Australian Consumer Law, Businesses & the Carbon Price
Stephens Lawyers & Consultants Legal Update: May 2013
Businesses should be aware that the Government has provided the ACCC with $12.8 million over the next four years in an effort to counter possible false and misleading representations in relation to the Carbon Pricing System.1
The Clean Energy Future package, which consisted of 18 different pieces of legislation, ushered in a price on carbon for emitting businesses on 1 July 2012. In anticipation of the new carbon pricing regime the ACCC released a ‘Carbon Pricing Claims – Guide for Business’, which set out to assist businesses in understanding their rights and obligations under the Australian Consumer Law when linking price rises with the impact of the carbon price.2
All businesses are free to increase their prices for the goods and services they offer as they please. However, if a business claims to link a price rise with an external factor, such as the carbon price, then this claim should be truthful and have a reasonable basis otherwise the business will risk facing action from the ACCC under the Australian Consumer Law.3
Businesses should ensure that before making any claims linking price increases with the carbon prices that they can substantiate the claims with relevant statistical or financial data, studies, reports or other information.
The ACCC has the power to require businesses to:
- Provide information and documents in response to a substantiation notice or section 155 (1) Notice under the Australian Consumer Law;
- Issue infringement notices for breaches of the Australian Consumer Law;
- Seek informal and court imposed undertakings; and
- Seek court imposed penalties of up to $1.1 million for serious breaches of the Australian Consumer Law to stop a business from making certain claims.
Businesses should also be aware that their liability with respect to statements made about the impact of the carbon price on price increases is not limited to advertising or communications with employees or consumers. Under section 44ZRA of the Australian Competition and Consumer Act it is an offence for a corporation to enter into a contract, arrangement or understanding that gives effect to a price fixing provision. Any contact between competitors relating to the impact of the carbon price on price increases may be seen by the ACCC as price fixing under the cartel provisions of Australian Competition and Consumer Act.
For further information contact:
Katarina Klaric | Principal
STEPHENS Lawyers & Consultants | Suite 205, 546 Collins Street, Melbourne VIC 3000 Australia
T + 61 3 8636 9100 | F + 61 3 8636 9199 | E [email protected]
PO Box 16010 Collins Street West VIC 8007 Australia
Stephens-Klaric Legal Pty Ltd (ACN 117 672 376) trading as Stephens Lawyers & Consultants
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© Stephens Lawyers & Consultants. February 2013. Authored by Katarina Klaric and Matthew Churkovich.
1 Prime Minister’ Press Release, ‘New Funding for ACCC to crack down on misleading carbon price claims’, 13 July 2011.
2 ACCC, “Carbon Price Claims – Guide for Business’, July 2012.
3 ACCC, www.accc.gov.au/business/carbon-price-cliams,accessed on 15/05/2013.