The ACCC Compliance and Enforcement Project: Assessment of the Impact of ACCC Regulatory Enforcement Action in Unconscionable Conduct Cases

Abstract

This paper evaluates the success of the Australian Competition and Consumer Commission (ACCC) in changing and reinforcing norms of business behaviour in relation to avoiding unconscionable conduct. First the Report sets out the reasons for, and controversy over, the introduction of unconscionable conduct provisions into the Australian Trade Practices Act. The Report goes on to use qualitative empirical evidence to evaluate the success of the ACCC in enforcing the unconscionable conduct provisions in a number of key cases concerning retail leasing, franchising and consumer transactions. We conclude that the ACCC has, through its enforcement activity, succeeded in raising awareness of the prohibition against unconscionable conduct, and its role in enforcing those provisions. However, the ACCC did not have much success in actually winning unconscionable conduct cases. Therefore it has made a limited contribution to developing the law on unconscionable conduct and sending out a clear message about what amounts to acceptable or unacceptable business conduct in this area. Moreover, the ACCC has been criticized in relation to some unconscionable conduct cases for commencing cases too quickly, for not giving alleged offenders an adequate chance to put their point of view, and for refusing to negotiate settlements or mediate cases in certain circumstances - all criticisms that might undermine the perceived legitimacy of the ACCC's enforcement activity.