On 3 March 2022 the Australian Competition and Consumer Commission (‘ACCC’), the agency responsible for enforcement of competition, consumer and product safety laws in Australia issued its 2022/23 Compliance and Enforcement Policy and Priorities[i]. Reflecting current and emerging issues in consumer protection, fair trading, competition, infrastructure and product safety, the ACCC’s priorities for 2022/23 include a focus on manipulative or deceptive advertising and marketing practices in the digital economy, environmental claims and sustainability[ii].
With consumers reporting losses during 2021 of $99 million to cryptocurrency investment scams advertised on digital platforms[iii] the ACCC has already taken legal action to address this issue. On 18 March 2022 the ACCC commenced Federal Court proceedings against Meta Platforms, Inc. (owner of Facebook) and Meta Platforms Ireland Limited (jointly referred to as ‘Meta’) for alleged breaches of the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act).[iv]
The ACCC is alleging that Meta engaged in false, misleading or deceptive conduct by publishing scam advertisements promoting investment in cryptocurrency or money-making schemes and featuring prominent Australian public figures who had never approved or endorsed them. The ACCC alleges that Meta is responsible for these ads that it publishes on its platform as it is Meta’s technology which enabled the ads to be targeted to users most likely to engage with the ads and that Meta should have done more to “detect and then remove false or misleading ads on Facebook, to prevent consumers from falling victim to ruthless scammers”[v]. Substantial revenue is generated for Facebook from visits to the landing pages of these ads.
ACCC Compliance and Enforcement Priorities for 2022/23
The 2022/23 ACCC Compliance and Enforcement Priorities set out the areas which will be the subject of ACCC scrutiny in 2022/23. In addition to the ACCC’s enduring priorities (such as cartel and anti-competitive conduct and product safety), the ACCC’s key areas of focus include:-
1. Consumer and fair-trading issues relating to manipulative or deceptive advertising and marketing practices in the digital economy. In particular, conduct aimed at exploiting or pressuring consumers, “and other practices that seek to distort or disregard their consumer choice in the digital economy”[vi]. Examples include false scarcity warnings/reminders (such as low-stock warnings and false sales countdown timers) as well as “targeted advertising using a consumers’ own data to exploit their individual characteristics, pre-selected add-ons, and design interfaces that discourage unsubscribing”[vii];
2. Consumer and fair-trading issues in relation to environmental claims and sustainability. The ACCC recognises consumers’ increasing awareness and consideration of the environmental impact of products and services they buy. The ACCC will be focusing on businesses making environmental and sustainability claims – such as claims about consumer goods, manufacturing (including process and costs), the energy sector, and carbon neutrality.
3. Consumer and competition issues relating to digital platforms.
4. Consumer, fair trading and competition issues arising out of the COVID-19 pandemic. In the competition area, the ACCC’s focus will be on those businesses which seek to take advantage of the situation caused by COVID-related supply shortages (including of fresh food, groceries, clothing and medication) to fix prices or share markets.[viii]
5. Consumer and competition issues arising from the pricing and selling of essential services, with a focus on energy and telecommunications.
6. Industry compliance with consumer guarantees provided under the Australian Consumer Law, with particular focus on motor vehicles and caravans.
ACCC Compliance and Enforcement Strategy
While the ACCC is unable to pursue all matters that come to its attention neither is the ACCC’s compliance and enforcement work limited to these priorities. Rather, the ACCC exercises discretion to direct resources to matters that provide the greatest overall benefit for the consumer and competition[ix] while also prioritising matters which come within the current priority areas. In addition to matters which come within the current priority areas, particular consideration is also given to matters which involve other priority factors such as:-
- conduct that is of significant public interest or concern;
- conduct that results in substantial consumer or small business detriment;
- national conduct involving large traders – with the potential for greater consumer detriment;
- conduct involving a significant new or emerging market issue;
- whether the ACCC’s action will assist to clarify aspects of the law or new provisions of the Competition and Consumer Act 2010.[x]
ACCC compliance and enforcement tools
The ACCC has available a range of compliance and enforcement tools to encourage compliance with the Act, from which the ACCC selects according to which tool(s) will assist it to achieve the best outcome for the community while managing the risk proportionately.[xi]
To achieve its compliance objectives the ACCC uses “four flexible and integrated strategies”[xii], namely:-
- Encouraging compliance with the law – including by educating and informing consumers, businesses and traders about their rights and obligations under the Act. Compliance activities undertaken by the ACCC can include:-
- Targeted education campaigns – to encourage compliance with the law;
- Scams prevention;
- Industry engagement – including with key industry stakeholders;
- Research and advocacy – including research into potential new and emerging competition and consumer policy issues[xiii].
- Enforcement of the law – including through administrative resolution and through litigation/court action and other available formal enforcement actions;
- Undertaking market studies– including at the direction of the Minister – which can assist the ACCC to identify emerging competition and consumer issues as well as any market failures and how to address them;
- Working with other agencies to implement these strategies – including, for example, through coordinated approaches between state and territory consumer regulators which carry out the compliance and enforcement of the Australian Consumer Law.
Disclaimer: This update is not intended to replace obtaining legal advice
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Authored by Rochina Iannella (Lawyer, Stephens Lawyers & Consultants) 21 March 2022. The contribution of Katarina Klaric (Principal, Stephens Lawyers & Consultants) in editing this update is acknowledged.
© 24 March 2022 — Stephens Lawyers & Consultants
[i] ACCC, 2022-23 Compliance and Enforcement Priorities, 3 March 2022 https://www.accc.gov.au/publications/2022-23-compliance-and-enforcement-priorities
[ii] ACCC, Media Release, Compliance and Enforcement Priorities for 2022/23, 3 March 2022, p 1; https://www.accc.gov.au/media-release/compliance-and-enforcement-priorities-for-2022-23
[iii] ACCC, Media Release, “ACCC takes action over alleged misleading conduct by Meta for publishing scam celebrity crypto ads on Facebook”, 18 March 2022 at p. 3; “Scamwatch figures show that in 2021, consumers reported losses of $99 million to cryptocurrency investment scams.”
[iv] ACCC, Media Release, “ACCC takes action over alleged misleading conduct by Meta for publishing scam celebrity crypto ads on Facebook”, 18 March 2022
[v] ACCC, Media Release, “ACCC takes action over alleged misleading conduct by Meta for publishing scam celebrity crypto ads on Facebook”, 18 March 2022, per Mr Rod Sims (ACCC Chair)
[vi] Ibid, quoting Mr Rod Sims (ACCC Chair)
[vii] ACCC, Media Release, “Compliance and Enforcement Priorities for 2022/23”, 3 March 2022, p 1.
[viii] ACCC, Media Release, Compliance and Enforcement Priorities for 2022/23, 3 March 2022, p 1.
[ix] ACCC, 2022-2023 Compliance and Enforcement Policy and Priorities, 3 March 2022 p 4, https://www.accc.gov.au/publications/compliance-and-enforcement-policy
[x] Ibid. p 5
[xi] Ibid. p.4
[xiii] Ibid. pp 6-7