Yesterday the Federal Court of Australia brought a win for the Australian Competition and Consumer Commission, imposing the equal-third biggest fine for cartel conduct of $18m to Colgate-Palmolive. It is a significant win for the ACCC and is part of a string of successes for ACCC in its short history.
What is the ACCC?
The ACCC is a federal government watchdog that monitors compliance with and enforces the Competition and Consumer Act 2010. It was established in 1995 under the former Trade Practices Act, with its main purposes including to:
- maintain and promote competition and remedy market failure
- protect the interests and safety of consumers and support fair trading in markets
- promote the economically efficient operation of, use of and investment in monopoly infrastructure
- increase ACCC engagement with the broad range of groups affected by ACCC’s actions.
The competition framework in Australia works on a ‘one law, multiple regulators’ model: the ACCC will tackle matters that have or might affect widespread consumer detriment, whilst the state-based bodies (such as the NSW Fair Trading) deal with individual consumer complaints.
The ACCC has a range powers at their hands to ensure compliance, including enforcement by negotiations and litigation and running compliance programs.
How successful has it been?
It’s difficult to pin a standard of ‘success’ or ‘effectiveness’ to a body that does so much and has so many different enforcement strategies. The Commission’s chair Rod Sims has countered claims of the ACCC not doing enough with supermarkets and fuel outlets by saying the very presence of the Commission acts as a deterrent for employers.
They have had high-publicity wins over the years, including the Coles ‘fresh bread’ claims, EnergyAustralia’s misleading marketing campaigns and the Coles and Woolies fuel dockets. Some of its big losses include Google for its placement of ads and to both ANZ and Flight Centre for price fixing.
The Colgate-Palmolive Case
The global consumer product conglomerate was found to have engaged in cartel conduct — that is, they had agreed with their competitors not to compete against each other so that prices could be kept artificially high. All the companies had switched to ultra-concentrate detergents, which produced savings for the company who decided not to pass on those savings onto consumers.
It all unravelled when Unilever informed the ACCC about this conduct, claiming for immunity protection under the ACCC’s policy of giving protection to companies who are the first to report cartel conduct.
What now for the ACCC and Australia?
As the Commission chair argues, the increasing number of immunity protection claims to the ACCC is an indication of its success but also of the extent of cartel activity going on in Australia. There was recently a Competition Policy Review conducted and its recommendations are being considered by the government, with a review of the Australian Consumer Law also on the horizon.
In the meantime, most of its activity and impact will continue to occur outside of court through its administrative processes, and so the Commission is our silent guardian, a watchful protector; a dark knight.
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