Chapter 2Views on the bill
Stakeholder views on the bill
2.1The committee received 11 submissions on the bill. Submitters were overall supportive of the proposed complaints mechanism and identified benefits that such a mechanism could bring for small businesses and consumers.
2.2Some submitters made suggestions for change to the bill. The most frequent subject of these suggestions was the circumstances under which the regulator would have the discretion or would be required to take no further action in response to complaints.
2.3Other comments from submitters related to timeframes for action, potential resourcing impacts on the ACCC, consultation with industry, post-implementation review of the mechanism’s operation, and definitions of certain provisions under the bill and the Competition and Consumer Act 2010.
Support for the designated complaints mechanism
2.4Submitters broadly supported the introduction of a designated complaints mechanism. A number spoke about the benefits that such a mechanism would bring for the industries they represented.
2.5The Australian Food and Grocery Council supported the complaint system proposed by the bill, envisaging the initiative would be well received in the food, beverage and grocery manufacturing sector.
2.6The Mortgage and Finance Association of Australia supported the bill, noting their belief that it would provide an important formal channel by which they and other organisations could bring attention to issues which negatively affect members and customers.
2.7Australian Chamber of Commerce and Industry (ACCI) was supportive of the bill and proposed mechanism, noting there is currently no formal or specific mechanism for small businesses or consumers to lodge complaints to which the ACCC is obliged to respond.
2.8The National Credit Providers Association supported the bill and the establishment of a designated complaints function, noting that it could be an important step in dealing with issues such as de-banking.
2.9The Western Australian Small Business Development Corporation strongly supported the proposed bill and stated that the proposed amendments to the Competition and Consumer Act 2010 would empower small business advocates, expedite the assessment of significant market issues, and fast-track recommendations for investigation or action.
No further action notices in response to complaints
2.10The proposed power of the ACCC to issue a ‘no further action notice’ after investigating a complaint was the subject of several submissions. These submissions suggested modifying the circumstances under which ACCC would have the discretion, or would be required, to take no further action in response to a complaint from a designated complainant.
Widening the circumstances under which no further action is taken
2.11Some submitters made suggestions that the bill should prescribe a wider range of circumstances in which the regulator either would be required to take no further action or would have the discretion to take no further action. Several suggestions related to the ACCC taking no further action where a complaint’s subject matter has been, or is being, examined through other processes.
2.12The National Insurance Brokers Association suggested that where a complaint has been subject to an inquiry or review within the past two years, the ACCC should be required to take no further action, or otherwise provide reasoning as to why the subject requires re-examination.
2.13Additionally, they suggested that the mandatory criteria for designated complaints should include a consideration of whether the subject of the complaint is substantially the same as a complaint already reviewed by the ACCC. They argued this would prevent repetition of complaints.
2.14The Insurance Council of Australia noted their support for changes made in the legislation introduced to the Parliament compared to the exposure draft. They also suggested several circumstances in which no further action would be required, and advocated for an expanded consideration of the types of previous inquiries which have examined the same subject matter as a complaint. Specifically, they argued that the ACCC should be required to take no further action where a complaint is, or has been within the last two years, the subject of an inquiry by bodies such as the Australian Securities and Investments Commission, the Small Business and Family Enterprise Ombudsman, or relevant industry code governance committees.
2.15The Insurance Council of Australia also made several suggestions for discouraging vexatious or unnecessary complaints:
no further action should be required where a complaint is substantially similar to previous complaints;
a prerequisite of making a genuine attempt to resolve complaints though existing dispute resolution bodies, before making a designated complaint, could be introduced;
criteria could be introduced for the revocation of a designated complainant’s approval, where the designated complainant has made at least three designated complaints within a year that either do not meet the mandatory content requirements, or in response to which the ACCC has issued no further action notices.
Narrowing the circumstances under which no further action is taken
2.16Conversely, some submitters made suggestions that the bill currently allows the regulator too much discretion when determining whether to take no further action in response to complaints.
2.17Mr Ray Steinwall suggested that proposed subclauses 154ZH(5) and (6), which would give the ACCC a broad discretion to take no further action regarding complaints where the ACCC is satisfied that it is appropriate to do so, are unnecessary and could be removed. He argued that it would not be appropriate for the ACCC to reject a complaint that meets the mandatory criteria and to which other grounds for rejecting such a complaint do not apply.
2.18On the other hand, the Consumer Action Law Centre (CALC) suggested that that subclause 154ZH(5) could better serve the purpose that subclause 154ZH(4) is intended to serve. Subclause 154ZH(4) would give the ACCC a discretion to take no further action where the subject matter of a complaint has been the subject of another inquiry within the past two years.
2.19The CALC asserted that subclause 154ZH(4) could have a chilling effect on the work of government, and that litigation or class actions could potentially be used to exclude designated complaints to the ACCC. They considered that subclause 154ZH(5) could serve the purpose of avoiding duplicate work where a complaint has been dealt with previously by another inquiry or similar process.
2.20The CALC argued that, under subclause 154ZH(4), perverse incentives could arise for consumer groups to delay commencement or withhold from commencing reviews and inquiries where these actions could exclude the subject matter from being considered through the designated complaints mechanism.
2.21The CALC suggested an alternative to subclause 154ZH(4) for taking no further action could be where the ACCC is satisfied that the outcome of the inquiry or action has, or is reasonably likely to have, fully addressed the issue raised in the designated complaint. They also suggested this could apply where the outcome of another inquiry would be substantially the same as if the ACCC accepted and actioned the designated complaint.
2.22The CALC also identified that where issues are systemic, it is common that multiple avenues for ventilating such issues are explored. The CALC considered that these could be complimentary ways of resolving significant issues, and that the other inquiry mechanisms should not be treated as substitutable with the designated complaints mechanism.
Limitation on the number of designated complainants and designated complaints
2.23Submitters also raised concerns that limits on the number of designated complainants and designated complaints may be too restrictive. The Council of Small Business Organisations Australia (COSBOA), the Australian Automotive Dealer Association (AADA), and the ACCI all indicated that such limitations may operate contrary to the policy intent of the bill.
2.24The COSBOA expressed concern about the Minister’s discretion to limit the number of designated complaints and designated complainants. They considered that ‘to limit the number of complaints that can be deemed as designated complainants will restrict the intent of the scheme and is likely to result in abuse’.
2.25The AADA expressed their belief in the importance of designated complainants being able to bring complaints on behalf of small business members, noting the Minister’s discretion to limit the number of designated complainants and designated complaints. AADA supported industry having the opportunity to bring complaints on behalf of their small business members and indicated that designated complainants should not be limited to consumer bodies.
2.26The ACCI expressed concern that a cap on number of designated complainants could potentially limit the effectiveness of the mechanism. They envisaged that these limits may result in a ‘first in, best dressed’ approach and only groups approved in the first year may become designated complainants.
2.27The CALC expressed concern that the broad discretion in clause 154ZZ could allow the Minister to determine that zero designated complainants and zero designated complaints should be allowed. The CALC argued that a minimum number of designated complainants and designated complaints should be legislated. They noted that such a minimum would not require that a minimum number of complaints and complainants actually be made or approved. Rather, it would mean that a designated complaints determination could not prescribe fewer designated complainants or designated complaints than the minimum.
Guidance where other agencies are better placed to handle complaints
2.28Mr Ray Steinwall noted that where the subject matter of a complaint is suitable for investigation by an agency other than the ACCC, the ACCC would be unable to refer the matter to the other agency. Accordingly, he suggested that the contents of a no further action notice could contain guidance regarding whether the ACCC considers another agency better placed to handle a complaint.
Timeframes for action
2.29Some submitters were concerned about the proposed timeframes for the ACCC to investigate complaints and determine whether to take action, particularly where complaints relate to industries with potentially complex operational relationships.
2.30The COSBOA stated that the 90-day timeframe for the ACCC to investigate and notify designated complainants would be inadequate because small businesses could experience damage during that period which would need to be minimised. COSBOA suggested a shorter timeframe of 30 days.
2.31The AADA noted the proposed time limit for investigations may be insufficient for the ACCC to undertake comprehensive investigations.
2.32The National Insurance Brokers Association suggested that a 90-day timeframe is unlikely to be sufficient, given there is a requirement for thorough and rigorous investigation processes.
2.33The Insurance Council of Australia suggested that the ACCC should be able to issue interim notices advising that further investigation is being undertaken where the ACCC is unable to reach a decision on further action within 90 days.
Potential resourcing impacts
2.34The designated complaints mechanism would require the ACCC to devote resources to processing and investigating complaints.
2.35The National Insurance Brokers Association noted that the proposed mechanism is intended to be budget-neutral but raised a concern that the ACCC may not be adequately resourced to handle complaints. They highlighted the importance that a diversion of resources from the ACCC’s other enforcement activities must neither adversely impact its current functions nor create a two-tiered system under which the handling of designated complaints is insufficiently resourced.
Consultation and provision of information for participants
2.36The AADA supported developing the complaints mechanism in consultation with industry. They expressed concern about issues arising if the mechanism is not developed through industry consultation, noting the importance of ensuring that designated complainants and industry are aware of obligations. The AADA believed industry would need to be allowed to provide input into the mechanism, noting the complexity of industries such as the automotive industry, and the power imbalance between car manufacturers and car dealers.
2.37Submitters supported provision of information for the benefit of participants in the system. The COSBOA suggested that small businesses need to be given sufficient notice and information about the prescribed timeframe for becoming designated complainants, so that these businesses can be aware of the process and can ensure they can protect their interests and advocate for themselves.
2.38The ACCI supported publication of operational guidance for the complaints mechanism to reduce the likelihood of inappropriate complaints being made. They suggested that such guidance could outline the requirements for becoming a designated complainant and distinguish Australian Consumer Law matters from matters under other legislation which would not be appropriate for this mechanism.
Post-implementation review
2.39Some submitters argued in favour of a requirement to conduct a review of the mechanism after it has commenced operation. The suggested timeframes for such reviews varied among submitters.
2.40The ACCI supported a review being undertaken 18 months after the commencement of the system, identifying whether the resourcing for this mechanism is appropriate, and whether the scheme could be expanded.
2.41The Insurance Council of Australia expressed their preference for a formal post-implementation review to be held within three years following the regime’s establishment.
2.42The National Insurance Brokers Association echoed this, submitting that a review of the regime would be important to identify any unintended consequences, and that such reviews should be periodic, and commence no later than three years after the commencement of the regime.
Definitions of terms
2.43Some submitters identified potential challenges that could arise regarding the definitions of terms under the bill and the Competition and Consumer Act 2010.
2.44The CALC identified that the term ‘systemic market issue’ does not refer to consumer detriment, only current market disruption, which may significantly limit the number of eligible designated complaints. They also identified that issues may be significant or systemic where they impact vulnerable consumers, even if the number of consumers affected or losses realised are relatively small.
2.45The CALC pointed to ASIC’s Product Intervention Order under Part 7.9A of the Corporations Act 2001 as best practice for considering consumer detriment, and suggested consideration of non-financial detriment and likely future detriment should be incorporated.
2.46While Mr Ray Steinwall supported the introduction of the bill and stated policy aims behind its introduction, he identified some potential issues that could arise with the definition of terms as a result of the bill, in particular ‘market’, ‘systemic’, and ‘consumer’. He noted that the ACCC would be required to reject complaints that do not satisfy criteria listed under subclause 154ZK(2), and argued that the bill does not adequately define these criteria which would be critical for designated complainants and the ACCC.
2.47Mr Steinwall identified that the meaning of the term ‘market’ in the new Part XIE would be defined under the existing section 4E of the Competition and Consumer Act 2010 and noted that this would give the term ‘market’ a very specialised meaning. He argued this would pose several problems, namely:
determining whether a complaint relates to a ‘market’ issue would be difficult for the ACCC and nearly impossible for designated complainants;
the definition of ‘market’ is largely not relevant to the Australian Consumer Law, so a majority of complaints regarding terms under the Australian Consumer Law would not relate to a relevant ‘market’ issue;
in determining its response to a complain under this mechanism, the ACCC would already be required to consider whether a complaint relates to a potential breach of the Act, or relates to the ACCC’s powers or functions, meaning use of the term ‘market’ would be unnecessary.
2.48Mr Steinwall also noted that there are equivalent criteria under the UK’s ‘super complaints’ system, but that the UK legislation does not require the Competition and Markets Authority, the relevant competition regulator, to determine complaints strictly according to these criteria. He asserted that, in practice, the term ‘market’ is treated more liberally by the Competition and Markets Authority.
2.49Mr Steinwall observed that the mandatory content requirements mean complaints must relate to a ‘significant’ or ‘systemic’ market issue. He identified that the definition of ‘systemic’ is not present in the bill, although the intended definition is suggested in the EM. He argued that courts have interpreted the term ‘systemic’ narrowly to relate to internal methods of working, and that this sense of the term ‘systemic’ in the mandatory content requirements may not be intentional. He suggested that if ‘systemic’ is intended to be used in the sense of ‘scale’ when describing complaints, the term ‘systemic’ could be removed from the criteria for determining complaints.
2.50Mr Steinwall also submitted that the definition of the term ‘consumer’ in the new part XIE would be covered by the existing section 4B of the Competition and Consumer Act 2010. He argued that the section 4B definition would not be suitable for this mechanism because it would cause difficulty for designated complainants in determining whether individuals meet the definition of ‘consumer’, and because designated complaints are intended to relate to conduct which impacts consumers broadly rather than individual cases.
2.51Mr Steinwall also suggested two other amendments would clarify the impact of this bill. Namely, he suggested amending existing provisions in the Competition and Consumer Act 2010 regarding seeking adverse costs orders and relating to the ACCC’s power to gather information.
2.52He noted that the existing subsections 82(3) and (5) deal with court orders that certain applicants seeking damages are not liable for the respondent’s costs. He suggested that subsection 82(5) be amended to explicitly recognise that such an order could be made in relation to matters that are the subject of a complaint under the new Part XIE.
2.53Mr Steinwall also pointed to the ACCC’s power to gather information under paragraph 155(2)(b). He suggested that the ACCC’s power to gather information in relation to the new Part XIE could be made explicit by amending the existing paragraph 155(2)(b) to include complaints made under the new Part XIE.
Committee view
2.54The committee welcomes the government’s ongoing efforts to reform competition law and policy, including increasing consumer protections against unfair contract terms, increasing penalties for breaches of competition and consumer laws, initiating reviews of the supermarket sector, and providing funding to develop price comparisons and competition policies.
2.55The committee is encouraged by the level of support for the bill and the proposed operation of the designated complaints mechanism and appreciates the views and level of detail provided in submissions.
2.56The committee endorses this bill as a means of empowering consumer and small business advocates to raise systemic and significant market issues to the ACCC for response in a timely and transparent way. The committee believes that the bill would ensure that such issues will be considered by the regulator and acted on where appropriate.
2.57The committee agrees with inquiry participants that the designated complaints mechanism will support greater competition and improved outcomes for consumers and small businesses and will be a convenient tool to support small business and consumer groups through a mechanism that acknowledges the unique and insightful assistance they can provide the ACCC.
2.58The committee supports the measures in the bill which would ensure this complaints mechanism is transparent, trustworthy, and results in timely action from the regulator.
2.59The committee acknowledges views regarding the caps on the number of complainants and complaints, which will be set in legislative instrument. These caps support effective resource allocation within the ACCC. Setting caps in a legislative instrument allows future flexibility in the operation of the mechanism.
2.60The committee supports ongoing consultation between the government and small business and consumer groups during the implementation of the bill and on the designated complaints determination to ensure its wide benefits can be truly realised. The need for a post implementation review should be considered once a meaningful amount of data on the operation of the mechanism is available.
2.61The committee recommends that the bill be passed.
Senator Jess Walsh
Chair