ACCC boss says competition will survive COVID-19 pandemic
Consumer watchdog ACCC has adjusted regulations for businesses, particularly small businesses during the Coronavirus pandemic, saying it will factor this into its consideration of competition matters.
The watchdog said the move will help companies remain viable in the long term and that any changes are temporary.
The 2020 Compliance and Enforcement Priorities will still remain and will enhance efforts to deal with businesses who will “exploit the crisis” and take advantage of its commercial position or harm consumers. ACCC will provide advice for businesses and consumers on consumer guarantees through its website and keep updating it as new issues emerge.
Its COVID-19 Taskforce is communicating directly with businesses to educate them on cancellations, refunds and suspension of services due to the coronavirus.
“We will also continue to raise awareness of COVID-19 scams, particularly as scammers adapt old methods to prey on new fears at a time when large parts of the community are already feeling vulnerable,” ACCC said in a statement.
‘Price gouging’ is one of the ACCC’s concerns, and while it is generally not illegal, if a business makes misleading claims about the reasons for price increases then it is breaching the Australian Consumer Law.
“In our enforcement activities, the ACCC will seek to minimise regulatory burden as far as possible, and will carefully consider the impact on businesses already under pressure when making decisions about the scope and timing of statutory notices for the production of information and documents. The ACCC will also minimise the use of compulsory examinations, and where they are necessary we will conduct them by phone or video conference,” said ACCC.
The ACCC will continue to consider proposed mergers but said it may extend timelines for reviews/applications if there are challenges in conducting and completing the necessary inquiries.
Speaking at the webcast of the Australian Financial Reviews Banking & Wealth Summit 2020, ACCC chair Rod Sims highlighted the critical role competition plays in boosting the economy post the COVID-19 crisis.
On the subject, ‘Will competition survive the current crisis?’, Sims said:
“My answer is it must, and it will. It must because an open, market economy is essential to the prosperity of all Australians, and such an economy depends for its success on robust competition … we get our goods and services at sensible prices not because of the supplier’s benevolence but due to their regard to their own self-interest. This only works if those suppliers face sufficient competition. This is self-evident,” said Sims.
“At a time of crisis such as in war or with a pandemic, where there is a common enemy to fight for the nation’s survival, and so a sense of national purpose, coordination is both efficient and carries little or no downside. But in normal times, without a common enemy, coordination leads to complacency, inefficiency and higher prices.”
He said it is important that short-term measures do not give rise to long-term structural damage to competition, market concentration or long-term arrangements that make it more difficult for businesses to enter and compete into the future.