Purpose of the Bill
The purpose of the Competition and Consumer Amendment (Fair Go for Consumers and Small Business) Bill 2024 (the Bill) is to amend the Competition and Consumer Act 2010 (CCA) by adding new Part XIE to provide for a designated complaints framework.
This Bill is part of the broader election commitment to bring about ‘Better Competition’.
Background
About the ACCC
The Australian Competition and Consumer Commission (ACCC) is an independent Commonwealth statutory authority established in 1995. Its role is to administer and enforce the CCA and other legislation, promoting competition, fair trading and regulating national infrastructure for the benefit of all Australians.
In order to meet its regulatory responsibilities the ACCC:
- has a compliance and enforcement policy that sets out the principles for achieving compliance with the relevant laws
- provides information to help businesses implement compliance programs
- reviews an individual compliance program if it is part of a court enforceable undertaking and
- has specific tools to check businesses are complying with mandatory industry codes.
The ACCC uses a range of tools to encourage compliance and prevent breaches of the CCA, including business and consumer education, and working closely with stakeholders and other agencies. The CCA also provides the ACCC with a range of enforcement remedies to address contraventions of the Act, including court-based outcomes and court enforceable undertakings.
As the ACCC is not a complaint handling body, it rarely becomes involved in individual consumer or small business disputes (p. 22). Rather the ACCC uses individual reports, and other sources of intelligence, to inform its compliance and enforcement work.
Rationale for the Bill
Assistant Minister for Competition, Charities and Treasury, Dr Andrew Leigh set out the rationale for the Bill stating:
Consumer and small-business advocates have expressed the need for a consumer complaints framework that allows certain designated entities to bring evidence of significant or systemic market issues to the Australian Competition and Consumer Commission for consideration.
In cases of significant or systemic market issues affecting consumers and small businesses, it's often consumer and small-business advocates who play an important role in bringing publicity and attention to governments, policymakers and the community on serious and systemic issues impacting Australians.
This Bill provides the framework to empower designated consumers and small-business advocates to bring forward evidence of significant or systemic market issues to the Australian Competition and Consumer Commission for a response in a timely and transparent way.
‘Super-complaints’
The idea behind a designated complaints framework (often called ‘super-complaints’) is not new. According to Allen Fels and Fred Benchley in 2006:
The big difference, of course, with standard consumer complaints mechanisms is that super-complaints cover an entire market, not just an individual's experiences.[1]
The United Kingdom (UK) introduced a designated complaints framework (called super‑complaints) in 2003. Subsequently the super-complaints framework was expanded to make special provisions for financial markets (2013), police (2018) and online safety (2023).
Australian views about a super-complaints system
In 2008, the Productivity Commission’s (PC) Review of Australia’s Consumer Policy Framework rejected the need for a super-complaints framework on the grounds that consumers had already sufficient representation.[2]
However, in 2017 the PC revisited super-complaints as part of its consumer law enforcement and administration study. The report found justification for super-complaints as follows (Finding 6.3):
There are grounds for enabling designated consumer bodies to lodge ‘super complaints’, on behalf of classes of consumers, with such complaints to be fast-tracked by the relevant regulator. Instituting sound operational principles — including the criteria for designating consumer bodies, evidentiary requirements to support a complaint, and the process by which a regulator should respond — is an important prerequisite for an efficient super complaints process.[3] [emphasis added]
Again, during 2021 the PC’s Right to repair inquiry report made recommendations for a super‑complaints framework to improve how consumer guarantees are enforced.[4] In 2023, the Consumer Action Law Centre called for, among other things, the Australian Securities and Investments Commission (ASIC) to be given the power to respond to super-complaints from designated bodies.[5]
In the lead-up to the 2019 Federal election, the Australian Labor Party (ALP) announced its intention to introduce a super-complaints policy which would allow recognised consumer and small business advocacy groups to make ‘super complaints’, if elected. The pledge to establish a super-complaint function in the ACCC was included in the ALP’s 2022 election commitments as part of the Better Competition policy.
Committee consideration
At the time of writing this Bills Digest, the Bill had not been referred to a committee for inquiry and report.
Similarly, no comments about the Bill had been made by the Senate Standing Committee for the Scrutiny of Bills.
Policy position of non-government parties/independents
At the time of writing no second reading debate had occurred and the positions of non‑government parties and independents in relation to the Bill have not been publicised in the media.
Position of major interest groups
Treasury circulated an Exposure Draft of the Bill for public consultation during the period 7 December 2023 to 3 January 2024. No submissions have been published on the designated complaints consultation website.
The National Farmers Federation’s (NFF) submission to Treasury broadly supported the designated complaints framework. However, it called for greater clarity on selection and administration of designated complainants suggesting (p. 2) that the ‘government and ACCC should provide specific guidance material on what information and activities are needed to satisfy the compulsory approval criteria’.
The NFF also stated (p. 2) that there should be no annual application period or cap on the number of designated complainants appointed by the Minister each year.
A joint submission to Treasury representing 9 organisations[6] was strongly supportive of the designated complaints framework. However, the submission called for (p. 1) broadening the framework to enable more regulators to be able to accept designated complaints and at a minimum should include:
- Australian Securities and Investments Commission (ASIC)
- Food Standards Australia and New Zealand (FSANZ)
- Therapeutic Goods Administration (TGA)
- Australian Energy Regulator (AER)
- Australian Communications and Media Authority (ACMA)
- state-based consumer law regulators.
The joint submission also made several suggestions on the discretion of the Minister to appoint complainants, resourcing for the ACCC, complaints affecting small groups, and a review mechanism for rejected complaints.
The Insurance Council of Australia’s submission stated that it does not support the additional regulatory layers that the Bill proposes because it could impact the sustainability of general insurers (p. 2).
Following the tabling of the Bill, the Australian Small Business and Family Enterprise Ombudsman in a media release welcomed the:
… introduction of legislation into Federal Parliament that will create a “designated-complaints” mechanism to fast-track serious disputes for small businesses to the ACCC.
“Vast numbers of small and family businesses every year are being compromised and, in some cases, profoundly damaged by unfair business practices and uncompetitive markets,” …[7]
Commenting on the Bill, the ACCC published a media release stating:
The proposed new designated complaints function will reinforce the importance of key issues impacting consumers and small business to the ACCC’s work, as well as the role of advocate organisations in detecting and highlighting emerging issues.[8]
To illustrate the efficacy of designated complaints, the ACCC media release highlighted three matters arising from issues referred to it by consumer and small business advocacy groups.
Financial implications
The Explanatory Memorandum states that the ‘Bill is estimated to have nil or minimal financial impact’.[9] This is consistent with the Budget 2023–24 budget measure that:
… the Australian Competition and Consumer Commission will establish the first phase of a complaints mechanism for designated consumer and small business advocacy groups to raise systemic issues under consumer law (‘super complaints’) within existing resourcing.[10] [emphasis added]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[11]
Key issues and provisions
Item 2 of the Bill inserts proposed Part XIE—Designated complaints into the CCA. The new Part comprises 4 Divisions.
Designated complaints
Proposed Division 2 sets out the rules for making a designated complaint and the procedure that the ACCC must follow on receiving the designated complaint.
Proposed subsection 154ZF(2) provides the manner and form requirements that a designated complaint must comply with to be considered by the ACCC.
Proposed subsection 154ZG(1) stipulates that designated complaints must be assessed within 90 days of receipt by the ACCC. The ACCC must within that time give the complainant a notice advising either:
- no further action will be taken on the complaint: proposed paragraph 154ZG(1)(a) and proposed subsection 154ZH(1) or
- further action will be taken to deal with the complaint: proposed paragraph 154ZG(1)(b) and proposed subsection 154ZK(1).
No further action notice
Under proposed paragraph 154ZH(1)(a) the ACCC must provide reasons to a designated complainant if it deems a designated complaint does not comply with the mandatory content requirements.
The ACCC may provide reasons for taking no action on a complaint if:
- the complaint does not meet other content requirements: proposed subsection 154ZH(3)
- the complaint is the subject of another inquiry or action: proposed subsection 154ZH(4) or
- it is appropriate to take no further action on the complaint: proposed subsection 154ZH(5).
Further action notice
The ACCC may give a designated complainant a notice that it intends to take further action if it is satisfied that the complaint is about significant or systemic market issues and either, relates to a potential breach of the CCA, or the ACCC’s powers or functions under the CCA: proposed subsection 154ZK(1). Such a notice must set out the actions the ACCC intends to take: proposed subsection 157ZK(2).
The ACCC must commence the action specified in the notice within 6 months of giving notice and inform the designated complainant when the action is completed: proposed subsection 157ZK(3).
It is open to the ACCC to issue a replacement notice to a designated complainant if the ACCC considers it appropriate. According to the Explanatory Memorandum (p. 20) ‘this may occur where one or more of the proposed actions set out in the further action notice are no longer appropriate due to a material change in circumstances’. In addition (Explanatory Memorandum p. 21) the ACCC may issue a replacement notice that is, in effect, a no further action notice if the subject matter of the complaint is the subject of another investigation or it is appropriate to take no further action.
Proposed section 154ZM allows the designated complainant to withdraw the complaint before the ACCC issues a no further action notice , or notice that the proposed action is complete. Proposed section 154ZN stipulates that the ACCC must, as soon as practicable, publish notice of a range of actions, including:
- issuing a no further action notice or a further action notice
- issuing a notice that actions have been completed
- issuing a replacement notice
- withdrawal of a complaint.
Designated complainants
Proposed Division 3 sets out the process, and the powers of the Minister, for approving designated complainants.
Making an application
The application procedure is established in proposed section 154ZP of the Bill. It allows an entity[12] to make a written application to the Minister for approval as a designated complainant in the manner and form specified in proposed subsection 154ZP(3).
An entity includes an individual. The joint submission to Treasury representing 9 consumer‑focussed organisations, recommended that individuals should not be able to become designated complainants:
Given the resource implications this power can have for regulators, we believe it should be restricted only to organisations with appropriate governance arrangements rather than individuals. The draft legislation should be amended so that s 154ZE no longer includes “individuals” (p. 2).
Under proposed subsection 154ZP(4) the Minister may prescribe the period of time in which an application to become a designated complainant may be made in a designated complaints determination. A designated complaints determination is a disallowable legislative instrument, made by the Minister under proposed section 154ZZ and can prescribe any matters required or permitted under new Part XIE of the CCA.
The period of time for making an application may be a single period or a recurring period, and the determination may provide for the start or end date of the period or each period. According to the Explanatory Memorandum to the Bill (p. 7) this is ‘appropriate as the application period may need to change quickly to accommodate the operational requirements of the designated complaints function’.
Approving an application
Proposed section 154ZQ sets out the matters that the Minister must take into account when approving an application—specifically, the applicant’s experience and ability in representing the interests of consumers and/or small business, and be reasonably assured that the applicant will act with integrity. The designated complaints determination may also prescribe matters to which the Minister must or may have regard. Proposed section 154ZR allows the Minister to make the approval subject to conditions.
Once a decision has been made, the Minister must, under proposed subsection 154ZT(1) give notice to the applicant on the outcome of the deliberation about the application. Further, proposed subsection 154ZT(2) stipulates that if approval is granted, the Minister must give a copy of the approval to the ACCC and publish the name of the entity on the Department’s website. Any conditions of approval may also be published.
A designated complainant can apply under proposed section 154ZU to vary or revoke their status, and the Minister can grant this request according to proposed subsection 154ZV(1). Proposed section 154ZX requires the Minister to give notice, as soon as practicable, of decisions made on applications for approval to vary or revoke.
Proposed section 154ZV of the Bill enables the Minister to vary or revoke a complainant’s status if the Minister is satisfied that it is appropriate to do so. For the purposes of that decision, the Minister may have regard to:
- the factors that the Minister is required to consider when initially deciding whether to grant approval as a designated complainant: proposed paragraph 154ZV(3)(a)
- whether the complainant has contravened, or is contravening a condition to which the approval is subject: proposed paragraph 154ZV(3)(b)
- any matter prescribed in the designated complaints determination: proposed paragraph 154ZV(3)(c)
- any other matter the Minister considers relevant proposed paragraph 154ZV(3)(d).
Proposed subsections 154ZV(4) and (5) stipulate that if the Minister is proposing to vary or revoke the status of a designated complainant on the Minister’s initiative (rather than in accordance with an application by the designated complainant), then the Minister must notify the affected complainant and give reasons why this action is being proposed.