On 18 August 2022, the Federal Government introduced a draft bill for consultation that would increase penalties for breaching competition and consumer laws to what has been described as “eye-watering” levels. These penalties can apply to both individuals and corporations.
The draft bill had a remarkably short consultation period of just one week, which experts interpret as a sign that the Government is looking to implement these harsher penalties as quickly as possible.
What are the new penalties?
Corporations will face major fines for breaking competition and consumer laws in Australia.
Under the Government’s proposal, the maximum civil penalties would be the greater of the following:
- $50 million (up from $10 million);
- if the court can determine the value of the benefit obtained by the corporation – three times the value of the benefit;
- if the court cannot determine the value of the benefit obtained by the corporation – 30% of its “adjusted turnover” during the “breach turnover period” (up from 10% of its annual turnover during the last 12 months).
This is a significant increase from current penalties and will apply to most prohibitions under the Competition and Consumer Act 2010 and the Australian Consumer Law.
Corporations should pay close attention to the definition of the “breach turnover period.” This is the entire length of time in which a corporation breaches the law and could extend to multiple years – much longer than the 12-month period in current legislation.
Individuals involved in committing breaches may be fined up to $2.5 million in civil penalties (up from $500,000). They can also face criminal penalties, including up to 10 years in prison.
Making compliance a priority
The proposed increase in penalties indicates that that the Government regards enforcing competition and consumer protections as a priority.
In March, competition lawyer Gina Cass-Gottlieb became the new Chair of the Australian Competition and Consumer Commission (ACCC), a sign that the ACCC itself is intent on playing a proactive role in investigating individuals and corporations that breach Australian competition and consumer laws.
Compliance involves ensuring that employees, managers and executives are familiar with the network of laws that make up competition and consumer protection.
The penalties for individuals mean that every person in your business, from CEOs to employees, needs to understand the requirements of the law.
GRC Solutions provides tailored e-learning on a wide range of topics including competition and consumer protection. Our extensive library of courses introduces learners to the relevant laws, regulations and standards, which we bring to life using real-world case studies and scenarios through interactive, visually rich experiences.