The federal government has released an exposure draft proposing to significantly increase the maximum penalties for violations of Australia’s competition and consumer laws.
in a nutshell
On 18 August 2022, the Federal Government announced for consultation: Ministry of Finance Act Amendment (Competition and Consumer Reform No. 1) Bill 2022: More Competition, Better Prices.
Exposure Draft legislation significantly increases maximum penalties of over A$50 million per offense for companies engaging in anti-competitive conduct (including, for example, cartel violations, abuse of market power and monopoly trading) We aim to Competition and Consumer Law 2010 (CCA) and Australian Consumer Law (ACLs).
Penalties for competition and consumer law violations in Australia have increased rapidly in recent years, particularly in the context of consumer law violations, resulting in an almost 50-fold increase in maximum penalties per violation over five years. (Draft bill passed).1
The proposed amendments are a significant step forward in the continuing increase in penalties for violations of Australia’s competition and consumer laws. This will bring Australia’s penalties system more in line with major international jurisdictions such as the EU and the US.
The bill proposes to significantly increase the maximum penalties applicable to CCA and ACL violations.
- AUD 50 million (up from AUD 10 million);
- If the court can determine the value of the profits made – 3 times the value of the profits (no change).When
- If the court cannot determine the value of the profits made – 30% of the company’s “adjusted turnover”2 During violation rotation period3 In case of violation (up from 10% of the annual turnover of the corporation in the 12 months preceding the act or omission).
The bill also proposes increasing the fine limit from A$500,000 to A$2.5 million for individual offenses.
The bill would introduce equal penalties for violations of CCA Part IVBA (Compulsory Bargaining Provisions for News Media and Digital Platforms) and Part XICA (Electric Power Industry), and would also increase maximum penalties for violations of “competition rules.” I am proposing. Part XIB. Applies to companies and individuals in the telecommunications industry.
The government recently completed a short consultation period on the bill, ending on 25 August 2022.
Assuming the bill was enacted by parliament, the increase in penalties would begin the day after the bill received the King’s assent. In particular, updated penalties apply only in relation to violations occurring at or after the commencement of the law.
The proposed amendments fulfill part of the government’s ‘better competition’ election pledge to strengthen Australia’s competition laws. As part of this commitment, the Government has also introduced proposed amendments to introduce fines for unfair contract terms and the Australian Competition and Consumer Commission to expedite an investigation into issues that may undermine Australians. indicated support for the introduction of a “super complaint” feature within. ‘Consumer Rights.
For more information on the proposed changes to the Unfair Contract Terms regime, see Overview.
This article was produced in collaboration with Leandros Pandoulis.
1 Prior to September 2018, the maximum penalty per ACL violation was AUD$1.1 million.
2 In the draft, ‘adjusted turnover’ means the sum of the value of all supplies made by a corporation or related corporations in relation to an Australian indirect tax zone.
3 Violation Sales Period provides a formula for determining the period for the purpose of evaluating Adjusted Sales. The violation termination period generally begins at the beginning of the month in which the act, omission or violation occurred or began to occur and ends at the end of the month in which the entity ceases to act, omission or violation. The minimum severance period for violations is 12 months.