The Victorian Automotive Chamber of Commerce (VACC) welcomes the Federal Government consultation launch on possible reforms to the Australian Consumer Law (ACL) to address currently unregulated unfair trading practices.
VACC has discussed with the Commonwealth Treasury Department the nature of unfair trading practices in Australia and specifically within the automotive industry.
Due to the current definition and limitation of what constitutes a ‘small business’ many of VACC’s larger business members may not have the same rights as a small business. A small business is one that employs fewer than 100 persons or has a turnover for the last income year of less than $10 million. For instance, a franchise car or truck dealership will invariably employ less than 100 people and have a turnover of more than $10 million, likewise a tyre retailer.
VACC strongly advocates, among other changes, that any potential unfair trading prohibitions are extended to all businesses not just small businesses within the current definition. This fair change recognises that all businesses can face the same challenges when it comes to experiences of unfair trading.
What are unfair trading practices?
Small businesses can often face the same challenges as consumers when it comes to experiences of unfair trading. For instance, exploiting bargaining power imbalances in supply chain arrangements, including by unilaterally varying supply terms at short notice. Unfair trading practices that will be prohibited will fall outside the recent Unfair Contract Terms Legislation.
What could it mean for businesses?
If new laws are introduced, businesses may face greater obligations to revise compliance practices, train staff, and ensure practices do not contravene broad and flexible provisions. However, clearly articulating acceptable business practices may also provide useful guidance. New penalties may deter unfair conduct and secure redress for harm.
Overall, the proposed options aim to balance the need to address unfair trading practices against burdening businesses with unclear or expansive new obligations. More work is required to refine and assess the options, and stakeholder feedback will inform Treasury’s decision on the preferred approach.
How can you provide feedback?
The consultation process is open until 29 November 2023. View the unfair trading practices Consultation Regulation Impact Statement.
VACC invites feedback from members on the consultation paper by Friday 3 November 2023 by emailing Industry Policy Advisor, Kathy Zdravevski kzdravevski@vacc.com.au
For further reading and information regarding unfair trading practices, see VACC’s summary document.