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ACCC 2024-25 Compliance and Enforcement Priorities – Misleading and Deceptive Claims, and Pricing Concerns in the Supermarket and Essential Services Sector

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The ACCC’s compliance and enforcement priorities for the 2024-25 year were unveiled by the ACCC Chair, Gina Cass-Gottlieb, at the annual Committee for Economic Development of Australia Conference on 7 March 2024.

Although many of the ACCC’s priorities are the same as last year, this year the ACCC has specifically targeted sectors that affect the most Australians, namely the supermarket and essential services sectors.

The primary focus of 2023-24 are as follows:

Environmental and Sustainability claims

Greenwashing is when a business makes false claims about their positive environmental, sustainability and ethical practices to appeal to consumers.

The ACCC recognised that households are becoming more conscious of environmental and sustainability issues and rely on businesses to be truthful when making such claims.

The regulator has flagged that it will:

  • take enforcement action against companies that make false or misleading claims about its sustainability or environmental practices. This is most recently evidenced by the ACCC’s acceptance of an undertaking from MOO Premium Foods Pty Ltd that published claims about its packaging being made from “ocean plastic”; and
  • provide guidance as to how sustainability may constitute as a ‘public benefit’ in favour of granting an authorisation application for what may otherwise constitute as conduct that contravenes competition law.

Cost of living pressures

The most significant price increases in the last 12 months relate to housing, groceries and financial services.

In response to these findings, the ACCC will be prioritising:

  • the supermarket sector – in particular, misleading claims about discounts and pricing specials;
  • competition in the essential services sector (such as telecommunications, electricity, gas and financial services); and
  • compliance with the Gas Market Code which gas producers must comply with as of September 2023.

Digital economy

There will be a focus on consumer and fair trading issues in the digital economy.

Conduct that the ACCC will be monitoring includes:

  • misleading or deceptive advertisement practices by social media influences and price comparison websites; and
  • video games with the ability to make purchases within the game (including microtransactions). In particular, the ACCC has raised concerns that the target audience of video games are typically children who may be susceptible to targeted advertisements and features that encourage them to make in-app purchases.

In December 2023 the ACCC detailed findings of their sweep of social media influencers and online reviews, which found that 81% of content posted by social media influencers raised concerns of being misleading or deceptive.

Unfair Contract Terms

Unfair contract term provisions in the Competition and Consumer Act 2010 (Cth) were amended significantly, and such changes apply to standard form consumer and small business contracts entered into on or after 9 November 2023.

Standard form contracts which contain terms that constitute as being unfair would contravene the provisions, which now attracts significant penalties. You can read our article that summarises the important changes here.

The regulator has flagged that they are investigating several matters and are reviewing a range of standard form contracts to ensure compliance.

Consumer guarantees

Consumer guarantees is an enduring priority for the ACCC given that it is the issue that is raised the most by consumers. The delivery timeframe advertised by companies and the subsequent delay or non-delivery has been of particular concern.

On 4 March 2024 the ACCC commenced proceedings against Mosaic Brands Limited (the owner of women’s clothing brands including Noni B, Rivers and Katies) and alleges that Mosaic made false or misleading representations about delivery times for online purchases. 26% of orders were dispatched 20 days after the purchase date, and others were dispatched after 40 days.

In addition to the above, the regulator’s other focus areas will include:

  • deterrence and enforcement against anti-competitive conduct, such as resale price maintenance and misuse of market power;
  • ensuring that NDIS providers comply with Australian Consumer Law, given recent complaints received by NDIS recipients; and
  • product safety for young children – in particular nursery products.

The full script of Ms. Cass-Gottlieb’s speech is available on the ACCC’s website.

In light of the release of the ACCC’s compliance and enforcement priorities for the 2023-24 year priorities for all businesses, including franchisor’s should include:

  • a review of standard form contracts to identify and amend or remove potentially unfair contract terms;
  • a review of all statements and representations, especially in marketing collateral for false or misleading environmental and sustainability claims that could constitute greenwashing.

Takeaways

With the economy shrinking, the ACCC will be monitoring conduct of businesses to ensure that they are not engaging in anti-competitive conduct that could harm Australian households.

Businesses should ensure that they do not make any false or misleading claims in relation to:

  • their environmental practices
  • goods or services (i.e. delivery timeframes and ability to refund); and
  • pricing strategies.

Our Commercial & Franchising team can assist with the review and re-drafting of your standard business contracts, supply agreements, franchise agreements and provide guidance on complying with consumer and competition law that affect your business.

If you have any queries or concerns in relation to the above, please contact a member of our Corporate Advisory and Franchising Team on +61 3 8540 0200 or as follows:

Raynia Theodore on (03) 8540 0242 or raynia.theodore@mst.com.au

Louise Wolf on (03) 8540 0273 or louise.wolf@mst.com.au

Esther Gutnick on (03) 8540 0267 or esther.gutnick@mst.com.au