​ACCC to reshape guidelines in response to startups and subscription providers

The Australian regulator has said new technology and subscription-based services are bringing new challenges to protecting consumer rights.
Written by Asha Barbaschow, Contributor on

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims has flagged his concern that startups and "anti-competitive" responses to new technologies by incumbent businesses, as well as those restricting consumer access to data, are bringing with them challenges to protecting the rights of consumers in Australia.

Speaking at the National Consumer Congress on Wednesday, Sims said that fast-moving "disruptive" technologies and new retail practices he called "subscription traps" often fall short of complying with Australian Consumer Law.

"New technology has increased access to more products, services, and information for consumers but with it come new challenges for consumer advocates and regulators," he explained.

"In the past year we've been working on issues as varied as the sharing economy, rogue online traders, and of course, raising awareness about scam artists finding ever more sophisticated ways to part people from their hard-earned cash."

According to Sims, it is difficult regulating under Australian Consumer Law as the concept of a global marketplace gains prominence.

Also of concern to Sims is the data availability inquiry currently underway by the Productivity Commission.

"The amount of data people share day to day is enormous, yet much of it is inaccessible to the people who created it and often this is taken for granted by the consumer," he said.

"It's in this sort of situation that advocacy can make a significant impact. By fighting for the rights of the consumer in a changing digital landscape, you can help ensure that consumer protection moves with the times. And that consumers are not caused detriment by fast-moving, disruptive technologies or by anti-competitive responses to those technologies by incumbent businesses."

Sims explained the ACCC will also be shifting its focus from traditional areas of consumer guarantees, such as rights for a repair, replacement, or refund, to more complex products such as motor vehicles and the provision of services in industries such as telecommunications and airline travel.

In addition, the ACCC will be focusing on six principles to ensure companies are not misleading customers under Australian Consumer Law, which includes working with internet platform providers to prevent the supply of unsafe products to Australia.

If found in breach, Sims said companies will be held accountable by the regulator, noting penalties should be seen as more than just a cost of doing business.

"Businesses should understand the seriousness of the issues involved with them breaking the law," he said. "We strongly welcome recent messages from Federal Court judges that penalties must be high enough to provide sufficient deterrence."

"I am continually puzzled as to why some large companies treat their customers so badly, and with so little respect," he added. "We are often told that companies will only succeed by meeting customer needs. It is clear that some companies seek to deceive their consumers about these needs."

Earlier this year, the ACCC extended a warning to international organisations selling goods and services in Australia that they must comply with the Australia Consumer Law.

"Under the Australian Consumer Law, all goods or services supplied to consumers come with automatic consumer guarantees that they are of acceptable quality and fit for the purpose for which they were sold," ACCC Acting Chair Dr Michael Schaper said previously. "If they're not, consumers have a right to a remedy. These consumer rights cannot be excluded, restricted, or modified."

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