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ACCC announces its 2022-23 Compliance and Enforcement Priorities – Franchising A Key Feature

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By Belinda Ozgun , Lawyer

The Australian Competition and Consumer Commission (‘ACCC’) has released its annual compliance and enforcement priorities for the year ahead, with a focus this year on a number of key areas including small business, environmental claims, the digital economy and consumer and fair trading issues arising from the COVID-19 pandemic.

Over the coming year, the ACCC is committed, amongst other things, to ensuring that small businesses receive the protections of the competition and consumer laws, including the Competition and Consumer Act, and the relevant industry codes of conduct, such as the Franchising Code of Conduct. Additionally, the ACCC will continue to focus on key consumer protections for small businesses, including unfair contract terms and consumer guarantees.

In his address to the Committee for Economic Development of Australia (‘CEDA’) on the eve of his retirement on 3 March 2022, the ACCC Chair, Mr Rod Sims, said that the ACCC continued “to see franchisees being harmed by conduct that potentially breaches both the Franchising Code and the Australian Consumer Law (‘ACL’).” He said, “Franchising is a business model where the franchisor dominates the relationship. We will continue to promote our educational work to make sure that franchisees and prospective franchisees make informed decisions about the risks unique to this business.”

Mr Sims went on to remind franchisors and “larger businesses” that where unlawful conduct is seen to be taking place and potentially causing harm to small businesses, the ACCC will not hesitate to take enforcement action, including litigation, which Mr Sims noted was an important element of the ACCC’s response to such issues. He spoke of the ACCC’S recent success in litigation against franchisors Jump Swim and Megasave and reminded the audience of the ongoing proceedings against the Retail Food Group.

Mr Sims, also spoke of the ACCC’s focus on the following areas in relation to consumer and fair trading priorities, which he said reflects what the ACCC is seeing now and the issues that it anticipates will continue to be of significance to the regulator:

  • businesses ‘greenwashing’ and falsely promoting environmental or green credentials to capitalise on consumer preferences;
  • manipulative or ‘dark pattern’ techniques being used in the digital economy to exploit or pressure consumers;
  • consumer and fair-trading issues arising from the COVID-19 pandemic, including in relation to refunds, credit vouchers and supply chain issues;
  • pricing and selling practices of essential services, including false and misleading advertising claims, with a particular emphasis on telecommunication and energy companies; and
  • compliance with consumer guarantees with a particular focus on high value goods such as motor vehicles and caravans and the relationship between motor vehicle dealers and manufacturers which may affect end consumers.

In addition to the above areas, Mr Sims addressed the following competition priorities for the year ahead:

  • supply chain disruptions and the importance of effective and competitive supply chains, particularly during the COVID-19 pandemic;
  • exclusive supply or acquisition arrangements by large and powerful firms with market power which impact competition;
  • anti-competitive conduct in the financial services sector, particularly in relation to payment services; and
  • the ACCC’s ability to enforce action to address systemic competition and consumer concerns in digital platform markets.

A full transcript of Mr Sims’ speech in relation to the above can be found here.

Whilst the 2022-23 priorities highlight the ACCC’s focus areas for the year, Mr Sims ended his speech by reminding his audience that the compliance and enforcement work of the ACCC is not limited only to the priorities as outlined. To prepare for the year ahead, businesses should ensure that they have strong compliance programs and practices in place and seek legal advice where necessary, not only in relation to the priorities highlighted by the ACCC, but across all aspects of competition and consumer law and the relevant industry codes.

If you require any legal advice or assistance with franchising and in particular, compliance with the Franchising Code of Conduct, please feel free to contact the MST Franchising team by email franchise@mst.com.au or by telephone +613 8540 0200.