Tax

ACCC chairman Rod Sims says he’s not afraid of taking on the big names, and losing

Myriam Robin /

Australian Competition and Consumer Commission chairman Rod Sims says he doesn’t think competition regulator should be winning 100% of cases, as this would show it was shirking its duty to take on complex, difficult cases in the public interest.

“We will lose some more big cases, but we must be willing to take these cases on and, when we do lose, be glad for the clarity gained and the lessons learned,” he said at a Law Council of Australia dinner in Sydney on Friday.

The ACCC wins around 80% of the cases it brings before the courts, Sims said, but it has lost some high-profile cases in recent months, such as that bought against Lux (the ACCC unsuccessfully argued Lux was engaged in unconscionable conduct for pressuring five old women to buy vacuum cleaners).

“Unconscionable conduct cases are notoriously difficult since they inevitably involve a value judgement, but we also prioritise them highly due to the intrinsically deplorable behaviour which is the basis for these cases,” Sims said. “We think that trying to prevent unconscionable behaviour is one of our most important roles.”

The ACCC boss said the regulator did not turn companies into “guinea pigs”, as it was required to obtain legal advice saying it had a case before proceeding to court.

“What this does mean is that we will back our judgement and that we are not intimidated by ‘losing’ a case – for example, we have issued several new proceedings alleging unconscionable conduct since we lost the Lux case at first instance.

“We are not attached to our win/loss ratio, and we won’t back away from the big companies for fear of losing. Our record this year speaks to that.”

Sims used the speech to flag infrastructure as an area the regulator planned to devote some attention to in coming months.

Citing the fact that NBN Co is a monopoly, the ACCC will be looking closely to make sure it does not abuse its market power, he said.

The ACCC will also be looking at developing a mandatory code for wheat ports, and at rail access undertakings which can be used to make it difficult for small coal producers without access to their own railroads to bring their ore to port.

The ACCC has significantly increased the number of actions it takes to court and notices issued in the past two years. It has secured, through the courts, pecuniary penalties in 33 cases, totalling $22 million. More than 100 infringement notices have been issued with $620,000 in accompanying penalties.

A year and a half ago, it also secured what is cumulatively the largest ever penalties for cartel conduct in the history of the ACCC.

“The ACCC commenced investigations in 2006 into collusion by international airlines on fuel surcharges for air cargo services between 2000 and 2006,” Sims said.

“Since proceedings were commenced against 15 international airlines between 2008 and 2010, 13 airlines have paid a total of $98.5 million to date. Most recently Emirates, Singapore Airlines, Cathay Pacific and Thai Airways International have respectively had pecuniary penalties of $10 million, $11.75 million, $11.25 million and $7.5 million imposed.

“This result shows us that we can take on these big competition matters and achieve great results.”

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Myriam Robin

Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.

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