Enforcing consumer law: An insight from the ACCC   Marcus Bezzi Executive General Manager Enforcement and Compliance Austr...
Compliance Tiered approach ― Education and outreach activities to  encourage voluntary compliance ― Resolution tools outsi...
Compliance Telco advertising Mix of compliance and enforcement activity: ― Meetings with telcos  ― Global undertakings ― I...
Compliance Optus judgement “ Optus does not, despite its protestations to the contrary, take this issue sufficiently serio...
 
 
 
 
Thank you ww.accc.gov.au
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Reconnect the Customer Summit - Marcus Bezzi - ACCAN presentation 2011

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Reconnect the Customer Summit

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  • It is a great pleasure to present at this ACCAN Seminar.
  • The ACCC does not take a one size fits all approach to compliance. Education and outreach activities are essential to allow businesses to comply with the law – and most do seek to meet these obligations. The ACCC may tailor its compliance efforts to particular industries or conduct. For example: Green claims, guide for procurement officers. Voluntary compliance is always better for a business than having compliance forced on your business by regulators and the Courts. Its very success depends on building a compliance culture in your company – simply ticking the boxes is not enough. How the ACCC approaches a compliance problem always depends on all the relevant circumstances. These include the nature and size of the contravention, what action the relevant party has taken to remedy the breach, whether the conduct is continuing, whether the trader has a history of contravening the law and the impact of the conduct on consumers and business resulting from the conduct. There are always going to be instances where businesses seek to break the law. In some circumstances the ACCC will seek to resolve its concerns through non-court based outcomes, such as undertakings, infringement notices, and administrative resolution. Court action for conduct is reserved for cases where the ACCC considers that litigation is the most appropriate way to achieve its enforcement and compliance objectives. This includes circumstances where it is necessary to ensure there is a strong message of deterrence, which is particularly relevant to alleged anti-competitive conduct.
  • The ACCC’s action in the last two years in response to advertising in the telecommunications market is a good example of how the ACCC employed a mix of compliance tools to encourage industry-wide compliance. It also demonstrates the need to have adequate compliance mechanisms in place. Having witnessed an increase in complaints about telco’s, and what can only be described as a “race to the bottom” in advertising, the ACCC set about responding with a campaign designed to achieve some positive change for telco consumers. Elements of the campaign included: A speech by ACCC Chairman Graeme Samuel in March 2009 put the telecommunications industry on notice that misleading advertising, unfair contracts, inadequate disclosure and subscription scams are all in the ACCC’s sights and that standards must improve or risk increased scrutiny and action. Series of meetings with telco’s – emphasis on what advertising practices should be avoided. Signing of global undertaking to set the benchmark in the industry, so that all telcos were to be operating on equal footing. We also established a capacity for a quick response where advertisements were not compliant with the Act, and not consistent with the undertaking provided. Action taken includes the issuing of a number of infringement notices to Optus in respect of ‘Max cap’ promotion totalling almost $180 000. Subsequent court action has also been taken in respect of advertising of broadband across a variety of media, including TV and radio. This has resulted in a record penalty for a CP matter of $5.26 million – now subject to an appeal by Optus.
  • Judgement in this matter illustrated the inadequacies of the compliance efforts at Optus. This was a key consideration for the Court in arriving at the penalty imposed. Perram J noted the inadequacies of resources made available for in-house lawyers: Optus had five lawyers whose principal duties were to vet advertising material. This team reviewed 450 to 700 different advertisements each month. Vetting was expected to be done within 48 hours. In the year between October 2009 to September 2010 this team of five reviewed 7,421 advertisements or, on average, 1,484 advertisements per lawyer which is 28 per week (provided that they worked 52 weeks) or just under six per day.
  • Current all inclusive offers in Australia such as this snapshot often follow an “all inclusive” or “included value” model. In many ways this form of offer inherently makes it risky for service providers because of the scope of uncertainty about the scope of what a consumer gets and the inevitable detailed conditions associated with the form of offer.
  • In other jurisdictions unit pricing is used by service providers and this can make it much clearer what a consumer gets in return for a monthly fee. ACMA is considering the merits of this clearer, simpler form of offer in the RTC inquiry.
  • Reconnect the Customer Summit - Marcus Bezzi - ACCAN presentation 2011

    1. 1. Enforcing consumer law: An insight from the ACCC Marcus Bezzi Executive General Manager Enforcement and Compliance Australian Competition and Consumer Commission
    2. 2. Compliance Tiered approach ― Education and outreach activities to encourage voluntary compliance ― Resolution tools outside of court action ― Civil and criminal proceedings as last resort
    3. 3. Compliance Telco advertising Mix of compliance and enforcement activity: ― Meetings with telcos ― Global undertakings ― Infringement notices ― Civil proceedings seeking pecuniary penalties
    4. 4. Compliance Optus judgement “ Optus does not, despite its protestations to the contrary, take this issue sufficiently seriously to put proper resources into its resolution. I do not, therefore, regard this as a case of a ‘wrong call’ as Optus submitted…It bespeaks on Optus’ part of a failure to take compliance seriously.” - Perram J
    5. 9. Thank you ww.accc.gov.au

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