Following fallout from the Royal Banking Commission, multi-million dollar penalties for big business and increased fines for breaching Australian Consumer Law, the regulatory environment is heating up for business.

Written by Australian Business Lawyers and Advisors Associate Director, Suzie Leask and Associate, Lauren Kaplan.

ACCC active on prosecution and enforcement
According to the Australian Competition and Consumer Commission’s (ACCC) latest annual report, nearly $170 million in penalties were issued for breaches of the Competition and Consumer Act 2010 (Cth).

A record high penalty was issued in 2018 with one business receiving $46 million in fines. It’s clear the ACCC are sending a strong message to business that breaches will not be tolerated. 

ASIC toughens up
In the wake of the Royal Banking Commission, the Australian Securities and Investments Commission (ASIC) announced it intends to be a strategic and forceful regulator in the market.

ASIC will ensure companies comply with their obligations to small businesses, focusing on illegal phoenix behaviour, non-compliance with financial reporting obligations and director misconduct.

Stronger corporate and financial sector penalties
New legislation introduced into Parliament on 24 October 2018 seeks to greatly increase penalties, both civil and criminal, for breaches of corporations, credit and financial services laws. 

Under the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018, the Corporations Act 2001 (Cth) will be amended to:

  • more than double maximum imprisonment penalties for some of the most serious ‘white-collar’ crimes
  • increase civil penalties for individuals by more than five-fold
  • increase civil penalties for individuals by more than ten-fold

Courts will also be empowered to consider higher penalties where the profits from misconduct are high or a company’s annual turnover exceeds $104 million.
 
Australian Consumer Law – increased maximum penalties and more
On 18 October 2018, a series of changes to Australian Consumer Law (ACL) were passed. In particular, the changes include:

  • amendments to the single figure pricing provisions to address pre-selected options
  • permitting the ACCC and ASIC to use their investigative powers in relation to potentially unfair contract terms
  • extending the ACCC's powers to enable it to require third parties to produce safety-related documents and information
  • extending the unconscionable conduct protections to publicly-listed companies

With penalties for breaches of the ACL increasing from a maximum of $1.1 million for companies, to now in excess of $10 million (depending on the revenue received), it is now more important than ever for businesses to ensure that they are compliant with the ACL.

The increase in regulator activity is a reminder to businesses, and particularly directors, to ensure their agreements are not anti-competitive, and communications they make to the public and to their customers are not misleading or otherwise prohibited under the law.

If you have any questions or concerns about your company’s business practices in relation to the Competition and Consumer Act, contact one of our Corporate and Commercial lawyers today on 1300 565 846 or email us at info@ablawyers.com.au.