Andrew Leigh

SCAMMERS FACE $10 MILLION+ FINES UNDER LABOR CRACKDOWN

From pharmaceutical companies making misleading claims about products to scammers swindling $229 million from consumers, dodgy business practices are too familiar to Australians.

However, current penalties are too small to act as a deterrent, are low by international standards and are seen as a mere “cost of doing business” according to the Federal Court, the ACCC, and consumer advocates.

Despite the clear case for action, in three years the Abbott-Turnbull Government’s effort to protect consumers has amounted to this:

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Australians are sick of it, and so is Labor. That is why we will crackdown on these practices.

The policy reforms I have announced today will deter and punish anti-competitive and anti-consumer conduct by dramatically increasing penalties.

Labor will:

1. Increase civil penalties under the Australian Consumer Law from $1.1 million to $10 million, bringing penalties in-line with the competition provisions of the Competition and Consumer Act 2010.
2. Adopt the EU’s penalty system for anti-competitive conduct, which is based on 30 per cent of the annual sales of the relevant product or service, multiplied by the number of years the infringement took place, limited to the greater of 10 per cent of annual turnover, or $10 million.
3. Use some of the revenues from increased penalties to increase the ACCC’s litigation budget from its current level of $24.5 million to a maximum of twice that level ($49 million).
4. Amend the Competition and Consumer Act 2010 to give a market studies function to the ACCC so that it can explore public interest issues such as pricing discrepancies and increased market concentration.

Labor will commit to market studies as recommended by the Harper Review because Australia is an outlier internationally, having no body with a fully independent market studies function.

Formal market studies can guide policy makers, instigate legal action, and inform consumer information campaigns. We believe the ACCC is a natural fit for market studies; our proposal formalises and significantly expands some of the market study functions available to the ACCC.

By building upon the reforms announced in Labor’s Fairer Markets for a Fairer Australia policy, Labor’s policy suite will deter and punish unscrupulous conduct by businesses that hurt consumers – particularly vulnerable community members.

For more information about Labor’s plan to deter and punish anti-competitive and anti-consumer conduct, please visit: http://www.100positivepolicies.org.au/reforming_competition_policy_for_fairer_markets_fact_sheet

WEDNESDAY, 15 JUNE 2016

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