Individuals will face up to $2.5 million per breach (increased from $500,000) — and criminal sanctions of up to 10 years’ jail for cartel conduct will continue to apply.

While the government has not yet provided further details on its ‘Super Complaint’ proposal, it released a media release in late July 2022 confirming that it is committed to introducing UCT legislation in the upcoming parliamentary sitting period.

According to a recent update from Marque Lawyers partner Hannah Marshall, the rationale is that increased competition ultimately reduces pricing for consumers.

VIEW ALL

“Australian competition and consumer law penalties have historically been pretty woeful on the international stage. Increasing penalties is a good move on that front; the increased maximums should give us some more street cred with the Five Eyes international competition regulator collab,” she said in a recent statement.

“That said, if enacted, it will take a while for the penalties to filter through the courts and give us some real numbers to throw around by way of scary deterrent. This move smells like a tick on someone’s ‘quick win’ list. We’d love to see it backed up with some deeper thinking on competition policy, covering the dominance of business ecosystems and the true meaning of consumer welfare in the face of the environmental crisis.”

In conversation with Lawyers Weekly, K&L Gates partner Ayman Guirguis explained how the new policy would affect lawyers working in this space — and said that “significant” changes could be expected.

“Prior to the election, the Labor government had announced three key areas of focus for its competition and consumer law policy, including increasing maximum penalties from $10 million to $50 million for anti-competitive behaviour; introducing a ‘Super Complaints’ function within the Australian Competition and Consumer Commission (ACCC); and making unfair contract terms (UCT) illegal and broadening the coverage of the UCT regime to capture businesses with less than 100 staff or an annual turnover of less than $10 million.

“[This is] compared with the current UCT regime which captures small business contracts where the small business has less than 20 employees and the value of the contract is less than $1 million (if it is more than 12 months) or otherwise is less than $300,000.”

Currently, non-compliance with the UCT regime is not a breach of the law, rather a court can make orders to declare that UCT clauses are void and unenforceable.

According to Mr Guirguis, there are two main takeaways for lawyers here.

“The first is the importance of penalties as a vehicle for deterrence and hence the need for businesses to ensure they have systems and processes in place to ensure compliance with the CCA, including the ACL.

“The risk of such increases in penalties also reinforces the need for, and importance of, all businesses having effective competition and consumer law compliance programs, including training of staff and empowering staff to ask questions seeking legal advice to ensure that proposed conduct and terms of agreements are compliant with the CCA,” he said.

“The fact that the government also proposes to provide for a ‘Super Complaints’ regime under which the ACCC will be required to respond to, and investigate, complaints by designated advocacy groups, again reinforces the need for compliance with the CCA/ACL.”

This regime will likely also result in an increase in investigations, Mr Guirguis added, particularly in the consumer law space, as well as an increase in market studies by the ACCC, including into whether market “failures” have occurred. The second takeaway for lawyers, he added, is to get your business’ “contracting house in order”.

“The fact that there will be a significant expansion of the UCT regime, together with penalties being available for non-compliance, means that corporations need to review their standard form contracts to ensure compliance with the UCT regime. 

“It is also possible that a breach of the UCT provisions will be subject to the same maximum penalties as the other ACL breaches referred to above. This further reinforces the importance for corporations whose contractual counterparties include individuals and the abovementioned small businesses, to undertake an audit of standard form contracts which they enter into; ideally review all of these contracts, but at the very least, commence by reviewing the contracts that are ‘core’ from a business perspective and those more likely to result in disputes with counterparties; and to ensure that the risk of non-compliance with the UCT regime is low,” Mr Guirguis explained.

“Corporations also need to remain vigilant as to what may amount to an UCT, as these terms are interpreted by courts in various ongoing matters and are changing.”

This means a number of things moving forward, Mr Guirguis concluded.

“Competition lawyers in private practice will need to keep up to date with the changes and what they mean for their clients,” he said.

“In-house counsel will need to start taking steps immediately to make sure their organisation continues to be compliant with competition and consumer laws or risk having the organisation subjected to greater penalties than before.”