Consultation on banning unfair trading practices

1 December 2023

VACC has responded to the Federal Government’s consultation on possible reforms to the Australian Consumer Law (ACL) to address unregulated unfair trading practices.

VACC attended a roundtable discussion with the Commonwealth Treasury Department and discussed unfair trading practices in Australia, specifically within the automotive industry.

Because of the current definition and limitation on what constitutes a ‘small business’, many of VACC’s larger business members may not be afforded the same rights as a small business.

A small business is one which employs fewer than 100 persons or has an annual turnover of less than $10 million. For instance, a franchise car or truck dealership may employ less than 100 people, but has a turnover of more than $10 million (because of the price point of the goods). The same example may apply to a tyre retailer or other sectors of the automotive retail market.

VACC advocates that, among other changes, any potential unfair trading prohibitions are extended to all businesses, not just small businesses within the current definition. This fair change recognises all businesses can face the same challenges with unfair trading.

If the government introduces the new laws, 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.

The proposed options aim to balance the need to address unfair trading practices against burdening businesses with unclear or expansive new obligations.

Treasury will release a Decision Regulatory Impact Statement in 2024, after it has reviewed all consultation submissions. VACC, together with the Motor Trades Association of Australia, will make a subsequent submission on the Decision RIS.

Read VACC’s submission.

For further reading and information regarding unfair trading practices, see VACC’s summary document.

Previous Article Forward thinking freight initiative
Next Article ASIC adds claims handling to enforcement priority list