0 (0)
Minor variations
1(1)
Decisions issued 1 October – 31 December 2012
20 (44)
Draft determinations
10 (22)
Final determinations
6 (15)
Interim decisions
4 (7)
* no. proposals (no. applications)
SIGNIFICANT AUTHORISATIONS
1.23
Significant authorisations decided during the December 2012 quarter included:

Medicines Australia Limited - Revocation and Substitution - A91316 - A91320
-

On 4 July 2012 Medicines Australia Limited applied for
reauthorisation (application for revocation and substitution) for its
Code of Conduct Edition 17. The Code of Conduct sets standards
for the advertising and promotion of pharmaceutical products. On
20 December 2012 the ACCC issued a determination granting
reauthorisation for a period of two years.
Australian Bankers' Association Inc. - Authorisation - A91312
-
The Australian Bankers' Association on behalf of its members,
proposes to implement an agreement which would provide
customers within identified remote Indigenous communities with
access to fee-free ATM transactions. On 8 November 2012 the
ACCC issued a determination granting authorisation for a period of
five years.
ACCCount 1 October to 31 December 2012
12
Vulnerable and
disadvantaged
consumers
ATM FEES IN SELECTED VERY REMOTE INDIGENOUS COMMUNITIES
On 29 May 2012 the Australian Bankers’ Association (ABA) applied to the ACCC
for authorisation of its project to reduce total ATM fees charged in very remote
Indigenous communities.
The ACCC considered that there was likely to be significant public benefit from
the provision of fee-free ATM withdrawals and balance inquiries from the
selected ATMs. The ACCC considered that this likely public benefit would
outweigh the likely minimal public detriment, particularly given the limited scope
and length of time of the project.
On 8 November 2011 the ACCC granted authorisation of the project for a period
of five years, until 1 December 2017.
Under the ABA’s project, participating financial institutions will offer fee-free
withdrawals and balance inquiries to their customers at selected existing ATMs in
very remote Indigenous communities. In order to achieve this, participating
banking providers will subsidise the costs of participating ATM deployers in
providing these transactions at selected ATMs.
The total number of ATMs included in the project can extend to a cap of 85
ATMs, although more than 85 ATMs may be included in the project if further
external funding is provided from government or other sources. The communities
to benefit from the ABA project are located across the Northern Territory,
Queensland, South Australia and Western Australia.
The ABA coordinated this project in response to a report by the ATM Taskforce,
released on 25 May 2012. The ATM Taskforce was appointed by the Federal
Government in 2010 for the purposes of reviewing high ATM fees being incurred
in remote Indigenous communities.
Authorisation by the ACCC means that people in these very remote Indigenous
communities now have lower costs for use of ATMs.
DRAFT DETERMINATIONS
1.24
Significant authorisations for which a draft determination was issued during the December 2012
quarter (and no final determination) included:


Qantas Airways Limited & Jetstar Airways Pty Ltd - Authorisation - A91314 & A91315
-
On 14 December 2012 the ACCC issued a draft decision which
proposes to grant authorisation to Qantas Airways Limited and
Jetstar Airways Pty Ltd, for a period of five years, for coordination
involving four Asian based Jetstar branded joint ventures: Jetstar
Asia, Jetstar Pacific, Jetstar Japan and Jetstar Hong Kong.
-
The proposed authorisation facilitates the Jetstar joint ventures
coordinating with each other on passenger and cargo services,
predominately on intra-Asian routes. It also allows their airline
owners to support and expand each joint venture and to relate the
joint ventures to their own businesses.
-
A final determination is expected in the first quarter 2013.
Qantas Airways Limited & Emirates - Authorisations - A91332 & A91333
-
On 20 December 2012 the ACCC issued a draft determination
proposing to grant authorisation, subject to a condition, for five
years for an alliance between Qantas Airways Limited and
Emirates. Under the alliance, the two airlines will cooperate on
passenger and freight operations across their networks.
-
The ACCC is of the view that the main benefit arising from the
alliance is an improved product and service offering by the two
airlines to their customers. This includes increased customer
ACCCount 1 October to 31 December 2012
13
access to each others’ flights, destinations and frequent flyer
programs.


-
The alliance is likely to result in some public detriments through its
effect on competition where Qantas and Emirates currently offer
overlapping services. In most of these regions, there are factors
which are likely to mitigate the public detriment, including continuing
competition from a number of established airlines.
-
However, on the overlapping routes between Australia and New
Zealand, the ACCC is concerned that the alliance may have an
increased ability and incentive to reduce or limit growth in its
capacity in order to raise airfares. Therefore, the ACCC is
proposing a condition to restrict the ability of the alliance in this
regard.
-
On 20 December 2012, the applicants applied for interim
authorisation to commence the proposed conduct as soon as
possible. The ACCC granted interim authorisation on 17 January
2013, on the condition that the conduct for which authorisation is
sought is not engaged in for services between Australia and New
Zealand.
-
A final determination is expected to be issued by the end of March
2013.
Australian Medical Association Limited - Authorisation - A91334
-
On 12 December 2012 the ACCC issued a draft determination
proposing to allow GPs in single practices to set practice prices and
collectively bargain. Practices will need to meet particular business
criteria in order to be considered as a single practice.
-
The ACCC proposes to allow GPs within single practices to
collectively set prices and bargain over visiting medical officer
services and with Medicare Locals.
-
The ACCC proposes to grant authorisation for five years, as sought
by the AMA. Authorisation will extend to all GPs, not just AMA
members.
-
The authorised arrangements are similar to the authorisations
previously granted to Royal Australian College of General
Practitioners members which lapsed in mid 2011.
Australian Tyre Industry Council - Authorisation - A91336 & A91337
-
The ACCC issued a draft decision proposing to authorise a national
Tyre Stewardship Scheme for five years. The aim of the Scheme is
to reduce the amount of used tyres entering landfill, being illegally
dumped or exported overseas.
-
The Scheme has the potential to play an important role in reducing
the volume of used tyres entering the domestic waste stream or
being exported overseas and burned for fuel in an environmentally
unsustainable way. This will reduce the environmental and health
and safety hazards associated with such disposal methods.
-
Broadly, all participants in the Scheme must contribute to the
environmentally sound use of end of life tyres, elimination of the
inappropriate export of end of life tyres from Australia, elimination of
the illegal dumping of end of life tyres and elimination of the
disposal of end of life tyres to landfill. It also involves a levy of
$0.25 per passenger car tyre equivalent being imposed on tyre
importers to fund the operation of the Scheme. Among other things,
levy funds will be used by the Scheme’s administrator to fund
research and development activities for tyre-derived products.
-
In issuing the draft decision the ACCC was satisfied that the
voluntary nature of the Scheme the small cost of the industry levy
means there is likely to be little, if any, public detriment generated
by the Scheme
ACCCount 1 October to 31 December 2012
14
Notifications
1.25
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
1.26
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.
1.27
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.
1.28
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
1.29
Exclusive Dealing Notifications
Oct – Dec 2012
no. proposals (no. notifications)
Matters lodged in the quarter
124 (334)
Matters requiring a draft notice
0 (0)
Matters allowed to stand
131 (341)
Matters revoked
0 (0)
Matters withdrawn
1 (1)
Significant notifications that have required consultation in the period (including both new
notifications as well as notifications allowed to stand during the period) were:

The Hospitals Contribution Fund of Australia Limited - Notification - N95945
-

The Hospitals Contribution Fund of Australia Limited (HCF)
proposes to allow physiotherapists to participate in its "More for
Muscles program" on condition that participating physiotherapists
acquire electronic point of sale payment systems from the Health
Industry Claims and Payment Service, or other providers nominated
by HCF.
Peter McInnes Pty Ltd - Notification - N95877
-
Peter McInnes Pty Ltd (Peter McInnes) appoints various distributors
for KitchenAid products and other kitchen products and appliances.
Peter McInnes proposes to supply distributors on condition that the
distributor will not sell the product beyond a particular territory.
Peter McInnes also proposes to supply some nominated distributors
on condition that they do not sell particular products, such as
KitchenAid products, via the internet. Peter McInnes withdrew the
application on 16 November 2012 and the ACCC accordingly
ACCCount 1 October to 31 December 2012
15
discontinued its assessment of the notification and has closed the
matter.

First Class Taxis Pty Ltd - Notification - N95824
-

Port Hedland Port Authority - Notification - N96171
-

The Port Hedland Port Authority proposes that all vessels entering
and leaving the port (other than very small and manoeuvrable craft)
must engage the harbour towage services of BHP Billiton Minerals
Pty Ltd.
Queensland Rugby Football League Limited - Notification - N95172
-

First Class Taxis Pty Ltd proposes to lease its taxis to taxi drivers
on condition that the taxi driver only acquires Electronic Funds
Transfer at Point of Sale (EFTPOS) facilities from a supplier
approved by First Class Taxis Pty Ltd.
The Port Hedland Port Authority proposes that all vessels entering
and leaving the port (other than very small and manoeuvrable craft)
must engage the harbour towage services of BHP Billiton Minerals
Pty Ltd.
Qube Logistics (Aust) Pty Limited - Notification - N96205
-
Qube Logistics (Aust) Pty Ltd (Qube) manages the storage,
maintenance and handling of container park facilities across
Australia. To manage container movements to and from Qube's
container parks, Qube will require container transport operators to
use a booking system administered by Containerchain Pty Ltd
(Containerchain).
COLLECTIVE BARGAINING NOTIFICATIONS
1.30
Groups of small businesses can lodge a collective bargaining notification, to obtain protection
from legal action for the collective bargaining activity. The protection provided by a collective
bargaining notification comes into force automatically 14 days after the notification is validly
lodged unless the ACCC objects to the notification, and continues for three years. Notifications
can be reviewed at any time.
1.31
Businesses seeking to lodge a valid collective bargaining notification must satisfy a number of
requirements—for example each member of the collective bargaining group must reasonably
expect that they will make at least one contract with the target and that the value of each
member’s transactions with the target will not exceed $3 million per year (this figure differs for
certain industries). These requirements do not apply to the authorisation process.
Table 4: Collective bargaining notification projects
Collective Bargaining Notifications
Oct – Dec 2012
no. proposals (no. notifications)
Matters lodged in the quarter
1 (1)
(# of notifications)
Matters allowed to stand
3 (56)
(# of notifications)
Matters withdrawn/later deemed invalid (# of
notifications)
0 (0)
Matters revoked (# of notifications)
0 (0)
Matters under consideration at end of quarter
0 (0)
ACCCount 1 October to 31 December 2012
16
CERTIFICATION TRADE MARKS
1.32
Under the Trade Marks Act 1995, the ACCC has responsibilities in relation to the approval of
Certification Trade Marks. A Certification Trade Mark (CTM) certifies that a good or service is of
a particular standard; for example, with regard to quality, origin, material or mode of
manufacture. The ACCC’s role involves assessing and approving rules for the use of CTMs,
including:

assessing the requirements that goods / services / persons must meet in order to be
eligible to have a Certification Trade Mark applied to them, and assessing the
proposed process by which compliance with certification requirements will be judged;

examining the rules to ensure they are not in themselves anti-competitive or
misleading or deceptive.
Certification trade
mark
‘FREE RANGE’ EGG CERTIFICATION TRADE MARK APPLICATION
On 2 November 2012 the ACCC issued an initial assessment of a certification
trade mark application by the Australian Egg Corporation Limited (AECL)
proposing not to approve the certification trade mark (CTM). The ACCC was
concerned that the proposed CTM may mislead consumers about the nature of
eggs described as ‘free range’. Additionally the ACCC considered that the
proposed CTM did not meet all of the legislative requirements of the Trade Marks
Act.
On 21 December 2012 the AECL announced it had decided to withdraw its CTM
application. The AECL indicated it intends to submit a new CTM application after
thoroughly reviewing the issues raised and making any necessary amendments
to the minimum standards.
The certification scheme was intended to be a national egg quality assurance
program that covered on-farm practices relating to the rearing of pullets, grading
facilities and the production of eggs. The scheme covered food safety,
biosecurity and animal welfare.
To inform its assessment of the application the ACCC commenced public
consultation on the AECL’s proposed CTM Rules in May 2012. The ACCC
received over 1700 submissions with all but seven opposing the application. The
majority of submissions were from individual consumers but submissions were
also received from egg producers, industry associations, consumer and animal
welfare organisations and members of parliament.
While the CTM covered a wide range of practices relevant to egg production, the
primary focus of submissions was standards for free range egg production. In
particular, submissions raised concerns with the permitted maximum outdoor
stocking densities (the proposed free range egg standard permitted 20 000 birds
per hectare), the proportion of birds accessing the range and beak trimming. In
addition to receiving written submissions, the ACCC had discussions with a
number of organisations including the AECL, Humane Choice and Humane
Society International, RSPCA, Choice, Animal Health Australia, Standards
Australia, the Department of Agriculture, Forestry and Fisheries and the Victorian
Department of Primary Industries about the application.
To inform the assessment process, ACCC officers also visited three free range
egg production facilities covering a variety of stocking densities and differing
production practices. In its published initial assessment the ACCC concluded that
it was concerned that the AECL proposed standards governing free range egg
production were inconsistent with consumer expectations and understanding of
free range egg production. The ACCC was concerned that the use of the CTM in
such circumstances had the potential to mislead or deceive consumers. The
ACCC has ceased further consideration of this application following the AECL’s
withdrawal of the application.
ACCCount 1 October to 31 December 2012
17
2. PROTECT THE INTERESTS
AND SAFETY OF
CONSUMERS AND SUPPORT
FAIR TRADING IN MARKETS
CONSUMER PROTECTION OUTCOMES
Action to protect consumers
2.1
In the December 2012 quarter, the ACCC was involved in 26 proceedings relating to consumer
protection.
2.2
In the period, the ACCC continued to undertake significant work relating to carbon price
representations, consumer protection issues in indigenous communities, consumer guarantees,
unsolicited selling, scams, and food labelling.
2.3
These actions and outcomes demonstrate the ACCC’s continuing efforts to protect the interests
and safety of consumers and its support for fair trading in markets.
Proceedings
2.4
The following matters were commenced in the December quarter:
Consumer
Guarantees
HARVEY NORMAN FRANCHISEES
Proceedings were instituted in the Federal Court Sydney against 11 Harvey
Norman franchisees in relation to allegedly misrepresenting consumer rights. The
ACCC alleges that the franchisees engaged in misleading or deceptive conduct
by making false or misleading representations to consumers about their rights
under the consumer guarantee provisions of the ACL. The ACCC is seeking
penalties, declarations, injunctions and costs.
ACCCount 1 October to 31 December 2012
18
Consumer
Guarantees
HEWLETT-PACKARD
Proceedings were instituted in the Federal Court Sydney against HewlettPackard Australia Pty Ltd for alleged misleading or deceptive conduct in relation
to consumer rights. The ACCC alleges that HP made false or misleading
representations to consumers in relation to consumers’ statutory warranty and
consumer guarantee rights; and made false or misleading representations to
retailers that HP was not liable to indemnify them if they provided consumers with
a refund or replacement without HP’s prior authorisation. The ACCC is seeking
declarations, injunctions, civil pecuniary penalties, disclosure orders, adverse
publicity orders, non-party consumer redress, implementation of a compliance
program and costs.
2.5
Together with the proceedings against the Harvey Norman franchisees identified above, the
proceedings demonstrate the importance the ACCC places on the new consumer guarantee
provisions and that consumers are not misled as to their rights.
Credence claims
premium
DULUXGROUP
Proceedings were instituted in the Federal Court Western Australia against
DuluxGroup (Australia) Pty Ltd for alleged false, misleading or deceptive
representations in relation to the promotion of the temperature reducing
capabilities of its InfraCOOL and Weathershield Heat Reflect paints. The ACCC
is seeking declarations, injunctions, corrective notices, non-party consumer
redress, penalties and costs.
2.6
The following matters were finalised during the December 2012 quarter.
Online Trading
AIR ASIA BERHAD
Air Asia Berhad was ordered to pay penalties of $200 000 for contravening the
single pricing provisions of the ACL. Other relief included a declaration and a
court undertaking restraining Air Asia for a period of three years.
Labelling of
childrens clothing
COTTON ON KIDS
THE FEDERAL COURT IMPOSED PENALTIES BY CONSENT TOTALLING
$1 MILLION AGAINST COTTON ON KIDS PTY LTD IN RELATION TO ITS
SUPPLY OF UNSAFE CHILDREN’S NIGHTDRESSES AND PYJAMAS. THE
NIGHTWEAR SUPPLIED BETWEEN SEPTEMBER AND DECEMBER 2010,
DID NOT COMPLY WITH THE MANDATORY PRODUCT SAFETY
STANDARD FOR CHILDREN’S NIGHTWEAR AND HAD ATTACHED A
MISLEADING ‘LOW FIRE DANGER’ LABEL. OTHER ORDERS INCLUDED
DECLARATIONS, INJUNCTIONS, IMPLEMENTATION OF A TRADE
PRACTICES COMPLIANCE PROGRAM AND CONTRIBUTION TOWARDS
COSTS.
ACCCount 1 October to 31 December 2012
19
Credence claims
UNJ MILLENIUM
The Federal Court ordered Gold Coast retailer UNJ Millenium Pty Ltd to pay a
pecuniary penalty of $55 000 after it admitted it made false or misleading claims
that sheepskin and wool bedding products were made in Australia, contained
100% sheep wool or contained 100% alpaca wool, when it was not the case.
Other outcomes included declarations, injunction, establishment of a trade
practices compliance program and costs.
Credence claim
premium
PEPE’S DUCKS
Pepe’s Ducks Pty Ltd was ordered to pay $375 000 in pecuniary penalties after
engaging in false, misleading or deceptive conduct in relation to the promotion
and supply of its duck meat products. Pepe’s Ducks used the phrase ‘open
range’ from 2004 to 2012 and the phrase ‘grown nature’s way’ from 2007 to
2012 on its product packaging, website, delivery vehicles, signage, stationery
and/or merchandise, often in conjunction with a pictorial representation of a
duck in the outdoors walking on grass against a background of a lake with hills
behind. Other orders included declarations, injunctions, implement a compliance
program, issue corrective notices and costs.
2.7
These last two proceedings highlight the importance the ACCC places on ensuring that
consumers are able to trust that what is on a label is true and accurate and they are not misled
into paying a premium for products that don’t match the claims on the label.
2.8
These cases take to $23.78 million the total penalties awarded by the Federal Courts under the
ACL pecuniary penalty regime in 33 consumer protection and fair trading proceedings that have
been resolved as at 31 December 2012.
Court-enforceable undertakings
2.9
The ACCC often resolves contraventions of the Act by accepting court-enforceable undertakings
under s. 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.
ACCCount 1 October to 31 December 2012
20
Credence claims
premium
ALICE SUNDOWN ABORIGINAL ART
On 6 December 2012 the ACCC received a court-enforceable undertaking from
Angela Jane Delgiacco of Alice Sundown Aboriginal Art after making false or
misleading representations in a certificate of authenticity for an Indigenous
artwork sold on eBay under the username ‘sundownnt01’. Angela Jane
Delgiacco undertook for a period of three years, to not produce a Certificate of
Authenticity for artwork which contains false or misleading information.
Misleading
advertising in
motor vechile
advertising
NISSAN MOTOR COMPANY
Bait advertising
CNT CORP PTY LTD
On 28 November 2012 the ACCC received a court-enforceable undertaking
from Nissan Motor Co (Australia) Pty Ltd and issued three infringement notices
totalling $19 800 in relation to misleading representations for the Nissan Dualis
vehicle. Nissan undertook to not engage in similar conduct in the future, publish
a corrective notice, and appoint an independent compliance professional to
undertake a review of their procedures for their advertising and promotional
strategies.
On 15 October 2012 the ACCC received a court-enforceable undertaking from
CNT Corp Pty Ltd and issued three infringement notices totalling $19 800 after it
offered and charged for wholesale ‘fibre to the premises’ (FTTP) broadband
internet services at data transfer rates that its network could not support. CNT
Corp undertook to provide affected consumers with credit vouchers redeemable
for broadband services, acquire additional backhaul transmission capacity for its
Eden Brook network, refrain from engaging in similar conduct in the future and
implement a trade practices compliance program.
INFRINGEMENT NOTICES
2.10
2.11
In respect of the Infringement Notices noted above, the ACCC received payment from:

CNT Corp Pty Ltd of three infringement notices totalling $19 800

Nissan Motor Co (Australia) Pty Ltd payment of three infringement notices totalling
$19 800.
This takes the total infringement penalties paid up to December 2012 to over $620 000 under the
Australian Consumer Law.
Other significant activities
Carbon price representations
2.12
The ACCC continues to give priority to carbon pricing issues as directed by the Treasurer
pursuant to section 29(1) of the Act. This includes:

giving priority to the investigation of businesses who engage in practices concerning
the impact of a carbon price

encouraging compliance with the Act by informing and educating businesses about
their responsibilities under the ACL concerning any statements about impacts of a
carbon price on the supply of goods and services in trade and commerce

raising awareness amongst consumers about their rights under the ACL and informing
them that businesses are prohibited from engaging in misleading and deceptive
conduct or making false or misleading representations about the impact of a carbon
price on the supply of goods and services in trade or commerce.
ACCCount 1 October to 31 December 2012
21
2.13
In the December 2012 quarter the ACCC received over 340 carbon pricing complaints and
inquiries. This forms part of over 2800 complaints and inquiries received since the
implementation of the carbon price mechanism on 1 July 2012. Complaint numbers continue to
decline since the implementation of the carbon price mechanism.
2.14
Energy is the largest complaint category, constituting 41% of all contacts received since 1 July
2012. A significant number of contacts have also been received about the refrigerant gas, landfill
and construction sectors.
2.15
The ACCC continues to actively assess carbon pricing complaints as they arise for evidence of
conduct that may raise concerns under the Act and a number of in-depth and initial investigations
remain ongoing. Enforcement outcomes for the period include five administrative resolutions and
five formal warning letters.
2.16
On the stakeholder front, the ACCC continues to engage with businesses on carbon pricing
issues as required, including through sending 25 educative letters and 16 informal warning
letters to traders in the period.
Consumer guarantees
2.17
Building on the work of Consumer Affairs Victoria, the ACCC released a free iPhone and Android
app for consumers named ‘ACCC Shopper’ in early December 2012 to coincide with the busy
Christmas shopping period. The app includes consumer information on warranties, refunds and
lay-bys, and allows users to set reminders for their gift vouchers and warranties, and stores
photos of receipts. It also includes information about country of origin food labelling and olive oil
claims. The app was downloaded more than 5000 times in the first week following its release.
Unsolicited selling
2.18
This quarter the ACCC continued to focus on door-to-door sales practices, particularly in relation
to the energy market. In November, the ACCC as part of its ‘Knock! Knock! Who’s There?’
campaign, launched translated versions of its consumer brochure to assist potentially
disadvantaged and vulnerable consumers from non-English speaking backgrounds to
understand their rights. The brochure is available in the following 14 languages: Arabic, Dari,
Turkish, Farsi, Dinka, Mandarin, Vietnamese, Cantonese, Greek, Serbian, Korean, Italian, Thai
and Khmer.
2.19
The ACCC continued to distribute its suite of other door-to-door educational material to the public
via stakeholders and its Infocentre. To date approximately 70 000 ‘Do Not Knock’ stickers and
16 500 brochures have been distributed.
Fuel price boards
2.20
2.21
Following an agreement reached on 6 July 2012 to work towards a consistent national
framework on fuel price board signage Ministers responsible for Consumer Affairs released a
public consultation paper on a proposed national petrol information standard on 7 December
2012. The aim of the consultation paper is to stimulate discussion on fuel price transparency with
a view to increasing competition and enabling consumers to accurately compare fuel prices at
different retailers. The public consultation paper proposes three options:
a)
No new regulation. Generic consumer protections against false, misleading and
deceptive conduct, bait advertising and multiple pricing.
b)
Basic national standard. Only undiscounted fuel prices on signs permitted,
although fuel discount schemes may be included.
c)
Detailed national standard. All fuel retailers must maintain a fuel price board,
displaying in equal prominence the undiscounted prices of a specified minimum
number of fuels.
During the consultation period, a working group of Commonwealth, state and territory officials will
meet with key stakeholders, including industry groups, motoring associations and consumer
groups. The consultation period closes on 15 February 2013. The consultation will take into
account matters such as remoteness and other location-specific issues.
ACCCount 1 October to 31 December 2012
22
Scams
2.22
During the quarter, the ACCC continued to work with other agencies, and implemented
educational initiatives to protect Australians against scam activity. On 22 November 2012 the
ACCC hosted a meeting of the Australasian Consumer Fraud Taskforce, which is a
governmental working group consisting of 23 agencies working to disrupt scam activity.
2.23
The ACCC’s SCAMwatch website (www.scamwatch.gov.au) continued to provide regular alerts
for subscribers.
2.24
SCAMwatch includes a free subscription service to alert the public to new scams. Seven
SCAMwatch radars were issued in the quarter covering:
2.25

‘Computer cold call virus scam – scammers outsmarted!’ – in October 2012 the
ACCC announced that three international regulators successfully closed down
and froze the funds of imposters posing as Microsoft employees offering to fix PC
viruses.

‘With Halloween around the corner, beware of scareware’ – in October 2012 the
ACCC advised consumers of the emergence of a new type of scareware where
scammers gain control of one’s computer and would seek a ransom in order for
the computer to be released.

‘Scammers continue to impersonate government officials’ – in October 2012 the
ACCC urged the public to remain vigilant against scammers impersonating
government officials with false claims of money owed.

‘Don’t be horsed around by scammers this spring racing season’ – tying in with
the Melbourne Cup, in November 2012 the ACCC warned punters to beware of
sports investment scams.

‘Watch out for scam surveys and offers misusing household names’ – in
November 2012 the ACCC alerted consumers to fake online gift vouchers and
other bogus inducements seeking consumers’ valuable personal information.

‘Watch out for fake flight itineraries landing in your inbox’ – in December 2012 the
ACCC warned travellers about scam emails with fake flight itineraries attached
containing malicious software.

‘Dont be fooled by scams this festive season’ – in December 2012 the ACCC
warned consumers about scams to look out for over Christmas including online
shopping scams, fake delivery scams and charity scams.
SCAMwatch is also on Twitter. During the quarter December 2012 SCAMwatch attracted
235 362 unique visits and to date has issued 97 tweets, and almost 4 167 followers.
Food labelling
2.26
The ACCC together with the state and territory consumer protection agencies (ACL Regulators)
have been considering a range of consumer protection concerns regarding food labelling
practices. This includes concerns about country-of-origin labelling of food and the labelling of
olive oils in Australia.
2.27
To complement compliance and enforcement activities, the ACL Regulators developed guidance
material for consumers that explains Australia’s country-of-origin labelling framework as well as a
handy buying guide for consumers which provides information about the different grades of olive
oil products, how they differ as well as some storage tips. These publications provide important
guidance for consumers so they are able to make more informed purchasing decisions. The
information was also incorporated into the ACCC Shopper app.
2.28
The work undertaken by the ACL Regulators on food labelling issues was discussed at the
Meeting of Ministers for Consumer Affairs on Friday 7 December 2012. The Ministers welcomed
the extensive work undertaken by the Australian consumer agencies in response to concerns
raised about a range of food labelling issues. Ministers agreed that the ACL has the necessary
investigative and enforcement powers to effectively address food labelling concerns.
ACCCount 1 October to 31 December 2012
23
Product safety
Recalls
2.29
In the December 2012 quarter the ACCC received notifications for 116 consumer product safety
recalls, all of which were published on the Recalls Australia website (www.recalls.gov.au). Sixtysix of these recalls were managed by the ACCC, the remaining 50 were managed by other
Commonwealth regulators.
2.30
Of those 66 recalls, 38 recalls were independently initiated by suppliers without intervention by
regulators.
2.31
25 recalls resulted from negotiations initiated by the ACCC and three recalls were negotiated by
other ACL regulators.
Table 5: Recalls Negotiated – 1 October to 31 December 2012
Recalls Negotiated by the ACCC
25
Consumer complaint
2
Supplier’s mandatory report of consumer injury
7
Overseas recall intelligence
6
ACCC on-line survey of unsafe goods
5
ACCC compliance survey of regulated goods
4
Motor vehicle (jointly with Dept. Infrastructure &
Transport)
1
Recalls Negotiated by other ACL regulators
3
2.32
The number of ACCC negotiated recalls during this period is comparable with the number
negotiated during the last quarter of 2011 (24 recalls with a combined total of 36 distinct
products, representing 44% of recall notifications for the period).
2.33
A total of 1 132 111 unsafe, faulty consumer goods were recalled as a result of the ACCC’s
negotiations during this period.
Emerging hazards and product safety recalls
2.34
During the quarter the ACCC:

became a member of the University of NSW Research Group examining the safety /
stability of Quad Bikes. The Research Group is managing a $1 million project
designed to improve the safety, stability and crashworthiness of quad bikes. The
ACCC contribution of a number of quad bikes specifically designed for recreational
use will ensure that the full range of quad bikes available to Australian consumers are
assessed for crash safety and stability. The ACCC is also designing a consumer
awareness campaign to ensure that safe use messages and tips are directed at
consumer groups to complement the messages and tips being provided to users of
quad bikes on farms or in the workplace

Several multipurpose ladders tested by the ACCC were found to not comply with the
voluntary Australian standard. Recalls were initiated for two ladders. The investigation
is ongoing.

reviewed 602 mandatory recalls (a report of a product related injury under the
Australian Consumer Law) of which, 271 were referred to other regulators. The
ACCCount 1 October to 31 December 2012
24
remaining 331 were assessed or are currently under assessment. One report has
been assessed as posing a significant risk and two reports have been assessed as
posing a moderate risk

received 792 reports related to the safety of unregulated products and 46 reports
related to the safety of regulated products. These reports have been assessed, or are
currently under assessment. The reports that have been assessed include five that
have been assessed as posing an extremely high risk, two that have been assessed
as posing a very high risk, and eight that have been assessed as posing a high risk:
-
Three of the five ‘extremely high’ cases involved Christmas lights
and resulted in ACCC recalls. The other two cases relate to quad
bike deaths in Melbourne and New Zealand which have been
referred to the national quad bike project.
-
One of the ‘very high’ cases relate to the Bumbo Baby Seats which
was already subject to recall. The second relates to an elderly
person receiving serious injuries after being hit by a motor vehicle
whilst riding a mobility scooter. Five of the eight ‘high’ cases relate
to the following:
1.
non-compliant cigarette lighters which were recalled
2.
a 12-year-old seeking medical attention for swallowing two
small magnets
3.
an 18-month-old girl who died from an alleged bowel
perforation after swallowing a number of small round
magnets which were considered as part of the ‘powerful
magnets project’
4.
Tinyme Wooden Personalised Name Puzzles, containing
small parts, which were recalled
5.
sleeveless playsuit, sizes 1 and 2 (K-Mmart) - affected
garments do not have a fire danger warning label attached
to the collar, which were recalled
-
a further two ‘high’ cases involve Woolworths Homebrand safety
matches which resulted in recall
-
the remaining case relates to a person suffering an anaphylactic
shock attributed to paraphenylenediamine (PPD) in the hair dye,
who died after spending a year in a coma. The case is now part of
the paraphenylenediamine (PPD) in Hair Dyes Project.
New standards and bans
2.35
During the quarter:

a permanent ban on certain small, high powered magnets came into effect. a minor
amendment to the Tobacco (Graphic Health Warning) Labelling information standard
came into effect. The amendment more clearly conveys the type of damage smoking
can cause to the heart and therefore strengthens the ability of the health warning to
achieve its purpose. The amended graphic is consistent with the health warnings on
tobacco products sold in Canada and New Zealand.

In relation to standards, work progressed on a possible mandatory standard on
corded window coverings as well as a review of the existing standards for baby
walkers, cigarette lighters, trampolines, baby dummies, children’s nightwear,
household cots, prams and strollers and projectile toys. Outcomes of this work will
flow into recommendations for new or revised standards.

signed a Memorandum of Understanding with Standards Australia. A key goal is to
better align the development of voluntary Australian Standards and mandatory
standards.
Hazards associated with chemicals in consumer goods
2.36
The focus of work in this field for this quarter related to
ACCCount 1 October to 31 December 2012
25
2.37

dimethyl fumarate (DMF) in consumer goods – following reports of DMF in goods in
the Australian marketplace, the ACCC worked with industry to survey and test
products. DMF was not detected at any significant levels.

safety of do-it-yourself teeth whitening products for home use – following the recall of
some 28 different products in 2011, the ACCC reviewed the marketplace and tested a
number of products to ensure the safe limits for hydrogen peroxide and carbamide
peroxide were still being adhered to across the market.
An investigation into the potential hazards posed by laundry liquid capsules was undertaken
following a number of reports of injury in Australia and overseas. The issue of concern is the
confectionary-like look of some products which makes them appealing to children. As a first step
the ACCC is working with industry to address issues of concern.
Compliance campaigns
2.38
This quarter the ACCC’s product safety compliance campaigns focussed on two main areas:
Product Testing:

The ACCC led a joint product safety survey with state and territory consumer protection
agencies, covering toys for children less than three years, toys containing lead and other
heavy metals, aquatic toys, projectile toys, bicycles and banned products.

The survey program involved surveying products from over 3 300 retailers, including
internet based traders Australia wide. More than 94 000 product lines were surveyed and
over 11 000 products were removed from sale or seized.

The ACCC conducted over 1500 tests for lead and other heavy metals in toys, small parts
liberation, projectile toys and bicycles to ensure they met the reasonable use and abuse
tests in accordance with Australian mandatory safety standards.
Inspections:
2.39

The ACCC and Consumer Affairs Victoria (CAV) conducted a joint inspection of a newlyopened suburban shop selling non-compliant nursery furniture and baby products
imported from China. A wide range of non-compliant nursery furniture products were
embargoed and subsequently seized from the trader by CAV. Swift action by ACCC and
CAV prevented any non-compliant products being sold to consumers.

The ACCC conducted the annual show bag inspection prior to the Hobart and Perth
Shows. Over 500 show bags were inspected to identify non-compliant products. Only one
unsafe toy was detected and removed in Hobart, however there were a number of
cosmetics and sunglasses which required relabelling before both Shows opened and the
show bags were sold to consumers.
The ACCC attended Ausbikes Expo 2012 to increase pedal bicycle suppliers’ awareness of their
regulatory responsibilities and mandatory reporting requirements. Supplier education material
was distributed. Suppliers present included overseas manufacturers, importers/distributors and
retailers.
ACCCount 1 October to 31 December 2012
26
3. PROMOTE THE
ECONOMICALLY EFFICIENT
OPERATION OF, USE OF
AND INVESTMENT IN
MONOPOLY
INFRASTRUCTURE
ENERGY
3.1
The Australian Energy Regulator (AER) is Australia’s national energy market regulator and an
independent statutory authority. The AER is funded by the Commonwealth, with staff, resources
and facilities, provided by the ACCC. This section of the report details the AER’s achievements
in the December 2012 quarter.
State of the Energy Market report
3.2
On 20 December the Australian Energy Regulator (AER) published its sixth State of the Energy
Market report.
3.3
The report provides an overview of Australia's electricity and gas markets over the preceding 12
months. It supplements the AER's extensive technical and compliance reporting on the energy
sector and is intended to meet the needs of a wide audience, including government, industry and
the broader community. The 2012 edition aims to explain the factors that have driven up energy
prices and the range of policy and regulatory initiatives under way to address the problem. The
report also looks at other important developments in the market, including Tasmania and the
Australian Capital Territory (ACT) launching national retail reforms in July 2012 (several
jurisdictions plan to sign on in 2013). The AER launched an energy price comparison service as
part of the reforms (www.energymadeeasy.gov.au).
Consultation on the new regulation reform program in 2013
3.4
On 18 December 2012 the AER announced the consultation strategy on Better Regulation, a
program of work that will deliver improved regulation focused on the long term interests of
consumers. This follows changes to the National Energy Rules announced by the Australian
Energy Market Commission at the end of November 2012.
3.5
Throughout 2013the AER will work with stakeholders to develop a series of guidelines that will
set out a new approach to regulation that includes the assessment of expenditure proposals,
calculation of the allowed return on assets and consumer engagement.
3.6
The final guidelines are expected to be completed by the end of November 2013.
ACCCount 1 October to 31 December 2012
27
Decisions and determinations
Gas networks regulation matters
VICTORIAN GAS ACCESS ARRANGEMENT REVIEW – 2013 – 17
3.7
On 9 November 2012 the AER received revised access arrangement proposals from the
Victorian Gas distributors. These revised proposals where in response to the AER’s draft
decision in September 2012. The four service providers covered by the access arrangements are
APA GasNet, which owns the Victorian transmission system, and three distributors, Multinet, SP
AusNet and Envestra. Envestra also provides gas distribution services to Albury and its
surrounding region in New South Wales. Envestra’s Albury network is part of the AER’s review.
3.8
In response to the revised proposal, the AER sought submissions by 7 January 2013. The AER
expects to make a final decision by March 2013.
Electricity network regulation matters
SP AUSNET'S VICTORIAN BUSHFIRE ROYAL COMMISSION COST PASS-THROUGH
APPLICATION
3.9
On 23 October 2012 the AER released its final determination on SPI Electricity Pty Ltd’s
(SP AusNet) cost pass-through application. The application was for the recovery of costs arising
from its implementation of certain Victorian Bushfire Royal Commission recommendations.
3.10
Under the National Electricity Rules, a distribution network service provider (DNSP) may seek
the approval of the AER to pass through to electricity customers higher costs associated with
meeting new regulatory obligations. The pass-through provisions allow a network business to
recover additional costs during a regulatory control period, where certain conditions are satisfied.
ADVANCED METERING INFRASTRUCTURE REMOTE SERVICES
3.11
On 31 October 2012 the AER released a draft decision on the proposed charges and terms and
conditions for advanced metering infrastructure (AMI) remote services in Victoria.
3.12
AMI remote services are metering services that were previously provided through a field officer
visit, but can now be offered remotely to customers using AMI or smart meter technology. These
services include remote special meter reads, remote meter reconfiguration, and remote reenergisation and de-energisations (remote connections and disconnections). These services are
provided on a fee-for-service basis where requested by a customer who has a smart meter
installed.
3.13
The AER’s draft decision sets out the AER's assessment of the statements of proposed charges
and terms and conditions submitted by Powercor, Jemena, United Energy and CitiPower.
DRAFT DECISION ON ELECTRANET'S REVENUE PROPOSAL
3.14
On 30 November 2012 the AER issued its draft determination on ElectraNet’s revenue proposal
for the five year regulatory period from 1 July 2013 to 30 June 2018. ElectraNet is the principal
electricity transmission network service provider in South Australia.
3.15
The AER has not accepted ElectraNet’s forecast revenue of $1725.7 million ($ nominal) for the
regulatory period. Instead, the AER has determined a total revenue cap of $1507.3 million ($
nominal) which is 13 per cent lower than ElectraNet's proposal.
3.16
The most significant drivers of the differences between ElectraNet’s proposal and the AER’s
position are the expenditures required to operate and maintain the network, cost of new assets
and the cost of capital required to finance assets.
3.17
ElectraNet submitted a revised regulatory proposal on 16 January 2013. The AER is seeking
submissions from interested parties on the draft decision by 19 February 2013. The AER expects
to publish its final determination in April 2013.
DRAFT MURRAYLINK DETERMINATION
3.18
On 30 November 2012 the AER released its draft determination on Murraylink for the period
1 July 2013 to 30 June 2023.
ACCCount 1 October to 31 December 2012
28
3.19
A pre-determination conference was held on 12 December 2012 in Adelaide to explain the draft
decision and receive oral submissions.
3.20
Submissions in response to the draft decision and the consultants' reports closed on
19 February 2013.
2011 DEMAND MANAGEMENT INCENTIVE SCHEME EXPENDITURE FOR VICTORIAN DNSPS
3.21
Under the Demand Management Incentive Scheme (DMIS), at the end of each regulatory year,
DNSPs are required to submit a report to the AER on their demand management innovation
allowance (DMIA) expenditure. The AER conducts an assessment of the expenditure incurred by
the DNSP to ensure compliance with the DMIA criteria and entitlement to recover expenditure.
3.22
On 26 November 2012 the AER published a final decision following its review of DMIA
expenditures in 2011 for Citipower, Jemena, and SP AusNet. Powercor and United Energy did
not seek approval of any DMIA expenditures.
3.23
The DNSPs sought approval of total expenditures of around $550 000 relating to 3 projects. The
AER has reviewed and approved the expenditure claimed by the DNSPs as the expenditure is
consistent with the DMIA criteria.
VICTORIAN ELECTRICITY NETWORK TARIFFS FOR 2013
3.24
On 19 December 2012 the AER approved increases in Victorian electricity network tariffs for the
period 1 January 2013 to 31 December 2013 for CitiPower, Powercor, SP AusNet, Jemena
Electricity and United Energy.
3.25
Network tariffs recover the costs associated with transporting electricity along the low and high
voltage power lines which typically make up between 30-40 per cent of total residential electricity
bills in Victoria.
3.26
The AER is required to assess the Victorian DNSP’s annual pricing proposals to ensure that they
comply with the AER’s electricity distribution determination for the current regulatory period
(2011-15) which capped increases to network charges.
3.27
The increase in network charges in 2013 is based on the AER’s 2010 determination, but also
includes year-on-year adjustments in charges for use of the transmission network, payments for
solar PV feed-in tariffs, the outcomes from the Australian Competition Tribunal‘s review of the
AER’s 2010 price determination, which allowed the networks to claim higher allowances for the
costs of debt and other items, and a bonus for improved network reliability. In addition, network
charges for Powercor and SP AusNet include the pass through of additional costs for approved
bushfire related safety expenditure.
3.28
The DNSP’s network tariffs for 2013 now also include new time–of-use tariffs, known as flexible
tariffs, which will come into force from 1 July 2013. This follows the Victorian Government’s
initiative to allow customers who have a smart meter to move to these new tariffs, should they
choose do so.
ELECTRICITY TRANSMISSION STPIS
3.29
On 20 December 2012 the AER published its final decision on a new electricity transmission
service target performance incentive scheme (STPIS). The STPIS is a scheme designed to
provide incentives for each TNSP to maintain or improve outcomes in relation to reliability of
transmission network services at times most valued by customers. The scheme also seeks to
encourage transmission network owners to develop their networks in a way which facilitates
efficient wholesale electricity prices.
3.30
The AER’s final decision is to amend the scheme to focus more on lead indicators of reliability
and change the way performance against the market impact component is measured. The final
determination also introduces a new network capability component to incentivise TNSPs to
identify and implement low cost solutions to network limitations. The changes introduced in the
new version of the STPIS are based on the AER’s findings of its STPIS review.
COST THRESHOLDS REVIEW FOR THE REGULATORY INVESTMENT TEST FOR TRANSMISSION
3.31
On 20 November 2012 the AER published a final determination following its review of cost
thresholds for the regulatory investment test for transmission (RIT-T). The AER’s final
determination is that:
ACCCount 1 October to 31 December 2012
29
3.32

the $5 million cost thresholds in clause 5.6.5C, in relation to the definition of
replacement transmission network asset and in relation to transmission investment as
referred to in the definition of new network investment, be maintained at $5 million

the $35 million cost threshold in clause 5.6.6(y) be increased to $38 million. The
revised cost threshold will take effect on 1 January 2013.
The RIT-T is a cost-benefit test that transmission companies must apply before building
electricity transmission infrastructure. Transmission companies must apply the test in instances
where the costs of proposed transmission investments are above certain cost thresholds.
Energy wholesale markets
REPORT ON NEM CONGESTION
3.33
On 10 December 2012 the AER released a report on NEM congestion and associated disorderly
bidding by generators. The report focuses on the response to recent congestion in central
Queensland, New South Wales and Victoria by certain generators. The report highlights how
disorderly bidding associated with congestion impacts on the efficiency of the market by limiting
interregional trade, distorting economic dispatch and creating price volatility. The AER calls for
reforms to be made to market processes to reduce the ability of disorderly bidding to affect
market outcomes. The AER considers that the report is relevant to the Australian Energy Market
Commission’s Transmission Frameworks Review and the Productivity Commission’s inquiry into
Energy Network Regulation.
GUIDELINE ON GAS STTM SIGNIFICANT PRICE VARIATIONS
3.34
The AER released reports outlining significant gas price events in July 2012 and August 2012 in
gas markets. The reports analyse drivers of higher price gas days in the Victorian wholesale gas
market and the Short Term Trading Market (STTM) wholesale gas markets in Sydney, Brisbane,
and Adelaide over the period.
3.35
July 2012 saw the highest ever ex ante price in the Adelaide STTM hub and the highest ever
daily price in the Victorian wholesale gas market since November 2008. Both prices replaced
June 2012 high price records. Consistently higher prices which began in June continued to occur
in all markets over July and lead to a steady incline in the 30 day average price.
3.36
The average ex ante prices in August 2012 were significantly higher than August 2011. Sydney,
Victoria, and Adelaide exceeded the August 2011 average prices by 98, 42, and 60 per cent
respectively. These increases were caused in part by reductions in lower priced gas being
offered to the market. The AER has identified that demand was under forecast on 25 of the
31 August 2012 gas days in the Sydney market. Under forecasting of demand by participants
usually results in higher ex post prices relative to the ex ante price.
3.37
On 21 December 2012 the AER published a guideline outlining what will constitute a significant
price variation in the gas STTM. The AER will not report on gas market outcomes when there is
a significant price variation as defined in the guideline.
3.38
Under the guideline, the AER will monitor variations between the 2-day-ahead, ex ante and ex
post prices, the rolling 30 days average price as well as Market Operator Service payments.
3.39
The AER expects the significant price variation reports will be of interest to a wide range of
parties including existing market participants, participants considering entering the market, policy
makers, energy analysts and consumer groups.
Energy retail markets
3.40
Enforcement action on life support obligations
3.41
The AER took enforcement action over recent incidents in which customers known to require life
support equipment have unexpectedly lost energy supply due to errors on the part of their
distributor.
3.42
In recent months, both Aurora and ActewAGL have reported such incidents to the AER. The
businesses are now working on programs reviewing and strengthening internal processes to
meet their obligations to life support customers. Aurora has also paid penalties totalling $40 000
in relation to conduct the AER considers was in breach of those obligations.
ACCCount 1 October to 31 December 2012
30
3.43
The National Energy Retail Law and Rules, which commenced in Tasmania and the ACT on
1 July 2012 establish a framework for the protection of customers with medical life support
equipment. These customers are entitled to special protections to ensure continuity of energy
supply, and to advance notice and information from their distributor where interruptions to supply
are necessary or unavoidable. Energy retailers and distributors need to be able to identify their
life support customers, and must ensure that steps are taken to keep them safe.
3.44
The AER will continue to monitor compliance with these obligations to ensure that these
protections are delivered in the best way possible, and will look to businesses in jurisdictions that
have yet to move to the national framework to make sure they are prepared to meet these
obligations.
RETAIL PERFORMANCE REPORTING
3.45
On 20 December, the AER issued the AER retail energy market update July - September 2012
its first quarterly report on retail performance under the National Energy Retail Law and Rules.
3.46
The report contains an overview of key market and retail performance indicators for the ACT and
Tasmania (being the jurisdictions in which the Retail Law has commenced), including customer
switching levels, customers experiencing payment difficulties, hardship, disconnections and
reconnections.
ERM POWER RETAIL PTY LTD GRANTED GAS RETAILER AUTHORISATION
3.47
On 14 December 2012 the AER approved an application from ERM Power Retail Pty Ltd (ERM
Power Retail) for gas retailer authorisation under the National Energy Retail Law. ERM
Power Retail is authorised to retail gas when the National Energy Retail Law is adopted in each
participating jurisdiction.
3.48
ERM Power Retail is a wholly owned subsidiary of ERM Power Limited (ERM Power). ERM
Power Retail is ERM Power’s electricity retail business, which has been operating since 2007,
and is therefore authorised to retail electricity in the NEM. It is looking to expand its retail
business to include gas.
3.49
The AER sought public submissions on ERM Power Retail’s application for a retailer
authorisation however no submissions were received.
TELECOMMUNICATIONS
Decisions and determinations
Final access determination for the local bitstream access service
3.50
The ACCC has finalised terms and conditions for access to a wholesale service provided by
certain superfast networks. On 5 October 2012 the ACCC made a final access determination
(FAD) for the declared local bitstream access service (LBAS). This FAD will apply for three
years.
3.51
The LBAS is a wholesale access service for fixed line networks that are built or upgraded after
January 2011. The LBAS regulates access to a designated superfast telecommunications
networks, other than the National Broadband Network (NBN). A superfast telecommunications
network is a network used to supply a Layer 2 bitstream service where the download
transmission data rate is normally 25 Mbps or higher.
3.52
The FAD contains price and non-price terms and conditions for a 25/5 Mbps LBAS service. A
price ceiling is set at $27 per service per month, benchmarked to the NBN Co wholesale
broadband agreement (WBA) price for a similar service. The FAD requires LBAS providers to
supply a voice service if requested by an access seeker. The FAD also contains non-price terms
and conditions of access as a base position if parties cannot come to a commercial agreement.
Benchmarking to the NBN Co WBA is appropriate to ensure similar terms and conditions for
retail providers of broadband services, whether they acquire NBN-based services or not. This
FAD should provide some certainty in terms and conditions for industry participants.
ACCCount 1 October to 31 December 2012
31
National Broadband Network (NBN)
Points of interconnection to the NBN published
3.53
On 5 November 2012 the ACCC published the Listed Points of Interconnection to the NBN. A
Point of Interconnection (POI) is the connection point that allows retail and wholesale service
providers to connect to the NBN. Under section 151DB of the Act, the ACCC is required to
prepare a written list of POIs and publish a list in force on its website.
Consultation on new measures relating to “pull through” during
migration of services to the NBN
3.54
The ACCC has released a discussion paper inviting comments on two measures developed by
Telstra under its plan for migrating services to the NBN. The measures relate to a specific
process that will be used by NBN Co in limited circumstances to connect premises to the NBN.
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 premises.
3.55
These processes may have important implications for the ability of wholesale customers to
minimise disruption to the supply of communication services to consumers. Further information
on the measures and migration plan is available on the ACCC website.
NBN Co special access undertaking (SAU)
3.56
The ACCC has begun consultation on NBN Co’s proposed terms and conditions for access to its
National Broadband Network. The latest Special Access Undertaking (SAU) was lodged with the
ACCC on the 18 December 2012. On the same day, NBN Co withdrew the SAU it lodged on 28
September 2012. The 18 December 2012 SAU includes amended non-price terms and some
other amendments which NBN Co states “clarify the operation of the SAU”. If accepted, the
revised SAU will form part of the regulatory framework for access to the National Broadband
Network.
Reports released
Telstra’s current cost accounting report
3.57
3.58
In November 2012 the ACCC published Telstra’s current cost accounting report relating to the
accounting separation of Telstra for second half and full year 2011-12. This report provides
information in those financial statements in respect of Telstra’s core regulated services. These
core services include the following regulated wholesale services provided on Telstra’s public
switched telephone network (PSTN):

the unconditioned local loop service

PSTN originating and terminating access services and

the local carriage service.
The next report will be assessed and published in May 2013.
FUEL PRICE MONITORING
3.59
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.
Price movements in the December 2012 quarter
PETROL
3.60
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
ACCCount 1 October to 31 December 2012
32
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) in Australian cents per litre (cpl).
3.61
Chart 1 shows movements in these prices over the period 1 October to 31 December 2012.
Retail RULP prices are shown on the left hand side of the chart and Singapore Mogas 95
Unleaded prices are shown on the right hand side.
3.62
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 2012
160
110
100
140
90
130
80
120
70
Singapore Mogas 95 Unleaded
(7-day rolling average price, lagged by 10 days), RHS
110
Australian cents per litre
Australian cents per litre
Five largest cities (7-day rolling average retail price), LHS
150
60
100
50
01-Oct-12 15-Oct-12 29-Oct-12 12-Nov-12 26-Nov-12 10-Dec-12 24-Dec-12
Note: the cyclical movements in the seven-day rolling average retail price series arise because petrol
price cycles in 2012 have been longer than seven days. Traditionally the ACCC has used a sevenday rolling average to smooth out the effects of the petrol price cycle.
3.63
As illustrated in the chart, both retail RULP prices and Singapore Mogas 95 Unleaded prices
decreased in the December 2012 quarter. Seven-day rolling average retail RULP prices in the
five largest cities decreased from 143.5 cpl at the beginning of October 2012 to 137.4 cpl at the
end of December 2012—an overall decrease of 6.1 cpl during the quarter.
3.64
The decrease in Singapore Mogas 95 Unleaded prices over the December quarter was
influenced by:

ongoing pessimism regarding world economic conditions (including the inability of the
White House and Congress to agree to a ‘fiscal cliff’ deal before the end of the year)

increased supply of oil from the North Sea

ample supply and weak demand in the Asian region.
DIESEL
3.65
The ACCC monitors the movement of retail diesel prices against the price of Singapore Gasoil
with 10 parts per million (ppm) sulphur content. Chart 2 shows daily average retail diesel prices
on the left hand side of the chart and seven-day rolling average Singapore Gasoil 10 ppm prices
(lagged by 11 days) on the right hand side.
3.66
Daily average retail diesel prices in the five largest cities decreased by 2.6 cpl over the
December 2012 quarter—from 151.1 cpl at the beginning of October to 148.5 cpl at the end of
September. Singapore Gasoil 10 ppm prices decreased over the quarter due to relatively weak
demand in the Asian region.
ACCCount 1 October to 31 December 2012
33
Chart 2: Movements in retail diesel prices and international
benchmark prices—1 October to 31 December 2012
100
Five largest cities
(daily average retail price), LHS
150
90
140
80
Singapore Gas Oil 10ppm
(7-day rolling average price, lagged by 11 days), RHS
130
70
Australian cents per litre
Australian cents per litre
160
120
60
01-Oct-12 15-Oct-12 29-Oct-12 12-Nov-12 26-Nov-12 10-Dec-12 24-Dec-12
AUTOMOTIVE LPG
3.67
The ACCC monitors the movement of retail automotive LPG prices against the average of Saudi
Aramco contract prices for propane and butane, which are issued on the first day of the month
(see Chart 3).
3.68
Average retail automotive LPG prices in the five largest cities (on a seven-day rolling average
basis) increased by 0.9 cpl over the December 2012 quarter—from 74.8 cpl to 75.7 cpl. The
prices of the Saudi Aramco contract prices over the quarter were broadly stable.
Chart 3: Movements in retail automotive LPG prices and international
benchmark prices—1 October to 31 December 2012
90
80
80
Five largest cities
(7-day rolling average retail price)
70
60
Monthly Saudi CP benchmark
70
60
50
50
40
40
30
01-Oct-12 15-Oct-12 29-Oct-12 12-Nov-12 26-Nov-12 10-Dec-12 24-Dec-12
Australian cents per litre
Australian cents per litre
90
30
ACCC Petrol monitoring report 2012
3.69
On 6 December 2012 the Australian Competition and Consumer Commission released its 2012
report on the prices, costs and profits of unleaded petrol in Australia. The key findings of the
2012 report include:

International prices were the main influences on domestic petrol prices in Australia,
reaching record levels during 2011-12. International price of petrol plus taxes account
ACCCount 1 October to 31 December 2012
34
for 88 per cent of the retail price of petrol, while the local wholesale and retail
industries account for 12 per cent of the final price.
3.70

Weak economic conditions in developed countries and slower growth of Asian
economies were not enough to offset the effects of Middle East unrest and continued
depletion of low-cost conventional crude oil supplies which kept crude oil prices at
their highest annual levels ever during 2011-12.

The continued strength of the Australian dollar provided some protection from higher
international prices. Even with the recent increases, petrol prices in Australia remain
among the lowest in the OECD.

Profits in the Australian downstream petroleum industry across all products in 2011-12
were $408 million or around 0.5 cents per litre. The profit result for the downstream
industry for 2011-12 represents a fall of 81 per cent compared with the previous
twelve months.

Results in 2011-12 were affected by losses in refining. Australia’s refining sector is
vulnerable to overseas competition. Mobil ceased operations at the Port Stanvac
refinery in Adelaide in 2003 and formally closed it in 2009. In October 2012 Shell
closed its Clyde refinery in Sydney while Caltex has recently announced its decision
to close the Kurnell refinery, also in Sydney, in 2014. These refinery closures will bring
to five the number of refineries operating in Australia and are evidence of the refining
sector adjusting to the challenges of import competition.

The retail sector earned an average of 1.5 cpl on all its fuel products. This increased
to 2.4 cpl when convenience store sales are included.
Price cycles in major metropolitan markets and relatively higher prices in regional centres
continue to be the main sources of consumer concern. Petrol price cycles are not responses to
changes in cost but are the result of the pricing policies of major fuel retailers. Prices in regional
areas generally tend to be higher than in major cities due to lower volume of petrol sold at
regional retail sites, higher transport costs and lower levels of competition. Lags between
changes in prices in regional locations and capital cities sometimes accentuate the countrycapital city differential.
AVIATION AND AIRPORTS
Decisions and determinations
Airservices Australia price notification
3.71
In November 2012 the ACCC released a discussion paper for the review of quality of service
monitoring applying at Brisbane, Melbourne, Perth and Sydney airports.
3.72
The release of the discussion paper initiates the ACCC’s review of the quality of service
monitoring which forms part of the implementation of the Australian Government’s response to
recommendations made by the Productivity Commission in its 2011 inquiry into the economic
regulation of airport services.
3.73
The ACCC considers it is timely and appropriate to conduct a comprehensive review of the
information currently collected for quality of service monitoring and the extent to which the
information adequately supports the objectives of the monitoring program. The ACCC’s review of
the quality of service monitoring is a consultative process. Interested parties were invited to
make written submissions to the issues raised in the discussion paper by 19 December 2012.
3.74
On the basis of comments by stakeholders on the discussion paper, the ACCC will issue a draft
Airport quality of service monitoring guideline for consultation. Interested parties will be again
invited to make written submissions to the draft guideline when they are released in early 2013.
3.75
The Australian Government has directed the ACCC to monitor the supply of aeronautical and car
parking services at Australia’s major airports. The quality of service monitoring program along
with the price monitoring and financial reporting arrangements form part of the monitoring
program administered by the ACCC, which apply at Brisbane, Melbourne, Perth and Sydney
airports.
ACCCount 1 October to 31 December 2012
35
RAIL ACCESS
Decisions and determinations
Hunter Valley Access Undertaking
3.76
The ACCC released its Decision on the variation application submitted by ARTC to establish the
efficient train configuration for the Hunter Valley coal chain and the associated access charges
on 17 October 2012. The accepted arrangements include applying revised access charges to the
two new, more efficient train services identified by ARTC in consultation with the Hunter Valley
Coal Chain Coordinator. These more efficient train services are the longest trains which can
currently operate on the network. The revised access charges promote more efficient use of the
network by coal chain participants.
3.77
The HVAU requires ARTC to submit documentation for the purposes of an annual compliance
assessment to be conducted by the ACCC. On 1 June 2012 ARTC submitted its annual
compliance documentation for the 6 month period from 1 July to 31 December 2011, The ACCC
continues to assess ARTC’s compliance, which is expected to be finalised shortly.
3.78
ARTC submitted a variation application to the ACCC on 3 August 2012 to include a positive
performance incentive mechanism into the HVAU. This application is the first of two potential
variations that are envisaged under the HVAU that relate to the development and inclusion of a
positive performance incentive mechanism. The ACCC conducted a consultation process in
relation to ARTC’s application. In light of submissions received, ARTC withdrew its application on
24 December 2012 and has indicated it will resubmit a positive performance incentive
mechanism in 2013.
3.79
Interstate Rail Network Access Undertaking
3.80
The ACCC is currently assessing a variation application submitted by ARTC on 4 September
2012 to include the Southern Sydney Freight Line (SSFL) and associated access charges into
the IAU. The SSFL is a tripartite agreement between the Commonwealth Government, New
South Wales Government and ARTC to alleviate the major bottleneck in the rail freight network
in Sydney. On 18 September 2012 the ACCC released a Consultation Paper seeking industry
comment on the variation. The ACCC is currently considering submissions received.
Bulk wheat export-access to port terminal services
3.81
During 2011 the ACCC accepted undertakings under Part IIIA of the CCA regulating access to
services for the export of bulk wheat at port terminals operated by GrainCorp at seven port
terminals on the East Coast, Australian Bulk Alliance (ABA) at the Port of Melbourne, Viterra at
six ports in South Australia and Cooperative Bulk Handling (CBH) at four ports in Western
Australia.
3.82
The access undertakings provide for:

obligations on port operators not to discriminate or hinder access in the provision of
port services

clear and transparent port loading protocols for managing demand for port terminal
services

obligations on port operators to negotiate in good faith with eligible wheat exporters
for access to port terminal services

the ability of wheat exporters to seek mediation or arbitration on terms of access in the
event of a dispute.
3.83
The ACCC has a role in access arrangements for wheat exporters as part of the deregulation of
the wheat industry. Access undertakings are intended to ensure that third party exporters are
able to access the port terminals operated by vertically integrated port terminal operators,
ensuring competition in this significant export market.
3.84
Since accepting the undertakings in 2011, the ACCC has been monitoring each of the port
operators to ensure compliance with the respective undertakings. This includes examining the
access agreements between port terminal operators and the associated accredited wheat
exporters to ensure that access arrangements to port terminal services do not discriminate and
monitoring the reporting outputs of each of the port terminal operators.
ACCCount 1 October to 31 December 2012
36
3.85
On 30 November 2012 the ACCC decided not to object to GrainCorp’s proposal to offer longterm agreements (LTAs) to users of its bulk grain export facilities on the east coast of Australia.
The proposal allows GrainCorp to allocate up to 60% of its port capacity through LTAs to
exporters who are willing to commit to minimum export volumes over a three-year period. At
least 40% of capacity per port, per month will remain available to all exporters on an annual
basis. GrainCorp’s revised Port Terminal Service Protocols incorporating LTAs came into effect
on 27 December 2012 and GrainCorp intends to invite nominations for long-term capacity in
February 2013.
3.86
On 3 December 2012 the Wheat Export Marketing Amendment Act 2012 (the Amending Act)
received Royal Assent. The effect of the Amending Act is to inter alia: abolish the Wheat Export
Accreditation Scheme (10 December 2012); wind up Wheat Exports Australia (31 December
2012); and provide for the conditional removal of the access test requirements for port terminal
operators on 30 September 2014.
3.87
The amended WEMA provides that in order for the access test to be removed, the Minister for
Agriculture, Fisheries and Forestry must approve an industry code of conduct governing port
access before 1 October 2014. Once approved by the Minister the code of conduct must then be
declared as a mandatory code under the CCA. A Code Development Advisory Committee has
been formed to provide industry views on the development of the code to the Minister and the
Department of Agriculture, Fisheries and Forestry as well as Treasury who is responsible for
competition policy. The committee is chaired and administered by Grain Trade Australia and
includes representatives of port terminal operators who will be covered by the code, the
Australian Grain Exporters Association, Grain Producers Australia and the National Farmers
Federation. As the code will be prescribed and enforced under the CCA, the ACCC will be
providing advice on the proposed code.
3.88
In addition to the above changes, the Amending Act also modifies the current access test by
requiring port terminal operators to include in access undertakings from 10 December 2012 an
obligation to comply with Continuous Disclosure Rules (CDRs) as prescribed in WEMA. In
anticipation of this amendment, on 26 November 2012 CBH applied to vary its 2011 Undertaking
to include an obligation to comply with the CDRs. The ACCC consented to the variation on
5 December 2012. Undertakings accepted from Viterra, ABA and GrainCorp already included an
obligation to comply with CDRs
WATERFRONT AND SHIPPING
ACCC 2011 – 12 Container Stevedoring Monitoring Report
3.89
On 1 November 2012 the ACCC released its Container Stevedoring Monitoring Report for 2011–
12. The ACCC’s container stevedoring monitoring program is undertaken under a direction from
the Federal Treasurer pursuant to Part VIIA of the Competition and Consumer Act (2010). The
ACCC is required to monitor prices, costs and profits of container terminal operator companies at
the ports of Adelaide, Brisbane, Burnie, Fremantle, Melbourne and Sydney.
3.90
Container stevedoring involves lifting containers on and off ships. In fulfilling its monitoring
responsibility, the ACCC produces and publishes annual container stevedoring monitoring
reports.
3.91
This was the 14th annual report released by the ACCC. The report highlights some of the
positive developments in the stevedoring industry since reforms to Australia's waterfront in 1998.
Since that time, container volumes have more than doubled, while real costs of providing
stevedoring services have decreased by 45 per cent. Much of this cost saving has been passed
on to service users, with unit revenues (a proxy for stevedoring prices) falling by 38 per cent
since 1998.
3.92
However, the report also identifies some challenges in moving towards a more competitive and
productive industry. For example, industrial disputes, including strike action and reported 'goslow' strategies, disrupted stevedoring performance in 2011-12. The report notes that if this sort
of disruption were to continue, it could undermine expected future gains from greater capacity
and competition.
3.93
The entry of a third stevedore and plans for capacity expansion are welcome developments in
the Australian stevedoring industry. They are expected to result in greater competition and
improvements in productivity in the future. However, the report also notes that new entry and
ACCCount 1 October to 31 December 2012
37
greater capacity will likely increase the complexity of land-side arrangements at ports. Planning
and action from stevedores, ports, governments and other operators will therefore be required.
WATER
State Water price approval/determination pre-application
consultation
3.94
The ACCC has commenced public consultation with State Water Corporation’s customers and
other stakeholders by providing information on the process for the ACCC’s review and approval
or determination of State Water’s regulated charges that will apply from 1 July 2014. This will be
the first time that State Water will be regulated by the ACCC under the Water Charge
(Infrastructure) Rules 2010. The ACCC has held public information sessions in Moree, Dubbo
and Lithgow and will be holding further sessions in the Goondiwindi, Tamworth/Narrabri,
Deniliquin, Condobolin and Griffith areas in the coming months. In addition to providing relevant
information regarding the upcoming process the sessions have been beneficial to ACCC staff as
attendees have provided advice on the issues of particular interest to their local areas.
ACCCount 1 October to 31 December 2012
38
4. 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 have become exposed to more
complex transactions occurring across multiple jurisdictions.
4.2
This quarter, the ACCC participated in a number of events hosted by the two pre-eminent
regulatory networks: the International Competition Network’s Cartel Workshop and Merger
Workshop; and the International Consumer Protection Enforcement Network’s Annual
Conference and Consumer Protection Best Practice Workshop.

The ICN Cartel Workshop’s theme was enhancing global cartel enforcement by
building on solid foundations. Members provided input and assistance in the review of
the ICN Anti Cartel Enforcement Manual.

The Merger Workshop explored international approaches to merger regulation and
world best practice, including building international networks and assisting in the
continued functions of the ICN Merger Working Group (MWG).

The ICPEN workshop and conference focused on future work priorities, enforcement
techniques and improving international cooperation. Consumer protection in the
online environment continues to be a priority for ICPEN members.
4.3
As the current chair of the Organisation for Economic Co-operation and Development (OECD)
Product Safety Working Party, the ACCC is focusing on improving information sharing across
national borders. The ACCC also participates in the International Consumer Product Health and
Safety Organization (ICPHSO) forum for the exchange of ideas and information on health and
safety issues related to consumer products manufactured and marketed in the global
marketplace.
4.4
The ACCC progressed work through the OECD on the development of a global recalls database,
with the pilot database being launched on 19 October 2012 during the International Product
Safety Week 2012.
4.5
The ACCC regularly engages and exchanges information with other regulators internationally in
respect of investigations and merger assessments. This quarter, the ACCC:

received and responded to 13 requests for information from agencies in Canada, New
Zealand, Vietnam, UK and the US
ACCCount 1 October to 31 December 2012
39

4.6
made five requests for information to agencies in Japan, New Zealand, UK and the
US.
Recognising the value of effective competition and consumer protection regulation and regional
cooperation, the ACCC continues to commit efforts to relationship and capacity building in the
Asia-Pacific region, and beyond. During the December quarter this support included:

participation at the OECD-Korea Policy Centre training seminar

participation at the ASEAN Experts Group on Competition Capacity Building
Workshop

hosting delegations from Indonesia, Kenya, Malaysia, South Korea and Thailand.
International cooperation
4.7
The ACCC participated in International Product Safety week, 15-19 October 2012. It facilitated
the development of and attended the launch of a global recalls portal, GlobalRecalls on 19
October 2012. This portal is an initiative of an OECD working party, chaired by the ACCC and is
designed to help consumers, business and government to keep up to date with product recalls in
different countries. Australia, the United States, Canada and the European Union are current
contributors to GlobalRecalls. The ACCC also conducted an awareness campaign aligned to
International Product Safety Week, highlighting the potential product safety risks when they buy
online.
4.8
The ACCC chaired the 5th Session of the OECD Working Party on Product Safety. Other
projects include improving information sharing between regulators through the use of an internet
portal; investigation of the development of an injury data base; and facilitating improved
understanding and alignment of risk assessment processes.
4.9
The ACCC is also working with the United States, Canada, and Europe to align international
safety requirements for targeted products. In the first instance, the project is focused on infant
slings, chair-top booster seats and corded internal window coverings. The working paper on
corded internal window coverings has been completed and papers for the other targeted
products are well advanced.
4.10
In November 2012 ACCC Deputy CEO Mark Pearson attended an international meeting of
economic regulators. The purpose of the meeting was to explore the possibility of establishing an
OECD Network of Economic Regulators from multiple sectors and jurisdictions. A draft paper on
principles for the governance of regulators was also discussed and participants were briefed on
current regulatory initiatives in various countries (including Australia) and related OECD work.
CONSUMER ENGAGEMENT
Consumer Consultative Committee
4.11
The Consumer Consultative Committee (CCC) meets three times a year to discuss issues
affecting consumers and to provide tangible outcomes for consumers through work undertaken
in combination with CCC members and the ACCC. Members of the CCC include representatives
from CHOICE, Financial Counselling Australia, the Indigenous Consumer Assistance Network;
the Council on the Ageing; the Consumer Law Action Centre, and others.
4.12
On 4 December the ACCC held its final CCC meeting for 2012. The meeting included
presentations on the ACCC’s activities and use of powers under Australian Consumer Law.
Members also discussed the initial planning for the 2013 Consumer Congress and Ruby
Hutchison Memorial Lecture. In 2013 the ACCC will conduct its biannual review of CCC
membership.
Consumer protection issues in Indigenous communities
4.13
On 24 October and 6 December the ACCC participated in a meeting of the National Indigenous
Consumer Strategy Reference Group to coordinate various activities directed at the interests of
Indigenous consumers.
ACCCount 1 October to 31 December 2012
40
Product safety awareness raising
4.14
The Product Safety Australia website received 300 000 visits in the December 2012 quarter.
4.15
The Safe Santa campaign including a ‘Safe Santa Checklist’ was launched on 22 November
2012. This resulted in significant increase in Facebook followers (over 400% increase since
campaign launch). The Safe Santa Checklist available at www.productsafety.gov.au/safesanta.
4.16
The Grim Keeper Goal Post Safety Campaign continued with the distribution of information
alerting users of movable soccer goals to their hazards.
4.17
An Android app for the Recalls website was developed and launched in the December 2012
quarter. This complements the Recalls iPhone App. A mobile recalls site was also released
during the quarter.
4.18
Social media highlights include:

the number of ‘Likes’ on our Facebook page increased by 211% for the month of
November

the number of new followers on Twitter for the month of November increased by 33%

the Keeping Baby Safe app was downloaded approximately 5200 times

the Recalls app was named App of the Week on Channel 7’s breakfast show,
‘Sunrise’
BUSINESS ENGAGEMENT
Infrastructure Consultative Committee
4.19
The Infrastructure Consultative Committee (ICC) meets twice a year to discuss the broad issues
of infrastructure regulation. Its members are representative of a variety of infrastructure sectors
including energy, telecommunications, water, rail, port and airports.
4.20
The ICC met in Melbourne in December 2012. The focus of the meeting was on increasing
customer involvement in the regulatory process. Recent critical issues for the ACCC/AER and
other members were also discussed.
Franchising Consultative Committee
4.21
In October 2012 the ACCC held a meeting of its Franchising Consultative Committee which is
made up of franchisors, franchisees, lawyers and academics. Members discussed the roles of
the new state small business commissioners, exclusive dealing notifications lodged by
franchisors and recent franchising related carbon price matters.
Small Business Consultative Committee
4.22
The Small Business Consultative Committee met on 12 October 2012. The meeting included a
presentation about new ACCC guidance on unconscionable conduct, and provided members
with an update regarding carbon pricing and enforcement matters. The ACCC’s revised Small
Business and the CCA (formally Small Business and the TPA) guidance was also launched.
Members also discussed issues of interest in their various sectors.
Energy Marketing Forum
4.23
On 30 November the ACCC participated in the Energy Marketing Forum to discuss strategies
relating to energy marketing and identify potentially emerging or systemic issues.
ACCCount 1 October to 31 December 2012
41
Utility Regulators’ Forum
4.24
The Utility Regulators Forum (URF) was established to encourage co-operation between
Commonwealth, state and territory based regulators. The ACCC provides the secretariat for the
URF as well as producing and editing its quarterly newsletter, Network.
4.25
The URF met in Brisbane on November 2012 to discuss a range of regulatory issues including
major and proposed changes in energy regulation and the implications of the recent High Court
decision on Part IIIA of the Competition and Consumer Act.
Market research
4.26
The ACCC concluded market research in the October to December quarter, highlighting the
ways small businesses want to engage with and receive information and updates from the
ACCC.
ACCCount 1 October to 31 December 2012
42
5. APPENDICES
MAJOR SPEECHES
5.1 During the December quarter the ACCC delivered 22 addresses including:

ACCC report
7 October 2012
Dr Michael Schaper, Deputy Chair
Franchising Council of Australia Legal Symposium, Canberra

Competition and consumer issues: State of play in the food and grocery sector
11 October 2012
Mr Rod Sims, Chairman
Australian Food and Grocery Council Industry Leaders Forum, Canberra

Addressing the key drivers of electricity price increases
24 October 2012
Mr Rod Sims, Chairman
Energy Users Association of Australia, Annual Conference

Ports – what measure of regulation?
25 October 2012
Mr Joe Dimasi, Commissioner
Ports Australia Conference, Adelaide
ACCCount 1 October to 31 December 2012
43
COMPLAINTS AND INQUIRIES
5.2 During the December 2012 quarter the ACCC responded to 55 791 complaints and inquiries from
businesses and consumers (email 31 896, telephone 23 423 and letter correspondence 472). Of
these, 56 069 complaints and inquiries were entered into the ACCC’s database with 447 matters
flagged for enforcement assessment. Complaints and inquires not entered into the ACCC’s
database were determined to raise issues that fell outside of the ACCC’s role and responsibilities.
Table 6: ACCC complaints, investigations and litigation funnel
Dec 2012
quarter
Category
Contacts received (phone, email and letters)
55 791
Contacts recorded in the database
50 959
Under assessments commenced
447
Initial investigations commenced
136
In-depth investigations commenced
30
Litigation commenced
4
Table 7: Geographic location of inquirers and complainants recorded in the national
database
State
ACL
Scams
(ACL +
Scams)
Anticompetitive
Practices
Industry
Codes
Other
Total
NSW
4 142
7 415
11 557
166
36
1 695
13 454
Vic.
4 021
5 566
9 587
164
20
1 593
11 364
QLD
3 330
6 546
9 876
135
25
1 118
11 154
WA
1 410
2 421
3 831
55
14
590
4 490
SA
1 154
2 323
3 477
53
14
457
4 001
ACT
944
1 712
2 656
26
3
373
3 058
Tas.
280
786
1 066
8
5
116
1 195
NT
152
300
452
10
0
56
518
Overseas
137
3 700
3 837
4
1
89
3 931
Not
Supplied
178
59
237
23
2
74
336
Note: single contacts may involve multiple issues
ACCCount 1 October to 31 December 2012
44
Table 8: Complaints and inquiries – top ten by industry
Industry
Non-store retailing (predominantly online sales)
Contacts
1 292
Wired telecommunications network operation
667
On selling electricity and electricity market operation
630
Misc. store-based retailing
468
Car retailing
450
Finance and investment services
443
Department stores
380
Air transport
355
Advertising services
324
Misc. electrical and electronic goods retailing
315
Note: single contacts may involve multiple industries
Table 9: Top 10 scam categories reported to the ACCC
Scam category
Contacts
Advanced fee /up-front payment
8 719
Lottery and sweepstakes
4 541
Phishing and identity theft (incl. banking & online account)
4 524
Computer hacking (incl. malware and viruses)
3 437
Online auction and shopping
2 540
Unexpected prizes
1 649
False billing
1 007
Job and employment
924
Dating and romance (including adult services)
846
Mobile phone (ringtones, competitions and missed calls)
536
ACCCount 1 October to 31 December 2012
45
Table 10: Top possible contraventions of the Competition and Consumer Act
(excluding scams)
Predominately fair trading and consumer protection including
Australian Consumer Law
Contacts
Misleading or deceptive conduct
4 064
Guarantee as to acceptable quality
3 021
Wrongly accepting payment
1 215
Guarantee as to due care and skill
753
Guarantee relating to the supply of goods by description, sample or
demonstration
376
General product safety inquiry/complaint - unregulated product
375
Guarantee as to fitness for any disclosed purpose etc.
367
False representation price
289
Guarantees as to fitness for a particular purpose etc.
251
Guarantee as to reasonable time for supply
205
False representations goods - standard, quality, value, grade,
composition, style etc.
202
Predominately effective competition and informed markets part IV
and IVB
Contacts
Exclusive dealing
125
Contravention of industry codes
120
Misuse of market power
118
ACCCount 1 October to 31 December 2012
46
ENFORCEMENT OUTCOMES & MATTERS IN COURT
Litigation
Commenced
COMPETITION
Cartels
Yazaki Corporation & Australian Arrow Pty Ltd
commenced
|
13 December 2012
jurisdiction
|
Federal Court Adelaide
CONSUMER PROTECTION
Credence claims
DuluxGroup (Australia) Pty Ltd
commenced
|
5 December 2012
jurisdiction
|
Federal Court Perth
Consumer Guarantees
Hewlett-Packard Australia Pty Ltd
commenced
|
16 October 2012
jurisdiction
|
Federal Court Sydney
Consumer Guarantees
Launceston Superstore Pty Ltd & Ors (trading as Harvey
Norman)
commenced
|
19 November 2012
jurisdiction
|
Federal Court Sydney
Ongoing
COMPETITION
Cartels
Air New Zealand Ltd
commenced
|
jurisdiction
|
12 May 2010
Federal Court Sydney
Credence claims
ANZ Banking Corporation Ltd
commenced
|
25 July 2007
jurisdiction
|
Federal Court Brisbane
Consumer guarantees
Cement Australia
commenced
|
jurisdiction
|
12 September 2008
Federal Court Brisbane
Consumer guarantees
Flight Centre Ltd
commenced
|
jurisdiction
|
9 March 2012
Federal Court Brisbane
ACCCount 1 October to 31 December 2012
47
Cartels
P. T. Garuda Indonesia Ltd
commenced
|
2 September 2009
jurisdiction
|
Federal Court Sydney
Cartels
Prysmian Cavi e Sistemi
commenced
|
23 September 2009
jurisdiction
|
Federal Court Adelaide
Cartels
Renegade Gas Pty Ltd, Speed-E-Gas Ltd & Ors
commenced
|
23 August 2012
jurisdiction
|
Federal Court Sydney
CONSUMER PROTECTION
Small Business Scam
Adepto Publication Pty Ltd
commenced
|
30 September 2010
jurisdiction
|
Federal Court Sydney
Unfair contract terms
Advanced Medical Institute Pty Ltd & Ors
commenced
|
21 December 2010
jurisdiction
|
Federal Court Melbourne
Door-to-door sales
AGL Sales Pty Ltd & Ors
commenced
|
26 March 2012
jurisdiction
|
Federal Court Melbourne
Small business scam
Artorios Ink Pty Ltd
commenced
|
jurisdiction
|
Unfair contract term
Bajv Pty Ltd t/as Europcar
commenced
|
10 November 2011
jurisdiction
|
Federal Court Hobart
Vulnerable and
disadvantaged person
Breast Check Pty Ltd
commenced
|
jurisdiction
|
Product safety
Dateline Imports Pty Ltd
commenced
|
25 June 2012
jurisdiction
|
Federal Court Brisbane
Vulnerable and
disadvantaged person
Excite Mobile Pty Ltd
commenced
|
jurisdiction
|
Credence claim
King Island Meatworks & Cellars Pty Ltd & Ors
commenced
|
18 August 2011
jurisdiction
|
Federal Court Melbourne
Vulnerable and
disadvantaged person
Lux Distributors Pty Ltd
commenced
|
10 May 2012
jurisdiction
|
Federal Court Melbourne
ACCCount 1 October to 31 December 2012
10 September 2012
Federal Court Melbourne
21 December 2011
Federal Court Perth
7 December 2011
Federal Court Adelaide
48
Vulnerable and
disadvantaged person
Safe Breast Imaging Pty Ltd & Anor
commenced
|
21 December 2011
jurisdiction
|
Federal Court Perth
Small business scam
Safety Compliance Pty Ltd & Ors
commenced
|
16 April 2012
jurisdiction
|
Federal Court Sydney
Vulnerable and
disadvantaged person
Sensaslim Australia
commenced
|
jurisdiction
|
16 June 2011
Federal Court Sydney
Pyramid selling
Leslie Forsyth Stott
commenced
|
jurisdiction
|
19 July 2012
Federal Court Melbourne
Misleading conduct
The Jewellery Group (trading as Zamels)
commenced
|
5 April 2011
jurisdiction
|
Federal Court Adelaide
Credence claims
Turi Foods Pty Ltd & Ors
commenced
|
5 September 2011
jurisdiction
|
Federal Court Melbourne
Continues following settlement with some of the parties
Alleged contempt
Peter Forster
commenced
jurisdiction
Online advertising
Google Inc (appeal)
commenced
|
jurisdiction
|
Telecommunications
TPG Internet Pty Ltd (appeal)
commenced
|
21 June 2012
jurisdiction
|
Federal Court Melbourne
|
|
11 November 2011
Federal Court Sydney
22 June 2012
High Court of Australia
Concluded
COMPETITION
Cartel
Cartel
Cathay Pacific Airways Ltd
commenced
|
30 April 2009
concluded
|
6 December 2012
jurisdiction
|
Federal Court Sydney
outcome
|
$23 million in penalties for
engaging in cartel conduct.
Emirates
commenced
concluded
jurisdiction
outcome
ACCCount 1 October to 31 December 2012
|
|
|
|
18 August 2009
11 October 2012
Federal Court Sydney
$10 million in penalties for
engaging in cartel conduct.
49
Cartel
Singapore Airlines Cargo Pty Ltd
commenced
|
22 December 2008
concluded
|
6 December 2012
jurisdiction
|
Federal Court Sydney
outcome
|
$11.75 million in penalties for
engaging in cartel conduct.
Cartel
Thai Airways International PCL
commenced
|
28 October 2009
concluded
|
14 December 2012
jurisdiction
|
Federal Court Sydney
outcome
|
$7.5 million in penalties for
engaging in cartel conduct.
Online trading
Air Asia Berhad
commenced
concluded
jurisdiction
outcome
|
|
|
|
19 January 2012
14 December 2012
Federal Court Melbourne
$200,000 in penalties for
contravening single pricing
provisions.
CONSUMER PROTECTION
Product safety
Credence claims
Credence claims
Cotton On Kids Pty Ltd and Cotton On Clothing Pty Ltd
commenced
|
5 October 2011
concluded
|
18 December 2012
jurisdiction
|
Federal Court Melbourne
outcome
|
$1 million in relation to the supply of
unsafe children’s nightdresses and
pyjamas
Pepe’s Ducks Ltd
commenced
|
concluded
|
jurisdiction
|
outcome
|
9 July 2012
18 December 2012
Federal Court Melbourne
$375,000 plus costs for false,
misleading or deceptive conduct in
relation to its advertising of
‘open range’ duck products.
UNJ Millenium Pty Ltd & Anor
commenced
|
1 June 2012
concluded
|
3 October 2012
jurisdiction
|
Federal Court Brisbane
outcome
|
$55,000 for false misleading or
deceptive conduct in relation to its
advertising of wool and sheepskin
products.
Undertakings accepted and Infringement Notices Paid
COMPETITION AND CONSUMER ACT
“To promote vigorous lawful competition and informed markets”
ACCCount 1 October to 31 December 2012
50
s87B Undertaking Dated
Offered by
30 October 2012
Chemical Formulators Pty Ltd
22 November 2012
Nestle Australia Ltd – merger
22 November 2012
Pfizer Australia Pty Ltd – merger
18 December 2012
Oticon Australia Pty Ltd
AUSTRALIAN CONSUMER LAW
“To encourage fair trading, protection of consumers and product safety”
s87B Undertaking Dated
Offered by
15 October 2012
CNT Corp Pty Ltd
28 November 2012
Nissan Motor Co (Australia) Pty Ltd
7 December 2012
Angela Jane Delgiacco
Infringement Notices
Date Paid
Trader
Amount
11 October 2012
CNT Corp Pty Ltd
3 notices totalling $19,800
22 November 2012
Nissan Motor Co (Australia) Pty Ltd
3 notices totalling $19,800
ACCCount 1 October to 31 December 2012
51