Companies bilking consumers with unfair business practices will be hit with significantly increased fines as the government cracks down on anti-competitive behaviour and a soaring cost of living.
A strengthening of consumer protections to be introduced to Parliament on Wednesday will raise the maximum fines levied on companies engaging in anti-competitive behaviour from just $10 million, or 10 per cent of their revenue, to $50 million or 30 per cent.
The government will raise the base maximum penalty, unchanged for decades, to stop companies from simply absorbing fines as part of the cost of doing business.
“We need to use every tool in the shed to protect working families from unfair practices,” Assistant Treasurer Stephen Jones said.
“Increasing penalties puts everyone on notice that anti-competitive behaviour will not be tolerated.”
Maximum fines for breaching competition laws were set nearly 30 years ago and a 2018 review by the OECD found they were substantially lower than in other countries.
Bringing Australian law into line will ensure that markets are competitive, with a direct effect on prices.
“Competition is the bedrock that a fair economy is built on,” Assistant Minister for Competition Andrew Leigh said.
“Greater competition means better prices and more choice for Australian households struggling with the rising cost of living.
“That’s why Labor is increasing penalties, to ensure that there’s a level playing field for all Australian businesses, big and small.
“Fines should not be so modest that companies can treat them as a mere cost of doing business.”
The new penalty provisions will be added to the Competition and Consumer Act, while the Australian Consumer Law will be changed to increase fines on individuals found guilty of uncompetitive practices from $500,000 to $2.5 million.
Dr Leigh will move the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 in the lower house on Wednesday.
Base maximum penalties are currently at levels set nearly 30 years ago, though the scope of the law was widened to allow for penalties derived from a proportion of turnover or benefit obtained.
