3 July 2019Optus customers are encouraged to check if they have received an email or SMS from Optus about a refund they may be entitled to in relation to Optus’s Direct Carrier Billing (DCB) third-party billing service.
In February 2019, following ACCC action, the Federal Court ordered Optus to pay penalties of $10 million for making false or misleading representations about charges for digital content, such as games and ringtones, that were incurred to customers through its third-party billing service. At that time, Optus also committed to contacting potentially impacted customers who complained about the services and who had not already received a refund, as well as those customers identified by Optus as having been incorrectly charged.
This was to be in addition to the $21 million Optus and various third party providers had already repaid to 240,000 customers in the years before the proceedings.
Under the refund program Optus has contacted and offered refunds to over 390,000 customers but so far only around 25 per cent of these have taken up refunds worth $6.7 million according to an update it has provided to the ACCC.
“Optus committed to providing these refunds, and will continue to contact customers over the coming months,” ACCC Commissioner Sarah Court said.
“Many of the affected customers were charged for content that they never wanted and never used, and from which they found difficult to unsubscribe. In some cases children unwittingly incurred charges.”
In addition to refunding customers, Optus has also committed to reviewing any future complaints about its DCB service and to dealing with those complaints in good faith.
The ACCC is urging Optus customers to call Optus on 133 937 if they believe they may be entitled to a refund and have not yet been contacted by Optus.
Notes for Editors
Optus’ DCB service allowed customers to purchase digital content from third-party developers that sell content outside usual app marketplaces like Google Play or the App Store. Charges were automatically applied to customers’ mobile accounts.
The DCB service was automatically enabled on Optus customer’s mobile accounts, and customers could purchase content with as little as one or two clicks on their device.
As a result of the manner in which Optus set up its DCB service many customers inadvertently or unknowingly purchased and were charged for content they did not want or use.
In the course of resolving the ACCC’s investigation, Optus has ceased offering DCB services (other than a limited number of services for one-off content for TV shows, magazines and mobile gaming, which require express customer agreement to each purchase being charged to the customer’s Optus account).
Background
In October 2018, the ACCC commenced proceedings against Optus in the Federal Court by consent.
On 6 February 2019, the Court found that Optus misled consumers and breached section 12DB(1)(b) of the Australian Securities and Investment Commission Act 2001 (Cth) by applying charges for DCB content to the accounts of customers who had unintentionally purchased DCB content without their knowledge or consent and ordered Optus pay a pecuniary penalty of $10 million and costs.
The ACCC took this action under a delegation of power from ASIC.
The ACCC has a standing delegation of certain ASIC powers and functions for the purposes of investigation and commencement and conduct of any proceedings in relation to matters involving financial products and services provided as part of, or in connection with, the supply or possible supply of telecommunications services.
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2 July 2019The ACCC has today welcomed competition commissioners and agency leaders from ASEAN countries and New Zealand for three days of meetings in Brisbane. This will be the first time many of South East Asia’s newly appointed competition commissioners will have met their regional counterparts to discuss key competition law developments in the region.
The Commissioners’ Retreat, supported by the AANZFTA Competition Law Implementation Program (CLIP), aims to provide a forum for the open and frank exchange of views and information on current competition law issues in the region, as well as how agencies and commissioners work to protect and support fair and open competition in their markets.
Participating in the retreat are commissioners and senior staff from established competition agencies in the region, including Australia and New Zealand, as well as recently appointed commissioners from the newest competition agencies in South East Asia, such as Laos, Myanmar and Thailand.
“Our region is becoming more integrated and interconnected and opportunities to step up our economic engagement are great. As competition regulators, we can also expect to be addressing common challenges,” ACCC Chair Rod Sims said.
“I am a firm believer in the importance of dialogue and cooperation to build trust and understanding. As leaders of national competition agencies, we can all benefit from sharing our experiences and expertise implementing competition laws.”
Background
The ACCC’s Competition Law Implementation Program (CLIP) delivers targeted capacity building and technical assistance to Association of South-East Asian Nations (ASEAN) Member States to help combat anti-competitive activities in individual markets and the ASEAN region.
Under CLIP, ASEAN Member States receive tailored training, mentoring and other practical support from the ACCC and other international experts to introduce and implement national competition laws to meet commitments under the ASEAN Economic Community Blueprint, ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) and the ASEAN Competition Action Plan 2025.
The ASEAN Member States are Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Brunei and Vietnam.
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1 July 2019The ACCC will be enforcing new rules that will benefit most electricity consumers by both limiting standing offer electricity prices and imposing new advertising rules on electricity providers under the new Electricity Retail Code. This code comes into force today in South East Queensland, New South Wales and South Australia.
From today, electricity retailers have various obligations under the code including:

Capping their standing offers in line with the AER’s independently set default price and moving clients on current standing offers onto the lower price
Advertising the prices and conditions on their market offers by reference to the default price so retail offers can be clearly compared.

From 1 July 2019, prices will decrease for many customers who have been paying excessively high standing offer prices. The Australian Energy Regulator (AER) has set maximum allowable prices for these standing offers and the ACCC will ensure that retailers are not charging more than they are allowed.
These standing offer prices might not be the cheapest offers in the market, but act as a price constraint for customers who are not on a market offer or for customers whose market offers have expired and who have not yet selected a new offer.
“We will ensure that the standing offer prices come down for all customers on those offers, which includes many who cannot access market offers,” ACCC Chair Rod Sims said.
“Retailers should not seek to recoup lost profits from the new cap on standing offer prices from other customers currently on cheaper market offers.”
From today, energy advertising and offers must also show electricity prices compared to a common reference price and transparently disclose all conditions attached to the offers.
Past industry practices have made it confusing for consumers to shop around, which is why these new rules were put in place.
Customers looking to compare offers or switch are encouraged to visit the AER’s independent price comparator website, Energy Made Easy, to help find a better energy deal.
“We know electricity is a big expense for many householders and we encourage all consumers regardless of what offer they are currently on to look around for a better deal, which will now be much easier to do,” Mr Sims said.
“When customers see advertisements with percentage discounts now, they will know that these discounts are off the same base. They will also know exactly how the advertised discounts will apply.”
The ACCC will be monitoring and enforcing retailers’ compliance with these new requirements.
“Retailers are well aware of these new rules, and they should have no doubt that we will enforce the rules and we will seek penalties if they do not comply,” Mr Sims said.
“We will also continue to enforce the Australian Consumer Law against any retailer engaging in misleading or deceptive conduct or making false or misleading claims or statements.”
As part of the ACCC’s electricity market monitoring inquiry, the ACCC will also be reporting on what happens to the prices and availability of cheaper market offers currently on offer, and will publish its next report by September.
“We see no reason for these current cheaper market offers to be affected if there is truly competition in the retail electricity market,” Mr Sims said.
Further information for consumers at Electricity Prices.
Background
On 17 June 2019 the ACCC released a guide for energy retailers about the Electricity Retail Code, which is a mandatory industry code under the Competition and Consumer Act (2010). The ACCC has also released an FAQ for electricity retailers.
The code implements two recommendations made in the ACCC’s Retail Electricity Pricing Inquiry.
Under the code the AER is responsible for determining the annual reference price.
On 20 August 2018, the then-treasurer, the Hon Scott Morrison MP, directed the ACCC to hold an inquiry into prices, profits and margins in relation to the supply of electricity in the National Electricity Market. The first report set out how the ACCC will monitor retail and wholesale electricity. The next report is due to be published by September.
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28 June 2019Australia’s domestic Mobile Terminating Access Service (MTAS) for mobile voice services will be regulated by the ACCC for a further five years, but regulation of the MTAS for SMS services will not continue.
The MTAS is an essential wholesale service that allows consumers on different mobile networks to make calls or send SMS to each other. It requires mobile network operators to connect or ‘terminate’ calls or SMS between their different networks.
The current regulation, or declaration, of voice and SMS MTAS expires on 30 June, 2019.
The ACCC launched a public inquiry in August 2018 examining whether this declaration should be revoked, extended or varied.
Following this inquiry, and extensive consultation, the ACCC has decided to continue the declaration of voice terminating services until 2024, but will end declaration of the SMS MTAS service on 1 January, 2020.
“When we decided to regulate wholesale SMS termination services in 2014, mobile operators were charging each other significantly above cost for these services, with a flow-on impact for retail SMS prices,” ACCC Commissioner Cristina Cifuentes said.
“We have found that this need to regulate SMS termination has disappeared over time because of increasing competition from over-the-top services like Whatsapp and iMessage, and because most mobile plans in the market now offer unlimited SMS.”
Some stakeholders expressed concerns about the impact of ending SMS MTAS regulation on app-to-person (A2P) services, which are often used by businesses to communicate special deals or sales to customers. A2P service providers suggested that, without regulation, mobile network operators would be able to charge much higher prices for termination services for A2P uses.
The ACCC considered that there were sufficient alternatives to A2P SMS to constrain wholesale SMS MTAS prices, including over-the-top messaging services, emails and in-app chat platforms.
“However, over-the-top voice services are not yet substitutes for mobile voice calls, so it is appropriate to continue declaration of MTAS for voice services,” Ms Cifuentes said.
More information on the MTAS and the ACCC’s final report is available at Mobile terminating access service declaration inquiry – 2018. 
Background
The Competition and Consumer Act 2010 requires the ACCC to review the current MTAS declaration in the 18 months before it expires on 30 June 2019.
MTAS is a wholesale service which mobile network operators offer each other so that voice calls (and SMS) originated on different networks can be connected. It is provided by a mobile network operator to connect or ‘terminate’ a call (or SMS) on its network. The network originating the call (whether fixed or mobile) pays the network receiving the call (or SMS) for the MTAS.
The originating network recovers the costs of the MTAS in the retail price it charges its customers for providing the call.
Voice MTAS has been regulated by the ACCC since 1997. Regulation of SMS MTAS was introduced in 2014. From 1 January 2020 SMS MTAS will no longer be part of the declared service and will not be regulated by the ACCC.
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28 June 2019The ACCC had alleged that in describing its products as ‘flushable’ on product packaging and its website, Kimberly-Clark had misled consumers about the suitability of its wipes to be flushed down the toilet.
“We argued that Kimberly-Clark’s wipes did not break apart quickly once flushed and therefore should not have been considered ‘flushable’,” ACCC Chair Rod Sims said.
However, the Court found that Kimberly-Clark’s claims were not false or misleading.
The Court ruled there was insufficient evidence to show that Kleenex Cottonelle ‘flushable’ wipes in this case, as opposed to ‘wipes’ products more broadly, had contributed to the problems in municipal sewerage systems. 
The Court also found that it was reasonable for Kimberly-Clark to rely on guidelines, developed largely by nonwovens industry associations, to substantiate its ‘flushable’ claims.  The ACCC had argued these guidelines were not an independent testing regime, as they were developed by the manufacturers of ‘flushable’ labelled products, without substantial input from wastewater authorities.
The Court noted that Kimberly-Clark did not expect its wipes to fully disperse in the sewerage system and that Kimberly Clark’s wipes had inferior properties of breakdown and dispersion than toilet paper. The Court noted  this was consistent with a conclusion the wipes posed a risk of harm to the sewerage system but there was insufficient evidence this harm actually occurred, except in limited circumstances.
“The ACCC took this action because it was concerned that consumers were being misled about the very nature of the product they were buying,” Mr Sims said.
“We also took this case because we are aware of increasing problems reported by Australian water authorities as a result of non-suitable products being flushed down the toilet and contributing to blockages and other operational issues.”
“The ACCC is carefully considering the Court’s decision,” Mr Sims said.
While the Court dismissed the ACCC’s case in relation to the suitability of Kimberly-Clark’s wipes to be flushed, the Court did find Kimberly-Clark made a false representation when it claimed its wipes were made in Australia, in breach of the Australian Consumer Law. In fact, Kimberly-Clark’s Kleenex Cottonelle range of wipes were variously made in Germany, South Korea and the UK.
“Kimberly-Clark misled consumers into thinking they were purchasing an Australian product when this was not the case,” Mr Sims said.
“Business must not mislead consumers about where their products are made, or they risk facing court penalties.”
A hearing on relief in relation to Kimberly-Clark’s ‘made in Australia’ claims will be held at a later date.
Background
The ACCC instituted proceedings against Kimberly-Clark and separately against Pental Limited and Pental Products Pty Ltd (together, Pental) in December 2016. 
In April 2018, the Federal Court ordered Pental to pay $700k for making false and misleading representations about its range of White King ‘flushable’ bathroom cleaning wipes after Pental admitted its flushable representations were false and misleading.
The following Kimberly-Clark products were the subject of these proceedings:

Kleenex Cottonelle Flushable Cleansing Cloths – Sensitive, 42 wipes pack;
Kleenex Cottonelle Flushable Cleansing Cloths – Sensitive (Out & About), 3×10 wipes packs;
Kleenex Cottonelle Flushable Cleansing Cloths – Cotton Fresh, 42 wipes pack; and
Kleenex Cottonelle Flushable Cleansing Cloths – Kids, 42 wipes pack.

The products in this case have since been discontinued, and replaced with a different range of ‘flushable’ wipes.
Product Images: 

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27 June 2019The ACCC has lodged an appeal against the Federal Court’s decision to dismiss the ACCC’s proceedings in relation to Pacific National’s acquisition of Aurizon’s (ASX: AZJ) Acacia Ridge Terminal.
In July 2018, the ACCC brought proceedings alleging that Pacific National’s acquisition of the Acacia Ridge Terminal in Brisbane would substantially lessen competition by raising the barriers to entry for potential new rail operators.
In May this year, the Federal Court indicated that, if an undertaking had not been offered, it would have found that the acquisition was likely to substantially lessen competition.
However, the Court concluded the competition issues would be resolved by an access undertaking offered unconditionally by Pacific National on the final afternoon of the hearing.
“Our appeal will focus on the ability of courts to accept undertakings in these circumstances,” ACCC Chair Rod Sims said.
“Among other things, we will argue that the Court made an error by accepting the undertaking, and then using it as a relevant fact when determining whether there was likely to be a substantial lessening of competition.”
“This appeal is crucial to Australia’s merger regime because acceptance of undertakings of this kind by the Court means that anti-competitive mergers could be approved, and this has the potential to damage the Australian economy,” Mr Sims said.
“The ACCC, along with competition regulators around the world, has concerns about the ability of access undertakings to resolve competition issues arising from a merger.”
“In this case, the ACCC remains concerned that if Pacific National is allowed to acquire the Acacia Ridge Terminal, it will have the ability and incentive to discriminate against competitors. There are many subtle ways in which it could disadvantage a competitor in their day-to-day operations, regardless of any commitments it makes in an undertaking,” Mr Sims said.
“Potential new entrants will be well aware of this risk, and, in our opinion, this may mean companies are less likely to enter what is already a highly concentrated market. This is the primary reason we rejected a similar undertaking offered by Pacific National during our merger review.”
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27 June 2019The ACCC has instituted proceedings in the Federal Court against Optus Internet Pty Limited and Optus Mobile Pty Limited (Optus), alleging Optus misled consumers about the need to move to the NBN or risk being disconnected.
On 24 May 2018, Optus sent an email offering its NBN broadband services to 138,988 of its mobile customers, and advising them that their broadband service would be ‘disconnected very soon’ and encouraging them to ‘make the switch, before it’s too late.’
The ACCC alleges this was a false or misleading claim because, when the email was sent, Optus understood the recipients of the email were already being supplied with NBN-based services by a company other than Optus, and Optus did not have any reasonable basis for asserting they would be disconnected.
On 22 May 2018, following ACCC action, the Federal Court ordered Optus pay penalties of $1.5 million for making misleading representations to customers about their transition from Optus’ HFC network to the NBN.
“Moving to the NBN is an important decision for consumers, and it can also be a confusing process,” ACCC Commissioner Sarah Court said.
“The ACCC has had to take action about Optus’ advertising on several previous occasions, and it is concerning that we are again having to take them to court for alleged misleading statements about this issue,” Ms Court said.
“We are keeping a close eye on this sector and we will continue to take enforcement action where appropriate.”
The ACCC is seeking declarations, injunctions, pecuniary penalties, compliance orders and costs.
Background
Optus Internet Pty Limited is Australia’s third largest provider of NBN services by market share. The NBN is a wholesale-only broadband access network, being built and owned by NBN Co Ltd.
When the NBN becomes available in a residential area, consumers normally have 18 months to make a choice about moving to the NBN. After the 18 month period, broadband services using pre-NBN infrastructure are, in most cases, disconnected. A retail internet service provider like Optus may inform consumers about the possibility of disconnection towards the end of the 18 month period. However, once NBN services are connected, consumers are no longer at risk of disconnection as a result of the rollout of the NBN.
In March 2012, the Federal Court ordered Optus to pay $3.6 million in penalties in relation to the advertising of its broadband plans.
In June 2017, the ACCC accepted an undertaking from Optus to compensate consumers after an ACCC investigation into concerns that Optus was providing less data than advertised to consumers. The undertaking related to three separate incidents in 2015 and 2016.
In December 2017, Optus agreed to compensate more than 8700 customers who were misled about maximum speeds they could achieve on certain Optus NBN plans.
In May 2018, the Federal Court ordered Optus pay penalties of $1.5 million for making misleading representations to customers about their transition from Optus’ HFC network to the NBN.
Concise Statement
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26 June 2019The Federal Court has ordered Birubi Art Pty Ltd (in liquidation) to pay $2.3 million for making false or misleading representations about products it sold in breach of the Australian Consumer Law.
In October 2018, following action by the ACCC, the Federal Court found that Birubi falsely claimed that products it sold were hand painted by Australian Aboriginal persons and made in Australia when that was not true.
Birubi supplied almost 50,000 boomerangs, bullroarers, didgeridoos and message stones to retail outlets across Australia between July 2015 and November 2017.
These products featured images, symbols and designs associated with Australian Aboriginal art and words such as ‘Authentic Aboriginal Art’, ‘Hand Painted’, and ‘Australia’, but were all made in Indonesia. 
“This penalty sends a strong message to anyone considering selling fake Australian Aboriginal style art as the genuine article,” ACCC Commissioner Sarah Court said.  
The Court noted the importance of the deterrent effect of the penalty imposed not only in relation to economic harms impacting Indigenous Australians, but also the social and cultural harms which may flow from businesses misrepresenting the provenance of Indigenous art and artefacts.
“Birubi’s actions were extremely serious. Not only did they mislead consumers, they were liable to cause offence and distress to Australian Aboriginal people,” Ms Court said.
“Engagement in the Indigenous Australian art industry is extremely important to a significant number of Australian Aboriginal people, especially those in remote regions.”
“The ACCC took this action because the misleading conduct has the potential to undermine the integrity of the industry and reduce opportunities for Australian Aboriginal peoples,” Ms Court said.
“The ACCC will be monitoring traders of Indigenous Australian style art and souvenirs to ensure confidence in the Indigenous Australian art industry. We will take action against those who mislead consumers about the nature of their products.”
The Court also ordered Birubi to pay costs.
Background:
Birubi was a wholesaler of Australian souvenir and Australiana products based in Kippa-Ring, Queensland. Birubi is currently in voluntary liquidation.
The ACCC instituted proceedings against Birubi Art Pty Ltd in March 2018.
The proceedings form part of the ACCC’s work addressing conduct impacting Indigenous Australians, which is an enduring priority for the ACCC.
Samples of artwork sold by Birubi are below:

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25 June 2019A trader in apples, pears and other fresh fruits has agreed to change its horticulture produce agreements with growers after the ACCC raised concerns the agreements contained unfair contract terms, and terms which did not comply with the Horticulture Code of Conduct.
M.V Napoleone & Co Pty Ltd, trading as Red Rich Fruits, has agreed to amend a term in its standard form horticulture produce agreement considered by the ACCC to likely be an unfair contract term under the Australian Consumer Law.
The term allowed Red Rich Fruits to seek credit from a grower for produce Red Rich Fruits had on-sold to a third party, but which was then rejected by the third party. The grower was required to provide credit for the amount the third party had contracted to pay Red Rich Fruits for the rejected produce, which was likely to include the trader’s profit margin.
Other terms were also amended in response to ACCC concerns about compliance with the Horticulture Code of Conduct. These included pricing and payment clauses that may have breached the Code’s pricing formula and payment transparency terms.
The ACCC is currently auditing traders’ compliance with the Horticulture Code of Conduct and examining whether other operators’ agreements contain similar terms.
The horticulture produce agreement used by Red Rich Fruits was prepared by a horticulture trader industry group, which distributed this agreement to its members for their use.
“We are concerned that there may be more widespread non-compliance in this industry, and believe other traders may be using similar agreements in their dealings with growers,” ACCC Deputy Chair Mick Keogh said.
“Traders must check that their agreements do not contain unfair contract terms, and that they comply with the Code, which is mandatory for industry participants.”
“We urge traders and their representatives to review horticulture produce agreements to ensure they do not contain non-compliant terms,” Mr Keogh said.
“The ACCC will continue to audit agreements and will take enforcement action where appropriate.”
More information can be found at Horticulture Code of Conduct.
Background
The Horticulture Code is a mandatory industry code prescribed under the Competition and Consumer Act 2010. It came into full effect on 1 April 2018 and replaced the old Horticulture Code. The Horticulture Code’s purpose is to improve the clarity and transparency of trading arrangements between growers and wholesalers trading in horticultural produce.
The Horticulture Code prohibits growers and wholesalers from trading in horticulture produce without a written agreement that complies with the requirements of the Horticulture Code. Traders are exposed to penalties of up to $63,000 for each instance of trading without a Horticulture Code compliant agreement.
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24 June 2019The ACCC has preliminary concerns about AP Eagers’ (ASX: APE) proposed acquisition of the shares in Automotive Holdings Group (AHG) (ASX: AHG) that it does not already own, and its impact on competition in new car retailing in the Newcastle/Hunter Valley region of New South Wales.
The ACCC is currently assessing an application for merger authorisation from automotive retailer AP Eagers.
“The ACCC is seeking further feedback from market participants about this proposed transaction, in particular regarding the Newcastle/Hunter Valley region,” ACCC Acting Chair Delia Rickard said.
“A combined AP Eagers and AHG would operate 46 per cent of new car dealership sites in the Newcastle/Hunter Valley region, including those for the ten most popular brands, and runs 54 per cent of the dealership sites selling those brands. In metropolitan Newcastle alone, the combined company would operate 77 per cent of dealership sites selling the ten most popular brands.”
“We believe that local consumers generally don’t travel beyond the Newcastle/Hunter Valley region to buy new cars, and it is difficult to find out the final price for a car without visiting a dealership,” Ms Rickard said.
On 24 June the ACCC issued a market feedback letter setting out the ACCC’s preliminary views and summarising submissions received by then.
The ACCC’s preliminary view is that the proposed acquisition is unlikely to substantially lessen competition for the supply of new cars in Melbourne, Sydney and Brisbane or nationally, the wholesaling and retailing of used cars, the acquisition of car dealerships or the supply and acquisition of finance and insurance products.
“We are now seeking further submissions in response to the concerns outlined in our market feedback letter, and will continue to examine what effect this level of concentration would have on the size of discounts customers could obtain when buying new cars in the Newcastle/Hunter Valley region,” Ms Rickard said.
The ACCC is also investigating whether the proposed acquisition would reduce competition in the supply of authorised parts and the market for servicing of new cars in the Newcastle/Hunter Valley region. It is also seeking submissions about whether a divestiture would address potential competition issues in the Newcastle/Hunter Valley region.  
Submissions from interested parties should be provided by no later than 3 July 2019. The ACCC must make a final decision by 26 July 2019, unless AP Eagers agrees to extend this period.
Further information, including a copy of the application for merger authorisation and submissions received by the ACCC, is available at AP Eagers Limited proposed acquisition of Automotive Holdings Group Limited.
Background
AP Eagers and AHG are the two largest automotive retailers in Australia. AP Eagers and AHG supply new and used cars, trucks and buses, as well as associated products and services such as car repair and servicing, authorised car parts, insurance and finance. Their operations overlap in Brisbane, Melbourne, Sydney and the Newcastle/Hunter Valley region of New South Wales. AP Eagers is the largest shareholder of AHG, holding 28.84 per cent of AHG’s listed securities as at 5 April 2019.
AP Eagers’ application is the first to use the merger authorisation process introduced in 2017 in reforms to the Competition and Consumer Act (2010) which restored the ACCC’s ability to consider applications for merger authorisation. Under the reforms, the authorisation application comes to the ACCC first rather than to the Australian Competition Tribunal.
Merger authorisation provides an alternative to the informal merger review process, which is the most common avenue merger parties use to seek the ACCC’s views on a proposed acquisition.
Under the new merger authorisation process, the ACCC may grant authorisation for a proposed merger if it is satisfied the merger is not likely to substantially lessen competition, or where the public benefits outweigh the detriments to the public (including where the proposed merger does lessen competition).
AP Eagers is seeking authorisation on the basis that the proposed acquisition does not substantially lessen competition (consistent with the first limb of the authorisation test).
The authorisation process must follow formal steps set out in the Competition and Consumer Act, including that the ACCC must make a determination on the application within 90 days, unless the applicant agrees to extend the timeline. The process is public and transparent.
The ACCC has included Cessnock, Maitland/Rutherford and Singleton in the Newcastle/Hunter Valley region of New South Wales.

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24 June 2019Hotter and drier-than-average weather led to reduced water availability and higher prices for tradeable water products in 2017–18, placing pressure on water users in the Murray–Darling Basin, the ACCC’s ninth annual Water Monitoring Report has found.
Despite this, the ACCC found that 2017–18 was a relatively stable year for major water infrastructure operators, with relatively minor changes in hypothetical (or average) bills for irrigators in the majority of networks.
The ACCC is required under the Water Act 2007 to monitor regulated water charges, transformations and terminations, and compliance with the water charge and water market rules by monopoly water infrastructure operators that service water users including irrigators in the Murray–Darling Basin (MDB).
Most hypothetical bills calculated by the ACCC for Basin water infrastructure operators did not change much from 2016–17. Overall, on-river hypothetical bills rose slightly above the rate of inflation, while off-river bills rose by an average of about 5 per cent in pressurised networks and 1 per cent in gravity fed networks (both in nominal terms).
The report found that, within water infrastructure operators’ networks, the volume of water delivery rights traded increased by 10 per cent during the year, partly due to large trades within the Murrumbidgee Irrigation and Jemalong networks, while trade of temporary allocations of water rights declined by 20 per cent.
“Water markets in the Murray–Darling Basin have developed significantly since 2007, and despite variation in trade volumes between years, we are seeing water users access markets to manage risk in a variety of ways,” ACCC Deputy Chair Mick Keogh said.
Irrigators and other water holders used water ‘carried over’ from previous years, helping to offset lower water allocations during 2017-18. As a result, water infrastructure operators increased the total water delivered to water users during the financial year, by 18 per cent for off-river infrastructure operators, and by 9 per cent for on-river infrastructure operators.
“Carryover and water markets more generally are aimed at helping water market participants to manage water risk year-to-year, and this is what we saw happening during 2017–18,” Mr Keogh said.
Prices for tradeable water products rose significantly, with the southern connected MDB experiencing record prices for most water entitlement types in 2017–18, underpinned by strong commodity prices and expanded growing area for crops in the Murrumbidgee and Murray regions.
“However, the ACCC continues to have some broad concerns over the reliability of publicly available water trading data,” Mr Keogh said.
The report found that while the number of applications for ‘transformation’ of irrigation rights into water access entitlements increased from 2016–17 (up 32 per cent), the total volume of transformations and ‘terminations’ both dropped to record lows in 2017–18. ‘Transformation’ is the process whereby a customer transforms their irrigation right held against a water infrastructure operator into a water access entitlement that they can individually manage or trade.
“A significant proportion of irrigation rights remain untransformed. This may indicate that water users are hesitant to incur transformation and trade approval fees, or commit the additional time required to manage their own water access entitlements,” Mr Keogh said.
“Given the cumulative volume of transformations is much greater than that of terminations, we know that some irrigators have transformed their irrigation rights but not terminated their water delivery rights to the same extent. These irrigators may have planned to continue irrigating while participating in water trading.”
Compliance with the water charge rules and water market rules by water infrastructure operators was generally good in 2017–18. There was a rise in complaints year-on-year, from 10 to 14, but the number of complaints remained significantly lower than its peak of more than 70 in 2011–12.
“In 2017–18, MDB policy and its governance framework were subject to multiple reviews and public debate. Further policy and governance changes have been foreshadowed,” Mr Keogh said.
“Following the Minister’s announcement amending the water charge rules, we have been developing guidance materials to help stakeholders understand the changes and the transitional arrangements. We will work with interested stakeholders and publish guidance materials before the rule changes come into effect on 1 July 2020.”
The report can be viewed at ACCC water monitoring report 2017-18.
Notes to editors
The ACCC’s water monitoring report uses a range of sources to assess the state of the water market and trends in regulated water charges. These include data collected directly from water infrastructure operators and Basin states, as well as information from reports and other content published by government agencies, academia and industry.
The ACCC uses ‘hypothetical bills’ to estimate annual charges for end water users, such as irrigators, for specified volumes of irrigation right and water delivery scenarios.
‘Carryover’ is an arrangement that allows irrigators and other water entitlement holders to not use some of their allocated water during a water year, instead holding that allocated water in storages so it is available in subsequent years.
Irrigators may hold their own water access entitlements, or hold a right to water as a share of the bulk water entitlement held by a water infrastructure operator (such as Murray Irrigation or Murrumbidgee Irrigation) which services a number of farmers. If an irrigator who has a right to water within a water infrastructure operator’s network wishes to trade that water to someone who is outside that network, a number of processes are involved, starting with ‘transformation’.
‘Transformation’ is the process whereby a customer (usually an irrigator) transforms their irrigation right held against a water infrastructure operator into an individually-owned water access entitlement. Transformation can give an irrigator more control and flexibility over their water rights, especially in relation to external trade, but may come with additional costs. Transformation arrangements are regulated by the Water Market Rules 2009. Following transformation, the customer can trade the water held under their water access entitlement temporarily or permanently.
‘Termination’ is the process when a customer partially or fully reduces their right of access to a water infrastructure operator’s irrigation network, usually represented by their ‘water delivery right’. Irrigators may be required to pay a termination fee when terminating, to contribute towards ongoing unavoidable costs of maintaining the network. The maximum amount of termination fees is regulated by the Water Charge (Termination Fees) Rules 2010.
The ‘water charge rules’ collectively refer to the Water Charge (Infrastructure) Rules 2010, the Water Charge (Termination Fees) Rules 2009 and the Water Charge (Planning and Management Information) Rules 2010.

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21 June 2019Around 120 Australians have died as a result of do it yourself (DIY) car maintenance accidents since 2000, while many hundreds have been hospitalised due to injuries, and the ACCC is warning consumers to take extra care when repairing their vehicles.
The ACCC has developed a safety campaign which includes a video explaining the correct procedure for common DIY car maintenance tasks to help raise awareness about the associated dangers.
“Tragically, many people, including some experienced mechanics, have been crushed and killed while working under their car,” ACCC Deputy Chair Mick Keogh said.   
Most of the fatalities were men and involved the vehicle being lifted or supported in the wrong way. Most victims were aged 40 to 49.
“We’ve created this video to help people understand and avoid the common unsafe practices with DIY repairs to help reduce the likelihood of an accident.”
Research shows most fatalities happen when the victims are working under a vehicle and using equipment incorrectly, with many of the fatalities involving the use of vehicle jacks. 
“We want to get the message out that people should never get under a vehicle supported only by a jack, they should always use support stands or ramps, and chocks,” Mr Keogh said. 
Many of the DIY activities also involved fuel tanks or fuel lines and the use of power tools, increasing the potential risks.
Common unsafe DIY practices that can lead to accidents can include:

Performing vehicle maintenance on unsteady ground, sand or a sloped surface;
Using makeshift support stands such as wood or bricks;
Not applying the handbrake and not putting the vehicle in gear or in park;
Failing to “chock” the wheels on a raised vehicle;
Incorrectly using a vehicle jack or using a jack with a known fault.

Additionally, while some people may have applied safeguards such as applying the handbrake, the work they are doing while underneath the car may disengage the handbrake, leading to potential accidents. 
“This is why it’s so important to have multiple levels of safety controls in place.”
The ACCC has also spoken with Robinette Emonson, whose husband died after being crushed by his car while working in his garage.
“Despite suffering this tragic loss, Robinette has shared her story to help raise awareness, and share an important message with others,” Mr Keogh said.
To watch these videos, go to our website.
More information about safe vehicle maintenance is available at productsafety.gov.au/DIYCarSafety.
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Product Safety

18 June 2019Energy retailers in South East Queensland, New South Wales and South Australia must comply with obligations under a new Electricity Retail Code from July 1 this year, including by advertising electricity plans in a way that makes it easier for consumers to compare prices and offers.
A new ACCC guide released today details how retailers in these regions should apply the new code in relation to their customers.
The Code introduces a cap on ‘standing offer’ prices that are often excessively high, to automatically bring down the cost of electricity to customers on these offers, many of whom cannot or do not access alternative market offers. The cap will be set annually by the Australian Energy Regulator (AER).
The Code also mandates that any prices and discounts must be calculated and advertised against an independently set benchmark known as the ‘reference price’, meaning 20 per cent off with one retailer is also 20 per cent off the same price as another retailer in the same region.
It also bans conditional headline discounting, meaning that conditional discounts must not be the most conspicuous price advertised, and requires all conditions to be clearly stated.
“These new rules, based on recommendations by the ACCC, increase transparency in advertising of electricity offers, and put consumers in a stronger position by enabling them to trust retailers’ advertised discounts and find a better deal,” ACCC Commissioner Cristina Cifuentes said.
“Current discounting practices confuse consumers and large discounts off inflated standing offers do not always result in lower electricity prices for consumers,” Ms Cifuentes said.
The ACCC’s March 2019 report found prices and bills have been increasing despite a steady rise in advertised discounts. This is because retailers generally advertise discounts from their own standing offer rates, making it difficult for consumers to compare offers.
In addition, retailers often advertise large conditional discounts and many consumers end up paying a much higher price when those conditions are not met. These ‘penalties’ provide an excessive benefit to retailers.
“I urge consumers to review their electricity deals after 1 July, and to shop around for the best deal,” Ms Cifuentes said. 
The ACCC guide explains:   

which retail electricity offers are covered by the code
how the cap on standing offer prices works
how price and discounts must be compared to the benchmark (or ‘reference price’)
other regulatory requirements that operate concurrently with the code
the consequences of non-compliance with the code.

The ACCC will enforce the code and monitor compliance.
As part of its ongoing monitoring of electricity prices, the ACCC will report on the effects of the code on the retail market and whether consumers are generally receiving a better deal.
For further information see: Electricity Retail Code.
Consumers are encouraged to visit the AER’s independent price comparator website, Energy Made Easy, to help find a better energy deal.
Background
On 20 August 2018, the then-Treasurer, the Hon Scott Morrison MP, directed the ACCC to hold an inquiry into prices, profits and margins in relation to the supply of electricity in the National Electricity Market.
The current inquiry follows the ACCC’s Retail Electricity Pricing Inquiry June 2018 report into the supply of retail electricity and the competitiveness of retail electricity prices in the National Electricity Market which contained 56 recommendations. This included that:

standing offers should be replaced with a default offer set by the AER (Recommendations 30 and 49)
all advertised headline discounts must be guaranteed discounts, and be calculated against a reference bill set by the AER (Recommendations 32 and 50)

The Australian Government announced in August 2018 that it would introduce a Default Market Offer. The Council of Australian Governments Energy Council agreed to adopt a reference bill. These were implemented through a mandatory industry code under the Competition and Consumer Act 2010.
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18 June 2019The ACCC has instituted proceedings against franchisor Jump Loops Pty Ltd and its parent company Swim Loops Holdings Pty Ltd (collectively Jump Swim) in the Federal Court, alleging that it made false, misleading or deceptive statements about Jump Swim School franchises, in breach of the Australian Consumer Law. 
The ACCC alleges Jump Swim made representations in its promotional material that a prospective Jump Swim School franchisee would have an operational swim school within 12 months of signing a franchise agreement, when it did not have reasonable grounds for making that statement.
Many franchisees were not provided with an operational swim school within this period and in some cases it was not provided at all.
There are over 90 Jump Swim franchisees who did not receive an operational swim school within 12 months or at all. The initial costs of setting up a Jump Swim School generally ranged from approximately $150,000 to $175,000.
“Franchisors need to take their obligations under the Australian Consumer Law seriously. Purchasing a franchise is a big decision, and people looking to open a franchise business rely on the information from the franchisor being accurate,” ACCC Chair Mick Keogh said.
“We allege this conduct caused substantial harm to franchisees who paid significant sums but did not receive an operational swim school within the time specified, or at all.”
The ACCC is also taking action against Jump Swim’s director, Mr Ian Michael Campbell, alleging he was involved in the conduct.
Additionally, the ACCC alleges that the franchisor Jump Loops Pty Ltd wrongfully accepted payment from franchisees where it failed to supply an operational franchise within the 12 month period specified, or alternatively, within a reasonable time. The ACCC alleges that Swim Loops Holdings Pty Ltd and Mr Campbell were involved in the conduct.
“Jump Swim continued to accept payments when it knew, or ought to have known at the time it accepted the payments, that the timing for its delivery of operational franchises was dependent on events that were outside its control,” Mr Keogh said. 
Each Jump Swim School required development and building approvals from council, and in many instances, it was taking longer than 12 months to provide franchisees with operational swim schools.
The ACCC is seeking injunctions, declarations, pecuniary penalties, redress for franchisees, disqualification orders, an order as to findings of fact, and costs.
Background

Jump Loops Pty Ltd is an Australian-based franchisor that sells franchises to those wishing to operate their own Jump Swim School to supply learn-to-swim services. 
Before starting this court action, on 7 June 2019, the ACCC obtained a Federal Court order freezing the assets of Jump Swim and Mr Campbell and requiring them to disclose details of their financial position. If the ACCC is ultimately successful in its case against Jump Swim and Mr Campbell, it intends to apply to the Court for any preserved funds (if available) to be used to compensate Jump Swim School franchisees affected by the alleged conduct. A hearing on the freezing order application is listed for 20 June 2019. 

The attached document below contains the ACCC’s initiating court documents in relation to this matter. We will not be uploading further documents in the event these initial documents are subsequently amended.
Concise statement
ACCC v Campbell_Concise Statement
(

PDF 836.55 KB
)

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17 June 2019Australians are losing more money to NBN scams, with reported losses in 2019 already higher than the total of last year’s losses.
Consumers lost an average of more than $110,000 each month between January and May this year, compared with around $38,500 in monthly average losses throughout 2018 – an increase of nearly 300 per cent.  
“People aged over 65 are particularly vulnerable, making the most reports and losing more than $330,000 this year. That’s more than 60 per cent of the current losses,” ACCC Acting Chair Delia Rickard said.
“Scammers are increasingly using trusted brands like ‘NBN’ to trick unsuspecting consumers into parting with their money or personal information.”
Common types of NBN scams include:

Someone pretending to be from NBN Co or an internet provider calls a victim and claims there is a problem with their phone or internet connection, which requires remote access to fix. The scammer can then install malware or steal valuable personal information, including banking details.
Scammers pretending to be the NBN attempting to sell NBN services, often at a discount, or equipment to you over the phone.
Scammers may also call or visit people at their homes to sign them up to the NBN, get them a better deal or test the speed of their connection. They may ask people to provide personal details such as their name, address, date of birth, and Medicare number or ask for payment through gift cards.
Scammers calling you during a blackout offering you the ability to stay connected during a blackout for an extra fee.

It is important to remember NBN Co is a wholesale-only company and does not sell services directly to consumers.
“We will never make unsolicited calls or door knock to sell broadband services to the public. People need to contact their preferred phone and internet service provider to make the switch,” NBN Co Chief Security Officer Darren Kane said. 
“We will never request remote access to a resident’s computer and we will never make unsolicited requests for payment or financial information.”
“If someone claiming to work ‘for the NBN’ tries to sell you an internet or phone service and you are unsure, ask for their details, hang up, and call your service provider to check if they’re legitimate. Do a Google search or check the phone book to get your service provider’s number, don’t use contact details provided by the sales person,” Ms Rickard said.
“Never give an unsolicited caller remote access to your computer, and never give out your personal, credit card or online account details to anyone you don’t know – in person or over the phone – unless you made the contact.”
“It’s also important to know that NBN does not make automated calls to tell you that you will be disconnected. If you get a call like this just hang up.”
“If you think a scammer has gained access to your personal information, such as bank account details, contact your financial institution immediately.”
More information about NBN scams is available online at: nbnco.com.au/scamadvice.
People can also report a scam to the ACCC via Scamwatch.
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14 June 2019The ACCC has issued a final notice revoking a resale price maintenance (RPM) notification lodged by Meredith Dairy, which would have prevented retailers selling its goat cheese products below a price set by Meredith Dairy.
Meredith Dairy had raised concerns that smaller retailers promoting its products at low prices to compete with major supermarket chains had led to demands from other retailers for lower wholesale prices.
The ACCC considered Meredith Dairy’s position, but decided that the reduction in retail competition resulting from the proposal would not be outweighed by any public benefit.
“In our view, the proposed conduct would have led to consumers paying higher prices for Meredith Dairy’s goat cheeses, and would have limited the ability of delicatessens and other small retailers to compete with big chains,” ACCC Deputy Chair Mick Keogh said.
“In turn, it would have meant less competitive pressure on major supermarket chains to offer low prices.”
The ACCC issued a draft notice proposing to revoke Meredith Dairy’s notification on 1 May 2019, and sought views on this proposal.
Meredith Dairy chose not to make a submission in response.
“We believe that consumers are best served when retailers are free to set their own prices in a competitive market,” Mr Keogh said.
Further information, including a copy of the notice issued by the ACCC, is available on the ACCC’s Public Register at Meredith Dairy Pty Ltd
Background
It is illegal for a supplier to attempt to set a minimum price for their products or services. This practice is known as resale price maintenance (RPM). However, a supplier may recommend that resellers charge an appropriate price for particular goods or services.
A supplier may also withhold the supply of goods when a retailer has sold the goods at below-cost prices for the purpose of attracting customers (loss-leader selling), even where such conduct is not unlawful.
Meredith Dairy did not consider this to be a viable option for it, believing it would be too difficult to establish that loss-leader selling was occurring. 
Instead, Meredith Dairy proposed to set a minimum price for its products that would apply to all retailers, without it having to establish that loss-leader selling was occurring.
Businesses may obtain legal protection for RPM conduct by lodging a notification with the ACCC.
Once lodged, protection for the notified RPM conduct begins automatically 14 calendar days after the notification was lodged, unless the ACCC issues a draft notice objecting to the notification within those 14 days.
In this case the ACCC issued a draft notice within 14 days preventing Meredith Dairy from engaging in the notified RPM conduct while the ACCC further considered its application.
As the ACCC’s final decision affirms the draft notice, Meredith Dairy cannot engage in the notified RPM conduct.    
The ACCC may revoke an RPM notification where it is satisfied that the likely benefit to the public from the conduct will not outweigh the likely detriment to the public from the conduct.
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13 June 2019The ACCC has released a statement of issues raising preliminary competition concerns about Nutrien’s proposed acquisition of Ruralco (ASX: RHL).
Nutrien operates in Australia through its wholly owned subsidiary, Landmark. Landmark and Ruralco supply rural merchandise such as fertiliser, fencing and animal health products and other services through their branded retail store networks.
Both companies also have wholesale businesses supplying rural merchandise to independent stores.
“A merged Landmark-Ruralco would be by far the largest retail and wholesale supplier of rural merchandise in Australia, with Elders the only other large national chain,” ACCC Deputy Chair Mick Keogh said.
“The combined entity would supply around 650 rural merchandise stores (including both corporate and member stores), which is approximately 45 per cent of all rural merchandise stores nationally.”  
“We are seeking submissions in response to our statement of issues, and will continue examining what impact the loss of a major national retail competitor might have on prices, product range (including private label brands) and other areas of competition,” Mr Keogh said.
The ACCC has identified a number of local areas, including Broome (WA), Alice Springs (NT), Cooma (NSW) and Hughenden (Qld), where Landmark’s rural merchandise stores compete with Ruralco stores and there would be few remaining competitors.
The ACCC is considering whether delivery from outside these regions would provide sufficient competition to the Ruralco-Landmark retail stores.
Ruralco is a major wholesaler to independent rural merchandise stores through its CRT operation, and Landmark also has a smaller wholesale operation.
The ACCC is considering whether the proposed acquisition would reduce competition at the wholesale level, or whether the remaining wholesalers or buying groups (AIRR, NRI and AgLink) will provide sufficient competition.
In addition, the ACCC is examining whether a merged Landmark-Ruralco would be more likely to discriminate against retailers which are wholesale customers that compete with its retail stores.
The ACCC’s review has also considered overlaps between Landmark and Ruralco in the supply of wool broking, livestock agency and live export, insurance broking, financial services and real estate agency services. The ACCC’s preliminary view is that the proposed deal is unlikely to substantially lessen competition in these areas.
Submissions from interested parties on the statement of issues should be provided by 27 June 2019. The ACCC’s final decision is scheduled for 15 August 2019.
The statement of issues is available at Landmark – proposed acquisition of Ruralco.
Background
Landmark supplies rural merchandise through its 225 retail stores across the country as well as supplying independent stores on a wholesale basis. Landmark also provides wool broking, livestock agency and export services, real estate agency and agricultural insurance broking services. The Landmark brand has existed in Australia for more than 150 years.
Ruralco is a publicly listed company in Australia, formed in 2006 when Combined Rural Traders (CRT) and Roberts Limited merged. Ruralco, however, has been operating (through predecessor organisations) for over 150 years.
Ruralco provides a very similar range of services to Landmark: It operates 106 rural merchandise stores nationally (operating under a number of brands but notably Roberts and Rodwells) and also supplies member stores via its wholesale arm, CRT. These members may be branded as either CRT or Town & Country. In addition to those other services offered by Landmark, Ruralco also offers water broking services.
Rural merchandise is an umbrella term for the various agricultural products purchased by farmers for use in operating a farm and includes: fertiliser, agricultural chemicals, seed, fencing, animal health products and other miscellaneous merchandise. Some rural merchandise stores also offer agronomic advice.
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Mergers

13 June 2019The ACCC will not oppose the proposed acquisition of Steelforce Holdings Pty Ltd (Steelforce) by GFG Alliance Australia (Liberty).
Liberty and Steelforce both manufacture and distribute long steel products, which are used for construction and industrial purposes.
The ACCC’s review focused on the wholesale supply and distribution of three types of long steel products: hollows, structurals and merchant bars.
“The ACCC looked closely at this proposed acquisition. We decided not to oppose it because we considered that imported products and rival distributors will continue to provide strong competition,” ACCC Deputy Chair Mick Keogh said.
The proposed acquisition would combine Steelforce’s hollows manufacturing mill in Dalian, China, with Liberty’s existing long steel manufacturing assets.
“Imports have made up more than 25 per cent of the total wholesale supply of hollows in Australia for many years. In addition, imported long steel products which meet Australian specifications are also readily available,” Mr Keogh said.
“In relation to the market for the wholesale supply of hollows, we believe Liberty’s position will be constrained not just by competition from imports, but also by Bluescope’s domestic manufacturing.”
The proposed acquisition would also combine Steelforce’s long steel distribution business, which operates in Queensland, New South Wales, Victoria and Western Australia, with Liberty’s existing distribution business, Liberty Metalcentre.
“The proposed acquisition will make Liberty the largest distributor of long steel products in Australia, with a substantial market share. However, in each state, Liberty will continue to face competition from other distributors,” Mr Keogh said.
“Our inquiries also found that customers of long steel products can easily switch between distributors if one is offering a more competitive price.”
Further information is available at GFG Alliance Australia / Liberty House Group- Steelforce Holdings Pty Ltd.
Background
Liberty is part of GFG Alliance, an international group of businesses founded and owned by the British Gupta family. Liberty acquired the Whyalla steelworks in South Australia and the former OneSteel steel distribution business from Arrium in 2017. Liberty manufactures long steel products from facilities in New South Wales, Victoria, South Australia and Queensland. It distributes these products, along with a portion of third-party long steel products, through its distribution network.
Steelforce is an Australian steel manufacturer and distributor. Steelforce manufactures one type of long steel product at its facility in Dalian, China. It supplies these products, along with other types of long-steel products imported from third-parties, through its distribution business.
Long steel products have a range of construction and industrial applications. The three categories of long steel products that are relevant to this transaction are hollows, structurals and merchant bars.
Hollows are essentially long steel tubes and can be circular, square or rectangular in shape. They are inputs for construction projects, including buildings, bridges and infrastructure.
Structurals are elongated beams used to provide structural support in infrastructure, such as buildings, utilities infrastructure and warehouses.
Merchant bars are flat, round or square elongated bars and are used in light applications. Such applications include balustrades, furniture, gates and motor vehicles.
Distributors purchase long steel products from Australian manufacturers or from overseas mills through import traders. End-users of long steel products include builders, tradespeople, retail hardware stores and those in agricultural and industrial manufacturing industries.
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6 June 2019The ACCC is seeking views on its proposal to implement a class exemption that would allow small businesses to collectively negotiate with their suppliers and processors, and franchisees and fuel retailers to collectively negotiate with their franchisor or fuel wholesaler, without first having to seek ACCC approval.
Currently, groups of competitors seeking to negotiate together must first obtain formal approval from the ACCC under its ‘authorisation’ or ‘notification’ processes.
This new collective bargaining ‘class exemption’ would give qualifying businesses the ability to collectively negotiate without the risk of breaching competition law.
The proposed class exemption would apply to businesses and independent contractors which form, or are members of, a bargaining group, and each had an aggregated turnover of less than $10 million in the financial year before the bargaining group was formed.
This would cover about 98.5 per cent of Australian businesses.
In addition, all franchisees and fuel retailers governed by either the Franchising Code of Conduct or the Oil Code of Conduct would also be able to collectively negotiate with their franchisor, regardless of their aggregated turnover. 
The proposed legislative instrument and related documents have been released for consultation today.
The exemption would apply to the vast majority of Australian small businesses, and could include, for example, small businesses wanting to jointly buy electricity, or groups of farmers wanting to bargain with the companies who buy their produce.
“Collective bargaining allows businesses to share the time and cost of negotiating contracts, and potentially gives them more of a say on contract terms and conditions,” ACCC Deputy Chair Mick Keogh said.
“These arrangements can also benefit the prospective business partner, because it can result in more efficient scheduling or delivery arrangements.”
“This proposal would make it much simpler and less costly for eligible businesses or franchisees to collectively negotiate. However, the class exemption would not force anyone to join a collective bargaining group, or force a customer, supplier or franchisor to deal with the bargaining group if they did not want to,” Mr Keogh said.
The ACCC undertook preliminary consultation about a potential collective bargaining class exemption last year, receiving positive feedback.
“Now that we have reached a preliminary view about how we think the class exemption should work, and who should be eligible to use it, we are seeking feedback on the proposal,” Mr Keogh said.
The ACCC has in the past considered many applications for approval of collective bargaining arrangements, mostly from groups of primary producers or other small businesses wanting to negotiate with a larger business.
The proposed class exemption would mean most such groups would no longer need to seek approval from the ACCC.
“Businesses not covered by the proposed class exemption would still be able to lodge a notification instead, or use the existing authorisation process, which remains the most suitable process for more complex cases,” Mr Keogh said.
“Some franchisors have flagged competition law concerns as a reason not to negotiate with their franchisees as a group,” Mr Keogh said.
“This exemption would remove any legal doubt, and would ensure that all franchisees who have contracts with the same franchisor or fuel supplier could form a single collective bargaining group, with no franchisees excluded.”
More information about how the ACCC is proposing that the class exemption will work can be found at Collective bargaining class exemption. Submissions close on 3 July 2019.
Notes to editors
The ACCC can make a class exemption if it is satisfied that the conduct (for example, small business collective bargaining) is unlikely to substantially lessen competition or is likely to result in a net public benefit.
The ACCC has considered many applications for collective bargaining arrangements. It has gathered a good evidence base from these cases about the types of collective bargaining that produce public benefits and are unlikely to harm competition, and are likely to be suitable for a class exemption.
It would simply mean that the group can collectively bargain with the supplier or franchisor on a voluntary basis without needing to worry about a possible competition law breach. The other business partner would still be free to elect to continue to negotiate with each member of the group individually.
Background
From 6 November 2017, the ACCC has had the power to make ‘class exemptions’ for specific types of business conduct.
This new power is in addition the ACCC’s existing authorisation and notification processes that allow businesses to seek legal protection for arrangements that risk breaching competition law.
Collective bargaining is the first type of class exemption the ACCC is considering under this new power.
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5 June 2019The ACCC is calling for feedback on a proposal to reauthorise the Australasian Performing Right Association’s (APRA) musical works licensing arrangements for a further five years with additional conditions.
APRA and its members, including composers, songwriters and publishers, hold performing rights for virtually all music played or performed in Australia, and earn royalties from those rights. In most cases, members assign these rights on an exclusive basis to APRA, which collects royalties by imposing licence fees on users of that music.
Many businesses that play music, such as retailers, cafes, bars and broadcasters, need to obtain and pay for a licence from APRA. The fees from these licences are distributed by APRA to its members.
APRA is seeking reauthorisation from the ACCC for its licensing arrangements, to remove any risk that they may breach competition provisions of the Competition and Consumer Act.
The ACCC is proposing to grant APRA reauthorisation for five years, but with strengthened conditions to increase transparency and help protect songwriters and small businesses when dealing with APRA. 
“It’s more efficient for APRA members to collect royalties jointly, rather than every artist having to collect their own royalties and monitor compliance,” ACCC Deputy Chair Mick Keogh said.
“However, APRA already has a near-monopoly, and the exclusivity provisions it has with artists makes its position even stronger. This raises a risk of higher prices for businesses that play music, and other inefficiencies or restrictions for APRA members.”
Respondents to the ACCC’s recent consultation process frequently expressed concerns about the lack of transparency and accountability of APRA, both to its members and also to those businesses from which it collects licence fees.
“We are therefore proposing to grant authorisation for a further five years with conditions that require APRA to be more transparent about licence fees and the way it pays royalties to members, in order to mitigate APRA’s market power and its impact on songwriters and businesses,” Mr Keogh said.
Under the ACCC’s proposal, APRA would also be required to publish information about how it calculates licence fees; to produce a plain English guide to its distribution policies; to publish an annual transparency report with information on rights revenue, operating costs and payments to members; and to continue the “Resolution Pathways” alternative dispute resolution scheme set up in response to a previous ACCC condition. 
The ACCC is seeking submissions on its draft decision, including on the proposed conditions, by 5 July 2019.
Further information, including details about how to make a submission, and a copy of APRA’s application for reauthorisation, are available on the ACCC’s Public Register at Australasian Performing Right Association Limited.
Notes to editors
Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.
Because APRA’s existing authorisation expires on 28 June 2019, APRA has also requested interim authorisation to enable APRA to continue its arrangements while the ACCC finalises its consideration of the substantive application. The ACCC is also seeking submissions about the request for interim authorisation.
Background
APRA is a collecting society established in Australia in 1926. At 31 December 2018, it had approximately 100,000 members (composers, songwriters and music publishers who assign their copyrights to APRA), and 147,416 licensees (businesses who pay APRA a licence fee to perform in public or communicate musical works).
APRA’s arrangements were first authorised with conditions by the Australian Competition Tribunal in 1999. They were reauthorised by the ACCC in 2006, and in 2010 and 2014 subject to additional conditions.
Public performance of a musical work includes broadcast of the work via radio or television, as well as causing works to be heard in public, for example in pubs, clubs, cafes, gymnasiums and workplaces.
The ACCC has a limited role in relation to collecting societies. Because APRA acts on behalf of songwriters who may be considered to be each other’s competitors, its arrangements may risk breaching competition laws unless an authorisation is in place.
Many of the concerns raised about APRA’s arrangements are about the licence fees it charges. The ACCC will consider these concerns as part of its wider assessment about whether APRA’s collective licensing arrangements are likely to result in overall public benefit.
Like other businesses, creators of music are entitled to set fees for use of the music they create. This application for reauthorisation, and the ACCC’s assessment of it, focuses on APRA’s arrangements through which those fees are set, rather than the level of any particular fee (which will vary according to the type of use and other factors). 
Release number: 89/19ACCC Infocentre: Use this form to make a general enquiry.
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