Key Australian regulators have moved to establish new initiatives and scale-back some existing programs as the COVID-19 crisis deepens. Given the current crisis impacts both business and consumers alike, ASIC and the ACCC have prioritised their resources to ensure they are best placed to respond where necessary. The key take-outs for businesses to consider are:
- The ACCC has reportedly formed a special COVID-19 taskforce to address competition and consumer compliance issues arising from business conduct during this period of uncertainty and unusual market activity. The ACCC has warned of a sharp increase in reported scams targeting businesses and consumers concerned about the COVID-19 crisis and otherwise experiencing particular resourcing pressures. Businesses need to be aware that any refusal to provide consumers with (a) goods and/or services which they have paid for; (b) benefits, rewards or prizes to which they are entitled (including through entry into a trade promotion or participation in a loyalty program); or (c) a remedy they are entitled to under the consumer guarantees is more, not less, likely to expose those businesses to regulatory scrutiny and potential action in this current climate.
- The ACCC has published an information summary for consumers in response to the federal government suspending non-essential business activities. While the federal government has urged consumers to show consideration towards struggling businesses, the ACCC has adopted a firm approach; the clear directive from the ACCC is that businesses are still expected to offer consumers a remedy in respect of cancellations or suspended services. But on the flip side, the ACCC has also conceded that some small businesses (especially) will take more time to respond and meet their obligations under the Australian Consumer Law. While some decision making and adaptation time is reasonable and anticipated, businesses should be monitoring competitor conduct and taking a harm and risk reduction-focused approach to compliance during this period of fast-changing conditions. While you may not be deliberately misleading or ‘scamming’ consumers, misleading by omission will continue to constitute unlawful conduct, and you don’t want to be seen to finishing last in this COVID-19 compliance race.
- In response to the recent rashes of consumer (and commercial) panic-buying, the ACCC have allowed supermarkets – at this stage just Coles, Woolworths, Aldi and Metcash – to co-operate to ensure consumers have fair access to groceries and essential consumer goods in circumstances where such conduct might otherwise constitute unlawful cartel or other anti-competitive conduct under Australia’s competition laws. The interim authorisation allows supermarkets to work together with manufacturers, suppliers and logistics services, but does not allow supermarkets to agree on retail prices between themselves. While the authorisation provides statutory protection under the Competition and Consumer Act, and is therefore most relevant to the supermarkets themselves, the benefits of the interim authorisation will apply to suppliers and consumers also by providing businesses with additional confidence that a coordinated approach to supply is prioritised during this period. That being said, supplier businesses should anticipate increased requests for supply chain information and wider sharing of such information between retail customers during this period and exercise caution in disclosing business information. There is no statutory requirement that suppliers share confidential or proprietary information (including their own supplier or cost details); co-operation is key, but you can’t take back a disclosure of valuable information after the fact.
ASIC too has recalibrated its regulatory priorities and announced the creation of a COVID-19 task-force to ensure its limited resources are applied wisely. Changes include:
- A suspension of activities which are not time-critical, such as consultation, regulatory reports and reviews.
- A suspension of on-site supervisory work, such as the Close and Continuous Monitoring Program. Major financial institutions will no longer have ASIC staff embedded into their organisations for the foreseeable future.
- Provision of relief or waivers from certain regulatory requirements will be provided, presumably on a case-by-case basis.
- An overarching focus on “action necessary to prevent immediate consumer harm, egregious illegal conduct and other time critical matters”. Companies can therefore expect some leeway in respect of specific regulatory requirements, however, should be mindful to still prioritise compliance to the maximum extent possible.
There is no doubt that these announcements are merely an initial response, as regulators adjust to the new status quo over the next 6 months or so. As always, businesses should be mindful that while regulators appreciate the disruption caused by COVID-19, their focus remains firmly on protecting vulnerable consumers wherever possible.
Read more about statutory changes regarding insolvency safe-harbour and statutory demand procedural changes here.
If you have any questions in relation to regulatory compliance at any time, please don’t hesitate to contact a member of our team.