Acccount A report of the Australian Competition and Consumer Commission's activities
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acccount
A report of the Australian Competition
and Consumer Commission’s activities
1 ACCCount—1 April to 30 June 2012 1 April to 30 June 2012
Australian Competition and Consumer Commission 23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601 © Commonwealth of Australia 2012 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. ISBN 978 1 921964 75 6 ACCC 08/12_599 www.accc.gov.au
Contents
Acronyms 4
Overview 6
1. Enforcement and compliance 8
Complaints and inquiries 8
2. Communicating with businesses 15
Key areas of education and outreach for the ACCC 15
3. Mergers 21
Merger reviews undertaken in the June 2012 quarter 21
Statement of Issues 23
Public competition assessments 23
Matters 23
4. Authorisations and notifications 27
Authorisations 27
Notifications 33
5. Regulatory affairs 35
Australian Energy Regulator 35
Communications Group 46
Fuel, Transport and Prices Oversight 48
Post 53
Water 53
6. International activities 55
Appendix 59
Legislative matters 59
Speeches 59
3 ACCCount—1 April to 30 June 2012
Acronyms
ACCC Australian Competition and Consumer Commission
ACL Australian Consumer Law
AEMO Australian Energy Market Operator
AER Australian Energy Regulator
ARFF Aviation Rescue and Fire-Fighting
ARTC Australian Rail Track Corporation
ASIC Australian Securities and Investments Commission
CALD Culturaly and Linguistically Diverse
CCA Competition and Consumer Act
CCG Consumer Consultative Group
CDRAC Compliance and Dispute Resolution Advisory Committee
CFR Council of Financial Regulators
CIIC Consumer Information and Implementation Committee
CPL Cents per litre
DMEGCIS Demand Management and Embedded Generation Connection
Incentive Scheme
DNSP Distribution Network Service Provider
DSLAM Digital Subscriber Line Access Multiplexer
DTCS Domestic Transmission Capacity Service
EIAC Education and Information Advisory Committee
ERAA Energy Retailers' Association of Australia
FAD Final Access Determination
FFA Football Federation of Australia
HVAU Hunter Valley Access Undertaking
ICN International Competition Network
ICPEN International Consumer Protection Enforcement Network
IIO Irrigation Infrastructure Operator
IPTV Internet Protocol Television
LPG Liquefied Petroleum Gas
ITA Independent Telecommunications Adjudicator
JIG Joint Implementation Group
LTPA Long-Term Pricing Agreement
MAP Moomba to Adelaide Pipeline
MDB Murray Darling Basin
MDBA Murray Darling Basin Authority
MDF Main Distribution Frame
MOS Market Operator Service
4 ACCCount—1 April to 30 June 2012
MTA Mobile Terminating Access Service
NBN National Broadband Network
NECF National Energy Customer Framework
NEM National Energy Market
NER National Electricity Rules
NERL National Energy Retail Law
NGL National Gas Laws
NGR National Gas Rules
NSP Network Service Plan
NTSC Negotiated Transmission Service Criteria
OECD Organisation for Economic Cooperation and Development
REIWA Real Estate Institute of Western Australia
RPT Regular Public Transport
RULP Regular Unleaded Petrol
SAU Special Access Undertaking
STTM Short Term Trading Markets
SWIFT Society for Worldwide Interbank Financial Transactions
TN Terminal Navigation
WCIR Water Charge (Infrastructure) Rules
5 ACCCount—1 April to 30 June 2012
Overview
The Australian Competition and Consumer Commission (ACCC) administers, enforces and ensures
compliance with the Competition and Consumer Act 2010, including the Australian Consumer Law. This
work enhances the welfare of Australians by promoting competition and fair trading and regulating national
infrastructure and other markets where there is limited competition and natural monopoly characteristics. The
Australian Energy Regulator (AER), also an independent statutory authority funded by the Commonwealth,
is the national energy market regulator. The AER’s functions are set out in national energy market legislation
and rules, and mostly relate to electricity and gas markets in eastern and southern Australia. In the June 2012
quarter, the ACCC undertook a range of activities that benefited both businesses and consumers.
The ACCC protected consumers against unwarranted claims about price increases in the June quarter.
Concerned that consumers may be misled into accepting a price increase for a product or service because
of false claims about the effect of the carbon price, the ACCC launched its Carbon Price Claims Hotline on
18 June 2012 making it easier for consumers and businesses to complain if they suspect false price claims
are being made about the carbon price.
Malaysia Airlines became the ninth international airline to settle ACCC proceedings against it for participation in
a global cartel to fix prices in relation to the carriage of air freight. The ACCC obtained a penalty of $6 million,
injunctions and a contribution to ACCC’s costs.
During the June quarter the ACCC demonstrated its commitment to protecting consumers from large
corporations engaging in misleading and deceptive conduct. The ACCC successfully obtained outcomes
against Apple Pty Ltd, Google Inc and TPG Internet Pty Ltd, each of which were found to have made false
or misleading representations or engaged in misleading and deceptive conduct. The Federal Court imposed
$2.25 million in pecuniary penalties against Apple for its misleading marketing of the third generation “iPad
+ WiFi + 4G” where the hardware was incompatible with available 4G networks within Australia. The Court
imposed $2 million in pecuniary penalties against TPG, which was also ordered to publish corrective notices
and implement a trade practices compliance program in response to false representations made about
the price of services (this judgment is subject to an appeal by TPG). And on appeal, the Full Federal Court
declared that Google had engaged in conduct that was misleading or deceptive. The Court ordered Google
to implement a trade practices compliance program in addition to paying the ACCC’s legal costs. Google has
been given leave by the High Court of Australia to appeal the judgment.
The ACCC utilised its disqualification powers for the first time and reaffirmed its close watch over franchisors
when it obtained a total of $900,000 in pecuniary penalties against the Heartlink Group for alleged false,
misleading or deceptive representations to prospective franchisees regarding the projected earnings of
‘distribution businesses’ for Heartlink branded products. Importantly the ACCC was also able to secure a
15 year disqualification banning the fourth respondent Mr Laurence Glynn Hann, from managing a corporation
for that period.
The ACCC maintained its commitment to safety standards in the provision of children’s products. In light of
ongoing incidents involving moveable soccer goals the ACCC in partnership with the Football Federation of
Australia launched a campaign on 29 June 2012 to raise awareness of the hazards associated with moveable
soccer goals.
On 30 May 2012 the AER launched its new look website with the aim of making information more accessible
for stakeholders. It also aims to satisfy new accessibility obligations on all government agencies. The new
website is designed to reflect the supply chain and provides easy access to overviews of current AER projects.
Airservices Australia notified the ACCC on 8 June 2012 of a proposed price increase. Airservices Australia is
the monopoly provider of air traffic control services in Australia. The ACCC decided not to oppose the price
increase subsequent to an investigation by Fuel, Transport and Prices Oversight Branch and notified the party
on 27 June 2012.
On 28 May 2012 the ACCC issued a draft determination proposing to grant authorisation to NBN Co Limited
to migrate Optus’ hybrid fibre-coaxial subscribers to the National Broadband Network (NBN). This was an
important decision for the ACCC in the rollout of the NBN and adjudication of NBN Co. Through the decision
6 ACCCount—1 April to 30 June 2012the ACCC has demonstrated that efficient infrastructure is seminal with regard to the welfare of consumers
in Australia’s markets. The final determination issued outside of the reporting period reaffirmed the ACCC’s
position set out in the draft determination.
The ACCC made several important decisions in relation to airlines in the June quarter. On 10 May 2012 it
issued a final determination granting authorisation to Virgin Australia and Skywest Airlines to enter into a
Corporate Alliance Framework Agreement for a period of five years. On 27 June 2012 the ACCC issued three
draft determinations proposing to grant authorisation in respect of three affiliation and partnership agreements,
The Star Alliance’s Corporate Plus, Conventions Plus and Meetings Plus programs, Affiliation Agrement
between Emirates and Flydubai and the Commercial Cooperation Agreement and Codeshare Agreement
between Eithad and Air Berlin.
The ACCC continued its oversight of competition in the market through its analysis of company mergers.
The ACCC decided not to oppose the acquisition of AUSTAR United Communications Limited by FOXTEL
Management Pty Ltd after accepting court enforceable undertakings from FOXTEL relating to the types and
sources of content they can obtain exclusive rights over. The ACCC also decided not to oppose Glencore
International’s proposed acquisition of Viterra Inc after concluding the acquisition would not substantially
lessen competition in the relevant South Australian market.
Importantly, the ACCC continued to scrutinise acquisitions by the major supermarkets. On 28 June 2012 it
decided to oppose the proposed acquisition by Woolworths’ subsidiary Australian Leisure and Hospitality
Group of five competing take away liquor retailers in New South Wales.
The ACCC promoted competition and protection of consumers in the sphere of technology and
communications. In addition to the continued monitoring of Telstra’s compliance with its Structural Separation
Undertaking, the ACCC also appointed Dr Rob Nicholls to the role of Independent Telecommunications
Adjudicator.
7 ACCCount—1 April to 30 June 2012
1. Enforcement and compliance
Maintaining and enhancing compliance with the Competition and Consumer Act 2010, including the Australian
Consumer Law, is a key objective of the ACCC. This is achieved by promoting competition and informing
markets, encouraging fair trading and protecting consumers. The enforcement function of the ACCC, including
litigation, is well supported by its liaison, analysis, outreach and compliance arms.
Complaints and inquiries
During the June 2012 quarter the ACCC responded to 40 390 complaints and inquiries from businesses and
consumers, a decrease of 25.62% from the march 2012 quarter (email 19 695 up 1.97%, telephone 20 253
down 34.5%, and letter correspondence 442 down 11.3%).
Of these, 27 080 complaints and inquiries were entered into the ACCC’s database with 828 matters flagged
for further consideration. 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.
8 ACCCount—1 April to 30 June 20121. Enforcement and compliance
Chart 1.1: The ten industries attracting the most complaints (excluding scams)
Misc. Store-Based Retailing 1048
Non-Store Retailing 1029
Car Retailing 828
Electrical, Electronic and Gas Appliance Retailing 725
On Selling Electricity and Electricity Market Operation 463
Central Government Administration 443
Computer and Computer Peripheral Retailing 379
Furniture Retailing 368
Fuel Retailing 332
Other Electrical and Electronic Goods Retailing 284
Scam contacts
Scam activity contacts continued to be significant, accounting for 11 840 or 44 per cent of the complaints
and inquiries entered into the ACCC’s database during the June 2012 quarter. The highest number of scam
contacts received related to advance fee fraud, and computer hacking scams (including the ‘Microsoft scam’).
Table 1.1: Top ten scam categories
Scam type Number of reported scams
Advanced fee / up-front payment (Nigerian style) 3 945
Modem-jacking / key-logging (including computer hacking) 1 737
Online auction & shopping 1 178
Lottery & sweepstakes 1 043
Banking & online account (including Phishing) 840
Unexpected 'prizes' 785
Job & employment (including business opportunity) 399
Dating & romance (including adult services) 382
False billing (advertising, directories, domain names, office supplies) 331
Mobile phone (ringtones, competitions, missed calls) 148
9 ACCCount—1 April to 30 June 20121. Enforcement and compliance
Enforcing the Act for businesses and consumers
In undertaking its enforcement and compliance activity, the ACCC remains committed to working in the
interests of consumers. As Australia’s national consumer protection and competition agency, the ACCC
manages its enforcement and compliance activity to achieve effective and efficient outcomes that serve
the public interest, in accordance with the ACCC’s Compliance and Enforcement Policy, available at www.
accc.gov.au. The ACCC works with the Treasury, Australian Securities and Investments Commission and
state and territory Australian Consumer Law (ACL) regulators and on the committees established to facilitate
ACL cooperation.
Litigation commenced
The ACCC commenced five first-instance litigation proceedings in the Federal Court of Australia during the
June 2012 quarter for alleged breaches of the Act (or the former Trade Practices Act 1974).
Fair trading and consumer protection
Safety Compliance Pty Ltd & Ors
Justice Yates | Federal Court Sydney
Commenced 16 April 2012 | NSD547/2012
The ACCC instituted proceedings in the Federal Court against Safety Compliance alleging false and misleading
representations in relation to workplace safety law requirements.
The ACCC alleges that in the course of telemarketing workplace safety wall charts and first aid kits to small
businesses, Safety Compliance made false and misleading representations. It is also alleged that Safety
Compliance coerced businesses to purchase the workplace safety materials.
Lux Distributors Pty Ltd
Justice Jessop | Federal Court Melbourne
Commenced 10 May 2012 | VID354/2012
The ACCC instituted proceedings in the Federal Court against Lux Distributors alleging unconscionable
conduct in relation to the sale of vacuum cleaners.
The ACCC alleges that between 2009 and 2011 Lux engaged in unconscionable conduct in relation to the sale
of vacuum cleaners to five elderly consumers. It is alleged Lux sales representatives used unfair and pressuring
sales tactics to persuade the consumers to purchase a vacuum cleaner for a price of up to $2280.
UNJ Millenium Pty Ltd & Anor
Justice Greenwood | Federal Court Brisbane
Commenced 1 June 2012 | QUD267/2012
The ACCC instituted proceedings in the Federal Court against UNJ Millenium in relation to alleged misleading
claims about country of origin of products sold, and further misrepresentations on other products sold.
The ACCC alleges that UNJ falsely represented that the various products they sold were made in Australia,
when they were not substantially transformed in Australia. It is also alleged that UNJ falsely represented that
various products contained 100 per cent wool or contained pure alpaca filling, when this was not the case.
10 ACCCount—1 April to 30 June 20121. Enforcement and compliance
Metricon Homes Qld Pty Ltd
Justice Collier | Federal Court Brisbane
Commenced 25 June 2012 | QUD229/2012
The ACCC instituted proceedings in the Federal Court against Metricon Homes Qld in relation to alleged
misleading and deceptive conduct in relation to advertising for the sale of land and building packages in
South‑East Queensland and northern New South Wales.
The ACCC alleges that between July 2009 and August 2011 Metricon used a variety of misleading
representations in its printed and online promotional materials for its range of homes, which related to price,
value, inclusions and build time.
Dateline Imports Pty Ltd
Justice Reeves | Federal Court Brisbane
Commenced 25 June 2012 | QUD300/2012
The ACCC instituted proceedings in the Federal Court against Dateline Imports in relation to alleged false
or misleading representations in relation to products containing formaldehyde, which exceeded the levels
permitted by Australian state and territory regulations for products of this type.
The ACCC alleges that between June 2009 and November 2010 Dateline Imports supplied hair dressing
businesses in Australia with the hair straightening product ‘Keratin Complex Smoothing Therapy’ for use in
supplying hair straightening services to their customers, that contained unsafe levels of formaldehyde.
Proceedings concluded
Four first-instance enforcement litigation proceedings relating to fair trading and consumer protection were
finalised during the June 2012 quarter. Three first-instance enforcement litigation proceedings relating to
competition were finalised during the June 2012 quarter. Three appeals and one contempt matter were
finalised during the June 2012 quarter.
Fair trading and consumer protection
Jutsen & Ors
Justice Nicholas | Federal Court Sydney
Commenced 14 May 2010 | Concluded 18 May 2012 | NSD529/2010
Proceedings in the Federal Court against three respondents related to illegal participation in the TVI Express
pyramid selling scheme.
Outcome | pecuniary penalties totalling $200,000, injunctions, declarations and order to pay ACCC costs.
11 ACCCount—1 April to 30 June 20121. Enforcement and compliance
Halkalia Pty Ltd & Ors (Heartlink Group)
Justice Tracey | Federal Court Melbourne
Commenced 6 May 2011 | Concluded 28 May 2012 | VID362/2011
Proceedings in the Federal Court against the Heartlink Group for alleged false, misleading or deceptive
representations to consumers regarding the projected earnings of ‘distribution businesses’ for Heartlink
branded products.
Outcome | pecuniary penalties totalling $900,000, disqualification order for 15 years against the fourth
respondent, injunctions, declarations and order to pay ACCC costs.
TPG Internet Pty Ltd
Justice Murphy | Federal Court Melbourne
Commenced 16 December 2010 | Concluded 19 June 2012 | VID1099/2010
Proceedings in the Federal Court against TPG for alleged false and misleading advertising and failing to
prominently specify the minimum charge in relation to a national advertising campaign for TPG’s $29.99
Unlimited ADSL2+ campaign.
Outcome | pecuniary penalty $2 million, corrective notices, maintain a trade practices compliance program,
injunctions and order to pay ACCC costs. This matter is subject to appeal.
Apple Pty Ltd and Apple Inc
Justice Bromberg | Federal Court Melbourne
Commenced 28 March 2012 | Concluded 21 June 2012 | VID271/2012
Proceedings in the Federal Court against Apple alleging misleading advertising for the product ‘iPad with
WiFi + 4G’. Apple agreed to the declaration that the conduct could mislead the public and consented to the
penalties and other orders sought from the Court.
Outcome | pecuniary penalty $2.25 million, declarations, ordered to pay a contribution to ACCC costs.
Competition
Link Solutions & Ors
Justice Bennett | Federal Court Sydney
Commenced 2 October 2008 | Concluded 5 April 2012 | NSD14732/2008
Proceedings in the Federal Court against multiple respondents related to telecommunications and related
companies, finance companies and their directors and employees, alleging third line forcing and misleading
and deceptive conduct. The remaining respondents to the proceedings were Clear Telecoms Pty Ltd,
Australian Integrated Finance and WorldTel and Axis individuals.
Clear Telecoms Outcome | declarations, injunction, and contribution towards ACCC costs.
Australian Integrated Finance Outcome | declarations.
WorldTel and Axis individuals Outcome | declarations and injunctions.
12 ACCCount—1 April to 30 June 20121. Enforcement and compliance
Malaysian Airlines
Justice Emmett | Federal Court Sydney
Commenced 2 October 2008 | Concluded 14 June 2012 | NSD373/2010
Proceedings related to price fixing as part of a cartel in relation to the carriage of air freight. Malaysia Airlines is
the ninth international airline to settle proceedings against it.
Outcome | pecuniary penalty $6 million, 5 year injunctions, and contribution towards ACCC costs.
Eternal Beauty Products Pty Ltd & Anor
Justice Murphy | Federal Court Melbourne
Commenced 30 January 2012 | Concluded 31 May 2012 | VID79/2012
Proceedings in the Federal Court against Eternal Beauty Products and its only Australian director for alleged
resale price maintenance.
Outcome | penalties totalling $90,000, declarations, implementation of a trade practices compliance program,
and contribution towards ACCC costs.
Other
Google Inc (appeal)
Chief Justice Keane, Justices Jacobson, Lander | Federal Court Sydney
Commenced 12 October 2011 | Concluded 3 April 2012 | NSD1759/2011
Proceedings related to the ACCC appeal against Google alleging that Google had engaged in misleading or
deceptive conduct by publishing certain advertisements on Google’s search results page.
The Full Federal Court allowed the appeal and declared that Google, by publishing the four advertisements that
were subject of the ACCC’s appeal on results pages of the Google Australia website, engaged in conduct that
was misleading or deceptive or likely to mislead or deceive.
This matter has been granted special leave to the High Court to be heard in September 2012.
Outcome | Implement a trade practices compliance program and order to pay ACCC costs.
MSY Technology Pty Ltd & Ors (appeal)
Justices Greenwood, Logan and Yates | Federal Court Sydney
Commenced 5 May 2011 | Concluded 19 April 2012 | NSD578/2011
Proceedings related to alleged false or misleading representations regarding statutory warranty rights of
consumers in notices, pricelists, pamphlets and promotional material placed in stores and on certain receipts
issued to customers.
The Full Federal Court upheld the appeal by the ACCC against one aspect of the orders made in the
original case.
Outcome | declarations.
13 ACCCount—1 April to 30 June 20121. Enforcement and compliance
Carmichael Builders Pty Ltd (appeal)
Justices Lander, Jessup, Foster | Federal Court Sydney
Commenced 11 November 2011 | Concluded 24 May 2012 | QUD479/2011
Proceedings related to Carmichael Builders appealing the decision of the Federal Court made in relation
to findings that Carmichael Builders engaged in illegal price controlling conduct known in the construction
industry as ‘cover pricing.’
The Full Federal Court dismissed Carmichael Builders appeal. The dismissal followed the withdrawal of the
appeal from Carmichael Builders Pty Ltd.
Outcome | appeal dismissed.
Jutsen (contempt)
Justice Jagot | Federal Court Sydney
Commenced 6 July 2010 | Concluded 5 June 2012 | NSD529/2010
Proceedings related to two charges of contempt against Ms Jutsen. The first related to contempt of orders
made by Justice Yates on 14 May 2010, and the second related to contempt of orders made by consent by
Justice Bennett on 20 May 2010.
Outcome | penalty on second charge of $90,000. Respondent was not found to be in contempt in relation to
the first charge.
Court enforceable undertakings accepted
The ACCC accepted one enforcement-related section 87B undertaking during the June 2012 quarter.
Fair trading and consumer protection
TWM Imports Pty Ltd
Undertaking given 22 May 2012
Undertaking related to the supply of hydraulic trolley jacks that did not comply with the mandatory Australian
and New Zealand Safety Standard and by making false and misleading representations in relation to the jacks’
compliance with the Safety Standard. TWM Imports has also paid to the ACCC three infringement notice
penalties relating to this conduct.
Outcome | TWM Imports has undertaken that it will refrain from engaging in similar conduct in the future,
destroy all stock of the non-compliant jacks and verify the same to the ACCC, and implement a trade practices
compliance program.
14 ACCCount—1 April to 30 June 2012
2. Communicating with businesses
Key areas of education and outreach for the ACCC
The ACCC has a strong record of working with other regulators, government departments, businesses,
industry associations and consumer associations in monitoring emerging trade practices issues and educating
key stakeholders.
The ACCC also engages with industry associations, professional associations and consumer associations to
promote greater understanding of the Competition and Consumer Act and to respond to issues identified by
those organisations. In the June 2012 quarter these engagements included:
• meetings with a range of industry associations including a number of motor vehicle associations to discuss
the Australian Consumer Law with a particular focus on consumer guarantees
• on 15 and 16 May 2012 the ACCC and the AER shared an information stand at the Financial Counselling
Australia Conference in Melbourne. A range of ACCC publications were distributed at the conference,
which was attended by over 300 attendees. The consumer guarantees publication ‘Repair, Replace,
Refund – if it’s not right, use your rights’ was the most sought after ACCC publication
• ACCC’s education and engagement managers delivered more than 40 presentations and seminars
to industry groups, businesses and consumers about a variety of topics including ACL provisions
including consumer guarantees, warranties against defects, unfair contract terms, scams, carbon price
representations and franchising
Carbon price
On 18 June 2012, the ACCC launched the Carbon Price Claims Hotline, 1300 303 609, and released an online
form to complete about suspect carbon price claims.
The Hotline and form aims to provide consumers and business with a simple mechanism to inform the ACCC
where they suspect false price claims are being made about the carbon price. While businesses are free to
set their own prices, if they make claims about the impact of the carbon price on their prices these need to be
truthful and have a reasonable basis.
15 ACCCount—1 April to 30 June 20122. Communication with business and consumers
Product safety
This quarter the ACCC launched an education campaign to raise awareness of the hazards associated with
moveable soccer goals and to demonstrate safe behaviour while installing, using and storing moveable soccer
goals. The Football Federation of Australia partnered with the ACCC to deliver the campaign that will target
primary carers, organisations such as schools and soccer clubs, as well as intermediaries such as state
football associations and local councils.
Australian Consumer Law
The ACCC continued to work with businesses, industry associations and consumer groups to promote
awareness of the ACL and the rights and obligations that it provides. Key activities for the quarter included:
• participation in monthly meetings of the Compliance and Dispute Resolution Advisory Committee (CDRAC)
and the Education and Information Advisory Committee (EIAC) which are comprised of Commonwealth,
state and territory ACL regulators
• development of publications, post cards and articles on consumer protection issues for distribution to
consumers or inclusion in industry newsletters and journals, presentations at industry events and the
dissemination of ACCC and joint-agency guidance material through the ACCC and other government
agency networks including local government. The publications covered topics on the new law regarding
warranties against defects, repair notices, consumer guarantees and consumer rights in relation to door to
door sales practices.
These activities enable the ACCC, together with state and territory counterparts, to deliver consistent guidance
to business and consumers about their rights and obligations under the ACL.
The ACCC continued to work closely with the Treasury, Australian Securities and Investments Commission
(ASIC), and state and territory consumer protection agencies on national projects for:
• Indigenous consumer issues: addressing a number of issues identified in the National Indigenous
Consumer Strategy as key to improving the trading practices of traders serving Indigenous consumers
• unfair contract terms: taking a proactive compliance review of standard form contracts and appropriate
enforcement action for non-compliance
• environmental claims: compliance with energy efficiency measures that are potentially misleading, vague
or false
• consumer guarantees: educating suppliers of goods on the consumer guarantee provision of the ACL
• Online group-buying traders: to address consumer concerns regarding online group-buying traders.
Consumer protection issues in Indigenous communities
The ACCC’s Indigenous consumer protection strategy identifies and addresses consumer protection issues
of concern to Indigenous consumers. The ACCC is consulting with the appropriate agencies to facilitate
more effective information sharing. The ACCC is also contributing to the work undertaken with the National
Indigenous Consumer Strategy to address specific areas of concern of Indigenous consumers, such as unfair
trading practices and consumer literacy.
Indigenous communities continued to be the focus of the ACCC’s consumer guarantees awareness-raising
activities. Indigenous communities were identified as one of the sectors of the population that are more at risk
of detriment and having lower levels of awareness about their consumer rights than the broader community.
As part of the focused efforts to reach this audience, a poster and fridge magnet about consumer guarantee
rights, prepared by Indigenous communication specialists, was disseminated to Indigenous communities.
The ACCC continues to operate its Indigenous Hotline, 1300 303 143. The ACCC also has a dedicated
Indigenous outreach officer who visits remote communities in the Northern Territory on a regular basis.
16 ACCCount—1 April to 30 June 2012National Indigenous radio campaign
During NAIDOC week from 1 to 8 July, the National Indigenous radio campaign commenced. The project
has been developed as part of the CDRAC and EIAC communications component of the NSW door-to-door
selling and unfair trader practices national project. The ACCC has assisted this project by making the ACCC
Indigenous hotline number (1300 303 143) available for use in the campaign.
The national campaign includes the development of collateral, advertising and community engagement to
educate Indigenous consumers about their rights when a salesperson comes to their door. In addition to
dealing with door-to-door sales, the advertisements, which will run on Indigenous radio stations for about three
weeks, will also relate to Bookup (a buy now pay later short term credit system, typically used in used the sale
of groceries) and mobile telephones.
Unfair contract terms
During this quarter, the ACCC finalised its proactive reviews of standard form consumer contracts in the
telecommunications and vehicle rental industries. The ACCC engaged with key traders in these sectors to
secure amendments to terms identified by the ACCC as being potentially unfair. The ACCC is considering
enforcement action for a number of outstanding issues where businesses did not sufficiently address
concerns.
The ACCC continues its work on the CDRAC National Online Unfair Contract Terms Project. The national
review has involved the assessment of online terms and conditions in a broad range of online sectors including
online retail, travel, group buying, digital media and online auction sites. Through this compliance initiative,
significant amendments have already been made to address the ACCC’s concerns.
Online markets project
During this quarter, the ACCC initiated an investigation into online market structures and business relationships
that may be generating anti-competitive behaviour.
Consumer guarantees
During the quarter, the ACCC continued to undertake activities aimed at raising consumer and business
awareness about consumer guarantees under the Australian Consumer Law. Some digital online advertising
that formed part of the ACCC’s consumer guarantees national awareness raising campaign ‘Repair, Replace,
Refund – if it’s not right, use your rights’ continued to June 2012. The digital advertising targeted a broad
range of potential online shoppers through tailored placements via search engine marketing and popular
online shopping sites. The campaign was launched on 5 February and also featured radio and select outdoor
placements that appeared from 5 February to 3 March 2012.
The campaign aimed to increase consumers’ awareness of their rights when they buy goods and services that
are faulty, unsafe or do not work as intended, and increase their confidence to go back to the business with a
problem or contact their local consumer protection agency or the ACCC when the business refuses to help.
The campaign appealed to consumers generally, with a focus on those consumers who are most at risk of
detriment: those that have a lower knowledge of consumer law and lower confidence in pursuing entitlements
than the broader community. Research indicated that this target audience comprised of consumers including
those from culturally and linguistically diverse (CALD) backgrounds, Indigenous communities, young
consumers, consumers with lower income and education levels and consumers living in regional areas.
During the quarter, the ACCC continued to disseminate campaign material through several key intermediaries
in touch with various target community groups, including Indigenous communities, migrant communities and
regional consumers. This also included daily postings on the consumer guarantees Facebook page.
17 ACCCount—1 April to 30 June 2012While the campaign primarily targeted consumers, the ACCC continued to work closely with businesses,
business stakeholder groups and intermediaries as part of its ongoing education and engagement activities to
increase businesses’ awareness about rights and obligations under the consumer guarantees provisions. This
included engagement with key retail industry associations and large and small retailers, particularly businesses
in the electronic, telecommunications and whitegoods sectors, including manufacturers and importers about
consumer guarantees education and compliance matters.
The ACCC’s preliminary evaluation of the campaign has indicated a significant increase in the level of
confidence of the consumers surveyed in relation to their knowledge of the consumer rights in the situation
where they purchase a faulty product or service. The largest increases in confidence were amongst the target
audience sectors of consumers who do not speak English at home, and consumers with an education level of
high school or below.
An evaluation report of the campaign is being prepared and the ACCC expects to make this report available in
August 2012.
Unsolicited selling
In 2011, the ACCC established a project to implement strategies to curb the detrimental effects of door to
door marketing practices. This project is a collaborative effort between the ACCC and the AER.
In January 2012, the ACCC developed and distributed nationally 30 000 Avant Cards (with a magnet
attachment) on door to door sales, with a focus on raising consumers’ awareness of consumer protections
under the ACL. During April and May 2012, the ACCC published door-to-door sales articles in ONECOTA
(issued by the Council on the Ageing) and in newsletters published by the Municipal Association Victoria and
each of its 78 member councils.
The ACCC in conjunction with the Consumer Consultative Committee engaged a researcher, Frost & Sullivan,
to undertake research into the door-to-door sales industry to gain a deeper understanding of how these selling
practices operate in Australia. Frost & Sullivan has prepared the research report entitled ‘Research in to the
door-to-door sales industry in Australia.’ The research will assist the ACCC in its future work including the
development of trader and consumer education and compliance strategies.
The consumer guide on door-to-door sales is currently being finalised and is in consultation with members
of the Consumer Consultative Committee and EIAC members and it is anticipated it will be launched during
August 2012.
Scams
During the quarter, the ACCC continued work on initiatives to alert consumers to new and emerging scams.
Five ‘SCAMwatch radars’ were issued covering:
• directory listing scams targeting small businesses
• native language call scams
• scratchies scams strike again
• carbon price scams
• voucher prize text message scams
In May 2012, the ACCC released a SCAMwatch radar alert titled ‘beware of native language call scams.’
The alert aimed to protect vulnerable Australians for whom English is their second language. These
Australians were susceptible to sending money away to scammers purporting to be acting on behalf of their
financially troubled or sick relatives. The scam radar was released through the ACCC’s non-English-speaking
background/culturally and linguistically diverse (CALD) Stakeholder Information Network. The aim of this
information network is to reach people from culturally and linguistically diverse communities through their
community associations, community service agencies and ethnic media.
18 ACCCount—1 April to 30 June 2012The ACCC’s SCAMwatch website has attracted close to 800 000 unique visitors. There have been in excess
of 20.5 million hits on the SCAMwatch site, an increase of almost 400 per cent. On average, the site receives
almost 2 million hits per month. Performance figures confirm that the SCAMwatch website is the ACCC’s most
effective and successful tool to educate consumers and small businesses about scams. Figures show a strong
consumer and small business demand for scam-specific online resources. The SCAMwatch Twitter account
has issued almost 1800 tweets and gained more than 3400 followers.
Industry code compliance audits
The ACCC has the power to conduct audits to monitor compliance with prescribed industry codes. Section
51ADD of the CCA allows the ACCC to obtain from a business any information or documents it is required to
keep, to generate or to publish under a prescribed code of conduct.
The ACCC has now served audit notices on 27 traders operating under the Franchising Code of Conduct
and the Horticulture Code of Conduct (18 franchisors and nine horticulture traders) since the power
was introduced. The majority of businesses audited to date have been found to be compliant with the
relevant codes.
Product safety
Emerging hazards and product safety recalls
During the quarter, the ACCC:
• reviewed 665 mandatory reports of which 372 were referred to other regulators (predominantly food
reports referred to Food Standards Australia New Zealand). The remaining 293 were at initial assessment
stage or under assessment by the ACCC.
• received notification and uploaded details of 92 consumer product safety recalls to the Recalls Australia
website (www.recalls.gov.au)—58 of these recalls were for consumer goods, which are recalls actively
managed by the ACCC.
• significant recalls this quarter included the Heatcraft Australia Pty Ltd-Kirby “Drop-in” Refrigeration Units,
IKEA 365+ S Sända ceiling lamp (70cm & 114cm), Legrand Australia - HPM Assorted Extension Leads,
Kmart Australia Limited - Homemaker 6.8L Stainless Steel Urn and Gerard Sourcing & Manufacturing
Linda electric blanket (also sold as Homemaker, Living Essentials).
Industry has continued its high use of the recalls progress reporting e-form, with take-up of 95 per cent for
the quarter. The form is one of the tools used by the ACCC when reviewing recall effectiveness and deciding
whether to stop monitoring a recall.
Minimising potential harm to consumers
The Assistant Treasurer, the Hon David Bradbury MP, issued a safety warning notice on 28 June 2012 to
alert consumers to the potential safety hazards associated with magnets. This action followed an increase of
reported serious injuries associated with small, high-powered magnets.
The products are marketed under various names including ‘BuckyBalls’, ‘Neocubes’ and ‘Neodymium sphere
magnets’. The magnets have an approximate diameter of 5mm and are sold as novelty items for adults to
create patterns and build shapes.
Injury reports indicated that these magnets have been ingested by young children, and that older children and
teenagers have also inadvertently swallowed the magnets after using them as imitation tongue or lip piercings.
If more than one of these high-powered magnets is swallowed, they can attach to each other across the
intestinal wall and perforate the intestine, which can be fatal.
19 ACCCount—1 April to 30 June 2012The ACCC is working with the Queensland Office of Fair Trading to address this safety hazard. All known
suppliers of these magnets are being contacted to highlight concern at the increase in reported serious injuries
and to seek their assistance in addressing the safety issue.
In terms of enforcement matters for the quarter, the ACCC has commenced legal proceedings in the Federal
Court against Dateline Imports Pty Ltd for alleged false representations about the ingredients and safety of a
hair straightening solution, Keratin Complex Smoothing Therapy. The hair straightening solution claims to be
free of formaldehyde; however the ACCC contends that the product contains formaldehyde at concentrations
greatly in excess of the permitted safe level.
Regulatory policy
This quarter, the ACCC continued to progress work in relation to possible mandatory standards, including:
• consideration of issues raised in public submissions in response to the draft regulation impact statement
for mandated warning labels on domestic trampolines
• progressing work in relation to the introduction of mandated warning labels on children’s portable
swimming pools
• reviewing public submissions in relation to a proposed services standard for corded internal window
coverings
• consideration of public submissions in relation to the review of the mandatory standard for baby walkers
Case study: Moveable soccer goal safety campaign
Moveable soccer goals have attracted safety concerns worldwide. In Australia, there has been at least
one serious injury resulting in paraplegia and seven deaths since 1986 attributed to moveable soccer goal
posts, the most recent being 2004.
Moveable soccer goals are characterised as any freestanding soccer goal designed to be moved from
field to field or on and off a field. The safety concerns lie with those that weigh 28 kg or more. There has
been a mandatory safety standard in Australia on moveable soccer goals since 2010 which includes
requirements for labelling, provision of anchor points and testing.
The Football Federation of Australia (FFA) has partnered with the ACCC launching a campaign on
29 June 2012 to raise awareness of the hazards associated with moveable soccer goals and to
demonstrate safe behaviour while installing, using and storing moveable soccer goals. The FFA
spokesperson for the campaign is Adrian Leijer, Captain of A-league team Melbourne Victory.
The campaign seeks to target primary carers, coaches, teachers, soccer clubs, sporting associations and
local councils through the delivery of a variety of educational materials including -
• A video ‘Anchor, Check, Respect: The Game Plan for Moveable Soccer Goal Safety’– on YouTube
featuring Adrian Leijer –available to order DVD.
• A poster with safety information featuring Adrian Leijer.
• A flyer with survey and option to order the video on DVD.
• Social media posts on Facebook and Twitter.
For further information about the campaign visit www.productsafety.gov.au/soccergoals .
20 ACCCount—1 April to 30 June 2012
3. Mergers
In assessing mergers, acquisitions and asset sales under section 50 of the Competition and Consumer
Act 2010, the ACCC conducts thorough and rigorous processes to ensure transactions do not lead to a
substantial lessening of competition in the marketplace.
Merger reviews undertaken in the June 2012 quarter
In the June 2012 quarter 65 matters were pre-assessed by the ACCC as not requiring review and reviews were
conducted on 23 matters, including confidential and public merger reviews. The ACCC expressed concerns
following two confidential reviews of merger proposals.
Table 3.1: Matters assessed and reviews undertaken, June 2012 Quarter12
Confidential Public Total
Pre-assessed 1 April – 30 June 2012 65 0 65
Total reviews undertaken 1 April – 30 June 2012 4 19 23
Total reviews can be broken down into the following categories:
Not opposed 0 10 10
Finished—no decision (including withdrawn)1 2 4 6
Opposed outright 0 1 1
Confidential review—ACCC concerns expressed 2 0 2
Resolved through undertakings2 0 1 1
Variation to undertaking accepted 0 3 3
Variation to undertaking rejected 0 0 0
Total matters assessed and reviews undertaken 4 19 23
1 These are matters that were withdrawn or where no decisions were made. They are not included in the timings in table 3.3.
2 Only public matters can be resolved through undertakings.
21 ACCCount—1 April to 30 June 20123. Mergers
Table 3.2: Matters assessed and reviews undertaken, financial year comparisons
2009-10 2010-11 2011-12
Total matters assessed and reviews undertaken 321 377 340
Matters assessed - no review required 153 236 250
Reviews undertaken 168 141 90
Total reviews can be broken down into the following categories:
Not opposed 131 110 60
Finished – no decision (incl. withdrawn) 16 14 17
Publicly Opposed outright 8 3 1
Confidential review – Opposed or ACCC concerns 6 4 6
expressed
Resolved through undertakings 4 7 3
Variation to undertaking accepted 2 3 3
Variation to undertaking rejected 1 0 0
Time taken to assess mergers
The following table breaks down the time taken by the ACCC to complete reviews of merger proposals in the
June 2012 quarter. This does not include 65 pre-assessed matters (the majority of these are completed within
two weeks), six matters that were either withdrawn or where no decision was formed on a confidential basis,
one review of a completed acquisition and three matters which involved acceptance of variations to existing
undertakings.3
Table 3.3: Time taken to review merger proposals 1 April – 30 June 2012
Total review days Number of reviews
(less clock stoppers)
≤ 2 weeks 0
2 – 4 weeks 0
4 – 6 weeks 2
6 – 8 weeks 4
Total less than 8 weeks 6
Total more than eight weeks 7
Note: Total review days = Total business days less public holidays and time during which the review was
suspended for the reasons set out in the ACCC Process Guidelines. These totals are posted on the ACCC
website for all completed public reviews.
3 Reviews of completed mergers are not included in table 3.3. Completed mergers are not subject to the same time frames as reviews of proposed mergers for several
reasons, including that it often takes longer to obtain parties’ submissions because the time incentives of parties are altered. The tables do not include matters pre-assessed
as not requiring substantive review, e.g. FIRB notifications. The majority of matters that are pre-assessed as not requiring a review are dealt with in less than two weeks, but
are not recorded in these tables because the tables list only the timing relating to substantive merger investigations.
22 ACCCount—1 April to 30 June 2012Statement of Issues
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.
In this quarter the ACCC publicly released a Statement of Issues on the following matters:
• ALH Group Pty Ltd proposed acquisition of the Caringbah Hotel - issued on 31 May 2012
• Woolworths Limited and Lowes Companies Inc JV proposed acquisition of G Gay & Co hardware Stores in
Ballarat - issued on 16 May 2012
Public competition assessments
To support the aim of fostering informed markets and provide an enhanced level of transparency in its decision
making, the ACCC provides public competition assessments outlining how decisions are reached on matters
of particular public interest or those that have important precedence value.
In this quarter the ACCC released the following public Competition Assessment:
• Foxtel proposed acquisition of Austar United Communications Ltd - Subscription television - issued on 14
June 2012
Matters
Major matters decided during the June 2012 quarter included:
FOXTEL - proposed acquisition of Austar United Communications Limited
Outcome | On 10 April 2012 the ACCC announced its decision not to oppose the proposed acquisition
of AUSTAR United Communications Limited by FOXTEL Management Pty Limited after accepting court-
enforceable undertakings from FOXTEL.
On 26 May 2011 the ACCC commenced a review of the proposed acquisition of Austar by FOXTEL.
FOXTEL is Australia’s largest subscription television company. Prior to the proposed acquisition it had
approximately 1.6 million residential subscribers in metropolitan Australia. FOXTEL’s ultimate shareholders
include Telstra (50%) and News Corporation (25%). Austar operated in regional areas and had approximately
750,000 residential subscribers.
The ACCC’s review of the proposed acquisition began in May 2011. Although the proposed acquisition
involved merging Australia’s only two large-scale subscription television providers, long-standing content
distribution arrangements meant that they did not directly compete in the same geographic regions (except
in the Gold Coast). The ACCC was required to assess whether the evolving nature of the subscription
television industry, and the related telecommunications industry, meant that FOXTEL and Austar were likely to
meaningfully compete in the future in the absence of the proposed acquisition.
Following widespread consultation with the merger parties and market participants as well as an extensive
review of documents supplied by the parties, the ACCC formed the view that without the proposed
acquisition, there would have been greater potential for competition between Austar and FOXTEL (including
its shareholder, Telstra) in the subscription television market (particularly in relation to the developing internet
protocol television (IPTV) field) and a number of regional telecommunications markets.
After this view was communicated by the ACCC to the merger parties, FOXTEL offered the ACCC court-
enforceable undertakings to address the ACCC’s concerns. The ACCC conducted market inquiries on
23 ACCCount—1 April to 30 June 2012the undertakings and, following further negotiations, agreed on 10 April 2012 to not oppose the proposed
acquisition subject to the undertakings.
The core obligations in the undertakings restrict FOXTEL’s ability to acquire certain content on an exclusive
basis. The ACCC expects that as telecommunications networks develop, the undertaking will give
existing and future competitors the opportunity to develop differentiated and more affordable subscription
television offerings that are attractive to consumers. These offerings, which could be bundled with other
telecommunications services, would be likely to improve competition in both subscription television
and telecommunications markets as retailers increasingly seek to bundle IPTV services with other
telecommunications products.
Glencore International plc - proposed acquisition of Viterra Inc
Outcome | On 7 June 2012 the ACCC announced its decision not to oppose Glencore International plc
proposed acquisition of Viterra Inc.
On 29 March 2012 the ACCC commenced a review of the proposed acquisition of Viterra Inc by Glencore
International plc.
After an extensive public review process which included consultation with grain growers, competitors and
consideration of a submission from the South Australian Parliament’s Select Committee on the Grain Handling
Industry, the ACCC formed the view that the proposed acquisition would not result in a substantial lessening of
competition in any relevant market.
The ACCC’s review focussed on the competitive impact of the proposed acquisition in South Australia
given Viterra’s significant activities in that state and in particular, its ownership and operation of the vast
majority of up-country grain storage and handling sites in South Australia and the six grain port terminals in
South Australia.
The only horizontal overlap between Glencore and Viterra of any significance is the trading of grain in South
Australia. Market inquiries indicated that the merged firm would continue to face competition from a number of
viable alternative grain traders and the ACCC found that the proposed acquisition would be unlikely to enable
Glencore to depress prices paid to growers for grain or raise prices of grain to domestic customers.
The ACCC also considered whether the proposed acquisition would provide the merged firm with the
increased incentive or ability to foreclose rival grain traders’ access to Viterra’s up-country grain storage and
handling services and bulk grain port terminal services or provide access on discriminatory terms. The ACCC
considered that the merger did not materially change this incentive or ability as Viterra’s strong position was
simply being acquired by Glencore. That is, the merger did not substantially change the existing position.
The ACCC considered that post acquisition there is expected to be an ongoing incentive for the merged firm
to maximise throughput at its up-country grain storage and handling facilities and grain bulk export terminals
due to the high fixed costs associated with these facilities and because the aggregate capacity associated with
these facilities would significantly exceed the merged firm’s likely requirements.
During the ACCC’s review, a number of interested parties suggested the ACCC should impose conditions on
its approval of the proposed acquisition including, for example, commitments on Glencore to divest some of
the merged firm’s up-country storage sites and grain port terminals.
In appropriate cases, the ACCC may consider and accept undertakings from merger parties to remedy
competition concerns which arise from a proposed transaction. However, in this case, the transaction itself
was not the cause of the concerns raised with the ACCC. The main concerns were issues with the existing
market structure, and accordingly it was not appropriate for the ACCC to require undertakings which imposed
conditions in this case.
24 ACCCount—1 April to 30 June 2012ALH Group Pty Ltd (75% owned by Woolworths Limited) - proposed acquisition of hotels and
takeaway liquor stores in NSW
Outcome | On 28 June 2012 the ACCC announced its decision to oppose ALH Group Pty Ltd’s proposed
acquisition of five takeaway packaged liquor retailers in NSW.
On 22 December 2011 the ACCC commenced a review of the proposed acquisition by ALH Group Pty Ltd of
31 hotel licences and one takeaway packaged liquor licence in NSW from three vendors - the Laundy Hotel
Group, the Waugh Hotel Group and the De Angelis Hotel Group.
Woolworths Limited has a direct 75 per cent interest in ALH.
The ACCC considered the effect of the proposed acquisition in the following markets:
• local markets for the sale of takeaway packaged liquor for off-site consumption in the areas surrounding
each of the target hotels with associated bottleshops, and in the area surrounding the target standalone
takeaway packaged liquor licence
• a NSW market for the sale of takeaway packaged liquor for off-site consumption. Competition in this
market is between the statewide retail offers and brands of large chains and independent banner group
• local hotel markets for the provision of entertainment, gaming and liquor for on-site consumption, in the
areas surrounding each of the target hotels
• a market for the wholesale acquisition of liquor in NSW.
After an extensive public review, including the publication of a Statement of Issues on 8 March 2012, the
ACCC formed the view that:
• the proposed acquisition of five takeaway packaged liquor retailers (operating under three hotel
licences and the one standalone takeaway packaged liquor licence) would be likely to have the effect of
substantially lessening competition in the relevant local markets
• the proposed acquisition of the remaining 28 hotels (some of which also incorporate takeaway packaged
liquor retailers) was unlikely to substantially lessen competition in local markets, either for the sale of
takeaway packaged liquor, or for hotels
• the proposed acquisition would not substantially lessen competition in the NSW market for the sale of
takeaway packaged liquor, or in the NSW wholesale liquor market.
The ACCC decided to oppose the acquisition of the following takeaway packaged liquor retailers:
• the Chittaway Tavern in Chittaway Bay
• the Albion Park Hotel in Albion Park
• the Ocean Beach Hotel and Ocean Beach Cellars (which trade under the same hotel licence) and the
Umina Foodtown (which trades under a standalone takeaway packaged liquor licence) in Umina Beach.
The ACCC considered that the proposed acquisition by ALH of the five takeaway packaged liquor retailers
identified above would lead to a significant increase in concentration and loss of competitive tension
between takeaway packaged liquor retailers in the Chittaway Bay, Umina Beach and Albion Park areas. The
ACCC also concluded that the acquisitions would result in a loss of choice for customers in those areas,
as the differentiated offering of the targets, including their promotional offers, would be eliminated by the
proposed acquisition.
The basis upon which the ACCC has reached its decision will be outlined in a Public Competition Assessment,
available on the mergers register on the ACCC’s website, www.accc.gov.au.
25 ACCCount—1 April to 30 June 2012You can also read
