The Australian Competition and Consumer Commission (ACCC) chair Rod Sims has accused companies of putting “short-term profits” before the needs of consumers, calling on legislation to be enacted that would increase penalties for companies flouting consumer law.
Speaking to the West Australian Australian-Israeli Chamber of Commerce in Perth this week, Sims discussed how the ACCC had taken action against companies such as Nurofen and Heinz, with the latter being taken to court for misleading consumers over toddler food packaging. Adelaide Now reports the watchdog is calling for a $10 million fine to be laid against the company.
“The Federal Court ordered penalties of $6 million for Nurofen. But, we argue, for many large companies penalties of that magnitude are not enough to deter bad behaviour,” Sims told attendees at the conference.
“In our experience many companies behave badly at least occasionally, putting their short-term profit before the needs of their customers who they profess to serve by engaging in misleading or unfair conduct, anti-competitive conduct or cartel activities.
“What is needed to provide greater deterrence are penalties so large that companies, their boards and shareholders must take our competition and consumer laws more seriously,” he added.
Sims noted a bill to increase penalties was before parliament. The bill — Treasury Laws Amendment (2018 Measures No. 3) — would see penalties for businesses increased to $10 million per contravention of Australian Consumer Law, rather than the current $1.1 million.
“We hope the parliament will agree that higher penalties are badly and urgently needed to improve the behaviour of companies and protect consumers,” he said.
The ACCC has long pushed for larger fines for companies violating Australian Consumer Law, with Sims mentioning in 2015 the ACCC wouldn’t be opposed to total fines as high as $100 million.
The ACCC first proposed the $10 million change in December 2016, at the time questioning if penalties were keeping up with deterrence.
“Increased enforcement should decrease consumer law breaches, which [affect] both individuals and SMEs as consumers, as many SME transactions fall within the ACL,” LegalVision principal Ursula Hogben told SmartCompany at the time.
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