Antitrust Alert: ACCC Pushes for General Safety Provision on Sale and Marketing of Products

Antitrust Alert: ACCC Pushes for General Safety Provision on Sale and Marketing of Products

The Australian Competition and Consumer Commission (ACCC) has announced product safety priorities for 2018. A key priority is for the Commission to work towards the introduction of a General Safety provision within the Australian Consumer Law (ACL).

A recent review by the ACL found that it does not expressly prohibit selling unsafe products in Australia. It does, however, provide a number of measures to ensure product safety, including mandatory safety standards, bans, safety warning notices, mandatory reporting requirements for specific products or services, and product recall powers. It also provides automatic guarantees provided to consumers. The introduction of a general safety provision would place a clear requirement on all businesses not to market or supply unsafe products in the Australian market. This provision would include requirements of product information disclosure, corrective actions on unsafe products, and the notification of issues with products that might be considered unsafe.

This announcement comes while Parliament is considering a bill to raise the penalties for breaching the ACL from $1.1 million to the greater of $10 million, three times the value of the benefit received, or, where the benefit is not able to be calculated, ten percent of the company's annual turnover in the previous twelve months.

Implications for business

Following a recent decision where United States-based gaming company Valve was ordered to pay a penalty of $3 million for misleading Australian customers about refund guarantees, the precedent has been set that overseas-based companies that sell to Australia must abide by the ACL.

International operators dealing in Australia are increasingly subjected to a unique set of Australian regulations when it comes to consumer products. The ACCC has taken a far more active regulatory role than regulators in many other countries, and it plans to increase its impact in enforcing the ACL provisions. Overseas operators need to become informed about the ACL's unique operation, and domestic businesses need to be wary of the quality of products being provided from outside of the country.

Prudence Smith

J. Bruce McDonald

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