Competition and Consumer Act
Swinburne University of Technology is committed to compliance and ensuring that its conduct and operations comply with the Competition and Consumer Act (CCA). The CCA (Which includes the new “Australian Consumer Law”) is designed to promote competition and to protect consumers.
What does the CCA cover?
Almost all aspects of the marketplace: the relationships among suppliers, wholesalers, retailers, competitors and customers. In particular it covers anti-competitive conduct between businesses, unfair market practices, misuse of power in the market place, criminal cartels, mergers and acquisitions of companies, product safety, product labelling, price monitoring, and the protection of consumers from unscrupulous behaviour.
Swinburne operates in a highly competitive market with the provision of educational services to our students and in its business dealings with suppliers, competitors and research partners. It is important that all staff familiarise themselves with the CCA and gain an understanding of how it relates to their University activities. It is obviously of vital importance to staff involved in sales and marketing of University products and services.
Failure to comply may result in significant penalties, fines, damages (including compensation to victims) and other adverse consequences (including harm to reputation and down time) to both the University and its staff. Penalties can be substantial for organizations and individuals (including employees). Imprisonment may also apply for certain ‘cartel’ conduct.
The below information provides a brief outline of the main aspects/provisions of the CCA likely to have an impact on the University and its staff. It is by no means comprehensive and is an area of law that is highly technical and complex. Staff are strongly encouraged to seek advice from Swinburne Legal if they have any doubts or questions.
Further information can be found at the following websites:
Australian Competition & Consumer Commission
Consumer Affairs Victoria
For queries on the Competition and Consumer Act or The Australian Consumer Law, please contact Swinburne Legal.
For enquiries regarding internal Competition and Consumer Law Training contact Miranda Addison, University Risk and Compliance Officer, Governance & Assurance Unit.
If the ACCC contacts you refer the matter directly to Swinburne Legal.
Introduction
The CCA is administered by the Australian Competition and Consumer Commission (‘ACCC’). The ACCC is responsible for enforcing the CCA, promoting competition/fair trade and protecting consumers against unfair business practices.
The broad objectives of the CCA are to:
- promote competition among businesses;
- promote fair trading by businesses;
- provide for the protection of consumers in their dealings with businesses.
The University is a business and therefore many of its dealings are subject to the CCA.
Anti-Competitive practices and agreements between businesses
The CCA prohibits anti-competitive practices (also referred to as restrictive trade practices) by business. Anti-competitive practices are practices that restrict free trade.
This type of conduct includes:
- any agreements which substantially lessen competition;
- any agreements between competitors regulating the prices at which they will buy from suppliers or sell to customers (eg. Price fixing);
- agreements between competitors limiting their freedom to buy from particular suppliers or sell to particular customers (eg. Exclusive dealing).
The Act also prohibits unconscionable conduct (taking unfair advantage) in commercial and consumer transactions.
Note: ‘agreements’ can include arrangements or understandings whether in writing or not. A breach of the act may include any communications with another person from which each person has an expectation of how the other will act. It may be written or oral, legally enforceable or unenforceable or express or implied from the circumstances e.g. a "nod and a wink" is sufficient. Casual conversations even in a social context can breach the act particularly if the conversation is with a competitor. Accordingly when encountering competitors at social functions, industry meetings, trade nights etc be careful not to make anti competitive agreements and arrangements or discussion as this may give rise to allegations of price fixing.
Be aware of the warning signals during meetings, correspondence, and discussions with a competitor. Particularly when communicating with a competitor:
- regarding fees, costs, pricing;
- regarding other competitors;
- relating to dealings with third parties;
- relating to allocation of territory; and
- with an expectation of how the other party will act (remember a "nod and a wink" is enough)
Price fixing, market sharing and other anti-competitive conduct between competitors – e.g. cartels
Businesses must not agree on a scheme to regulate prices they will charge. Price fixing applies to any scheme which affects the cost of goods or services to a customer, including discounts, allowances, rebates, payments, and commissions and credit terms. If you fix prices or simply try to fix prices with a competitor, you have breached the Act, irrespective of the effect on the competition. Where competitors agree they will not compete genuinely with each other for particular tenders (allowing one competitor to win the tender) is also unlawful. These arrangements are often referred to as cartels. New legislation provides for possible imprisonment for persons involved in certain cartel conduct.
In essence, you should avoid any kind of collusive conduct with your competitors which would negatively affect competition such as:
- make decisions about price of goods or services independently of your competitors;
- compete genuinely in any tender processes;
- make decisions about which customers you will deal with and the terms on which you will deal with them independently of your competitors.
Exclusionary Provisions - also referred to as Primary Boycotts or Collective Boycotts
These are agreements between persons in competition with each other which exclude or limit dealings with a particular supplier or customer or a particular class of suppliers or customers.
Exclusive Dealing
Exclusive dealing is when goods or services are sold to a customer on the understanding that the customer:
- will not buy any similar goods or services from other suppliers; or
- will not resupply the goods or services to particular persons or in particular places
Or if we refuse to supply goods or services because the customer will not comply with these conditions.
Some exclusive dealing arrangements are illegal. Otherwise exclusive dealing conduct will be unlawful if it has the purpose or likely effect of substantially lessening competition. If you are considering an exclusive dealing contact Swinburne Legal for advice.
Third Line Forcing
Third line forcing is the practice of providing goods or services to a person on the condition that the person buys another product from a third person. It also includes offering a discount or rebate on the condition that the customer or student buys another product from a third person. You may recommend the product of a third person to a customer or student but you must not force such a product on a customer or student.
Resale price maintenance
Suppliers, manufacturers and wholesalers cannot specify a minimum price for the resale of their goods and services. They can suggest a recommended retail price.
Misleading and Deceptive Conduct
Businesses cannot engage in any conduct likely to mislead or deceive the consumer. They are required to tell the truth and not give a false impression. Failing to disclose important material information may amount to misleading or deceptive conduct. Often misleading and deceptive conduct arises by giving incorrect impressions in advertising, promotional or marketing material. This can occur by leaving out important facts, telling half truths, ambiguities, making inaccurate predictions, or exaggeration.
Test whether what or not something is misleading or deceptive:
- is what is said true?
- do statements made about our products and services convey a truthful impression to a person who knows nothing about the University?
- have you given the consumer all of the relevant facts?
- do you need to add anything, such as a qualification, to ensure that what you have said is not misleading or deceptive?
- can you keep the promises you made?
- could what you have said have more than one meaning?
To prevent misleading and deceptive behavior, explain things clearly, always tell the full story, don’t guess answers, avoid using technical jargon and make sure the customer understands what you are saying.
Make sure the intended audience knows what you are comparing, if the actual normal use of the product is not the basis for the comparison; make sure the audience is aware that this is the case. Remember who the audience is. Who is your target audience and how will they interpret the statements being made?
Avoid claims that cannot be verified – words such as ‘best’, ‘most’, ‘lowest’, ‘highest’, ‘only’ etc. Don’t use them unless you can prove customers actually receive what the words imply, i.e. it can be demonstrated that the product is the ‘best’. Make sure you compare products accurately if you make comparisons with another university’s products and services. Don’t create false impressions by eliminating important information when comparing products and services. When advertising ensure all parts of the advertisement are accurate. Break down advertisements to ensure each claim is correct, both literally and when the advertisement is taken as a whole.
Inaccurate Statements and Representations
In addition to not engaging in false or misleading conduct, The following specific types of false claims are illegal:
- the standard, quality, value, grade, composition, style model or history of goods or services;
- the agreement of a particular person to acquire the goods;
- the sponsorship, approval, performance characteristics, accessories, uses or benefits of goods or services;
- the sponsorship, approval or affiliation of a corporation;
- the price of goods or services;
- a buyer’s needs for goods and services; and
- the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.
Unconscionable conduct in commercial transactions
Businesses are not allowed to use their superior bargaining power in a harsh or oppressive way when dealing with other businesses or customers. This may be unconscionable conduct.
Authorisation and Notification processes
Authorisation - The ACCC has the power to authorise some restrictive trade practices which are otherwise prohibited, provided that an application for authorisation has been made to it and it is satisfied that the public benefit from the arrangements or conduct outweighs any public detriment.
Notification - A business may file a notice with the ACCC and obtain statutory protection in relation to conduct which amounts to Exclusive Dealing. The conduct is protected whilst the notification is in force, but the ACCC can withdraw protection at any time if satisfied of an anti-competitive effect and lack of appropriate public benefit.
Dealing with the ACCC
The ACCC administers the CCA. It has offices in each State and Territory of Australia. It can investigate complaints and commence legal actions for breaches of the Act and can approve certain conduct likely to breach if it will benefit the public. It has very strong powers of inquiry and investigation.
How do I respond if contacted by the ACCC?
If you are contacted by the ACCC do not provide any information, documents or answer any questions without first consulting Swinburne Legal. Be polite and show a willingness to cooperate. You can say something along the following lines – “I am happy to assist, but we have procedures we have to go through before dealing with regulatory bodies. I’ll need to refer this to the University Solicitor and someone from that office or myself or another person will then contact you”.
If there is a complaint or you suspect unlawful conduct
If you receive or hear an allegation or complaint about any of the above issues, report it immediately to your supervisor and Swinburne Legal.
If you know, suspect or have any doubts that any conduct engaged in by the University or by any individual associated with the University could amount to a contravention of the CCA, immediately notify your supervisor and Swinburne Legal.
