The stars align. Penalties for ACL breaches to match those for anti-competitive conduct.

Key Point
  • Changes to the ACL penalty regime to be aligned with the penalty regime applying to anti-competitive conduct.

In 2015 Consumer Affairs Australia and New Zealand (CAANZ) undertook a review of the Australian Consumer Law (ACL). As a result of that review, a new Bill has been introduced into parliament, which proposes to increase the maximum penalties payable for breaches of the ACL by aligning them with the penalties that apply under Part IV of the Competition and Consumer Act 2010 (Cth) (CCA). Part IV of the CCA deals with anti-competitive conduct. It is hoped that the proposed changes will send a clear message to businesses that breaches of the ACL will be taken just as seriously as breaches of the anti-competitive conduct provisions. If passed, the changes will take effect by 1 July 2018.
 
At present, a breach of the ACL attracts a maximum civil pecuniary penalty and fine for criminal offences of $1.1 million for corporations and $220,000 for individuals.
 
Under the proposed reforms, the maximum penalty for corporations will be the greater of:
  1. $10 million; or
  2. if the court can determine the total value of the benefit obtained from the offence, 3 times the value of that benefit; or
  3. if the court cannot determine the value of the benefit, 10% of the “annual turnover” of the corporation, including its related bodies corporate, in connection with Australia during the preceding 12 months.
“Annual turnover” is understood to mean the sum of all the supplies made by the corporation, including its related bodies corporate, in connection with Australia, however certain exceptions apply.
 
Similarly, the maximum pecuniary penalty, and fine for criminal offences for individuals is sought to be increased to $500,000.
 
The intention is that the increase in penalties will deter breaches associated with highly profitable conduct amidst a dangerous corporate culture that sees the need to pay penalties as nothing more than the cost of doing business.
 
The Bill is expected to pass.
 
Post by John Kell and Vanja Simic

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