The Australian Government has commenced a consultation on possible reforms to the Australian Consumer Law to address currently unregulated unfair trading practices.
According to the Federal Department of Treasury website, the ‘Consultation Regulation Impact Statement (Consultation RIS)’ “seeks further evidence on the nature of unfair trading practices in Australia and the extent of consumer and small business harm arising from potential gaps in the Australian Consumer Law. Treasury is also seeking stakeholder feedback on policy options to address unfair trading practices in Australia.”
Unfair trading practices are particular types of commercial conduct which are not prohibited by existing provisions of Australia’s consumer laws, the Treasury noted, but which can distort competition and result in significant consumer and small business harm.
The Australian Competition and Consumer Commission (ACCC) welcomed the reforms, with deputy chair Catriona Lowe saying the watchdog has been advocating for an unfair trading practices prohibition for some time.
“We have previously identified numerous examples of concerning business conduct, which is unlikely to breach Australian Consumer Law but causes real harm to consumers,” Lowe said.
“This consultation process is an opportunity to drive improved consumer protections into the Australian Consumer Law and we are calling for consumers and consumer groups to participate by sharing their experiences and knowledge.”
Fellow deputy chair Mick Keogh said the introduction of an unfair trading practices prohibition would set an improved standard for business behaviour.
“Many small businesses and consumers have limited bargaining power in their dealings with large businesses, making them more susceptible to unfair trading practices,” Keogh said.
“The ACCC’s 2020 Perishable Agricultural Goods Inquiry concluded that Australia’s perishable agricultural goods markets need a new unfair trading law to address harmful practices arising from bargaining power imbalances that are not covered by current laws.”
“Unfair trading practices create an uneven playing field for businesses and can discourage or inhibit small businesses from competing in markets. Businesses should be competing on merits and the reforms the ACCC has been advocating for will help to better achieve this.”
Consultation is now open and submissions are due to the Department of Treasury by 29 November 2023.
ACCC defines unfair trading practice as:
- Harmful but does not reach the legal threshold for unconscionable conduct
- Not misleading or deceptive but distorts consumer choice by creating confusion or hiding or omitting relevant information
- Not captured by the unfair contract term provisions as harmful terms in non-standard form contracts or unfair conduct engaged in pursuant to a contract term that is, on the face of it, a reasonable contract term.