In his last speech to the head of Australia’s competition watchdog, Rod Sims implored economists to stop viewing consumer law as “the poor cousin of competition law” and called on regulators to continue making policy suggestions to beyond simple law enforcement.
His speech entitled “Continuing the Australian Consumer Law (ACL) journey” was delivered at the Australian Competition and Consumer Commission’s (ACCC) annual Ruby Hutchinson Memorial Lecture on Tuesday. The occasion also marked World Consumer Rights Day.
Mr Sims made two sets of suggestions to the ACCC: first, to consider “initial rules” for regulating digital platform markets, and second, to determine whether laws applied overseas can be implemented in Australia.
Work on the former began with the launch of a working paper late last month. Regarding this last recommendation, Mr. Sims cited as examples consumer protection in the European Union (EU), the United Kingdom, Germany, South Korea and Japan. In particular, he cited the EU regulation on the platform to businesses, which is similar to the resolution standards and the external ombudsman system that the ACCC has been calling for since 2019.
After nearly 11 years as chairman of the Australian Competition and Consumer Commission, Rod Sims officially steps down on Sunday. He assured listeners that “it’s not the last time you’ll see me” in public policy advocacy.
Although he acknowledged that consumer law in Australia is ahead of the protections of other countries, such as the United States and the United Kingdom, which do not have penalties for breaches of consumer law consumption, Mr Sims said we should remain “appalled by the weakness of the international bar”. is fixed according to the sanctions. Furthermore, he said regulators had a role to play in making policy suggestions in a respectful way, without putting “the government in place in a difficult position”.
Mr Sims also said he was surprised that economists had often overlooked the distribution of income as a “key economic issue” and said it was important to constantly challenge the balance of interests between the economy and consumers. Additionally, he added that small businesses often feel the same way consumers do when dealing with much larger companies.
He then recalled the changes introduced by Australian consumer law in 2011 and underlined the importance of strong penalties to have a deterrent effect.
“Some think that if you have enough competition, consumers will automatically be treated well. This is not the case. The pursuit of profit encourages gaining an advantage by deceiving consumers or selling them dangerous products. Effective competition and a consumer law are both necessary,” Mr. Sims said.
“When I came to the ACCC in 2011, a $1 million fine against a major company was celebrated. I remember then the positive reaction of Optus having to pay a fine of $3.6 million for a breach of Australian consumer law in 2013.
“Then in 2018 it seemed like a milestone that Ford, Apple and Telstra faced fines of $9-10 million. In 2021 we saw Telstra pay a fine of $50 million, VW pay $125 million and AIPE, a professional training company, fined $153 million. What a change. And it’s all under the old sanctions regime.
While Mr Sims was proud of the consumer law changes made under his leadership of the ACCC, he also noted that there remained a number of “glaring gaps”. Mr Sims took aim at Australia’s Unfair Contract Terms (UCT) laws, which do not penalize the sale of faulty or unsafe goods.
“Can you imagine a situation where someone was caught stealing and the result of the police investigations was that they just had to return the money? No penalty for actual theft to deter others. But we have that in our product safety laws. There is no law prohibiting the sale of dangerous products; you are not violating any act by doing so. You just have to recall the goods when they are found to be unsafe.
He also pointed out that it is not illegal for the prices paid by a customer to be increased unilaterally without informing him. It’s also not illegal to use personalized data to “target selling to vulnerable customers at inflated prices or to design interfaces to make choices that aren’t in their best interests.”
“I recognize that the ACCC can sometimes act when consumers have been misled by omission or the conduct was inadmissible, but we know here that such options are difficult. Additionally, business models and strategies are changing rapidly with new technologies and massive data collection, presenting new opportunities for manipulative and unfair business practices.
“Many of them are unregulated because they were not considered when the ACL was created. The prohibition of unfair practices is an essential safety net to ensure that consumers are not harmed. companies widely oppose a law against unfair practices, just as they have opposed a law against deceptive conduct.
Before concluding his speech, Mr Sims told big business that it was in their interest that customers “have confidence” in a market economy that works for them and, secondly, that an unfair practices provision covering the economy as a whole was better than a number of specific laws.
“Australia will have an unfair practice provision. Hopefully that will be sooner rather than later,” Mr Sims said.
“Platforms need to take more responsibility for what they have created; which is a data-driven model that makes huge amounts of money by messaging you, the product they sell.
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