Australian Regulatory Trends 2019

Corporate Regulation

CONSUMER LAW

INCREASED PENALTIES FOR BREACHES OF THE ACL

Companies and directors should be aware of the increase in penalties for contraventions of the ACL that came into force in September 2018. The CAANZ Final Report concluded that the existing penalties for corporations and individuals were insufficient to deter non-compliant conduct. CAANZ found that some companies viewed penalties as a cost of doing business as opposed to a deterrent to contravening the ACL and therefore proposed that the penalties should be increased to match those in the CCA. The Treasury Laws Amendment (2018 Measures No.3) Act (Cth) ( TLA ) was passed by Parliament in August 2018 and significantly increased the penalties for breaches of the ACL. With the introduction of the TLA, an individual can now be fined up to AUD 500,000 for each contravention of a number of restrictive trade practices and the fine for breach by a corporation has increased to the greater of: –– AUD 10 million; –– three times the value of the benefit received; or –– if a benefit cannot be determined, 10% of the business turnover in the preceding 12 months.

WHAT ARE THE EMERGING ISSUES?

–– ACL reform –– Increased penalties for ACL breaches –– Unfair contract terms in insurance contracts

NEWWAVE OF ACL REFORM

The Treasury Laws Amendment (Australian Consumer Law Review) Act 2018 ( the ACL Review Act ) came into force in October 2018. The ACL Review Act amended the Australian Securities and Investments Commission Act 2001 (Cth) ( the ASIC Act ), Competition and Consumer Act 2010 (Cth) ( the CCA ), and the ACL, set out in Schedule 2 of the CCA. Key amendments included: –– extending the prohibition against unconscionable conduct in the ACL to also protect public companies; –– improvements in price transparency for certain ‘optional extras’; and –– expanding the definition of financial services in the ASIC Act to include financial products.

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