Compliance training is so last decade... pity the CCA's so now

Let’s face it: compliance training has never been sexy, even when it’s about competition and consumer law. Hard to believe, I know. Over recent years, I’ve got the distinct impression that people have found it even less exciting than usual. Everyone’s been there, done that and - while on paper - annual training seems a great idea, people have much better ways to spend their time and their training budget.

Over the last decade, this approach has been reinforced by a wave of relatively superficial changes to the Competition and Consumer Act. Most people have managed to keep up their heads above water, even in the consumer protection space which has undergone significant change. So while the average Jo/e - compliance trained to death - might have been shaky when it came to the section numbers, s/he probably still knew the important stuff.

When was the last time you did compliance training? If it was before October 2017, you’re way out of date. 

But things have really changed now. Late last year, we saw some massive amendments to the law, such that now almost everyone outside the Competition Coven (and some inside!) is pretty shaky when it comes to knowing the ins and outs of Australia’s competition provisions. Changes to section 46 (misuse of market power) sucked up the CCA’s annual quota of column inches but it’s actually amendments to the less glamorous aspects of the law that will likely impact on the day-to-day operations of most Australian businesses.

Failure to know the law as it currently stands creates an unacceptable exposure to risk for a company, its officers and employees. For example, did you know that conduct with and between competitors is now under even closer scrutiny? While the last decade has seen plenty of changes to the consequences of colluding (bigger penalties, prison), we've now got the first new prohibition in this space since the Act’s inception. And it’s a doozy that we’re still trying to get our heads around. 

Meanwhile, of course, the ACCC’s appetite for enforcing the law is not diminished. The ACCC is an experienced and successful litigator and wins way more than it loses. A lot of the tinkering to the Act over the last decade has been in the area of process and remedies - this has improved the ACCC’s ability to prosecute conduct, and expanded the remedies available (including banning orders and, of course, the prospect of jail time). The ACCC has not been shy in experimenting with its new powers, and has used them to great effect. 

Here are some of the ACCC's "personal bests" for its most recent reporting year:

• the highest corporate penalty for the year was $25 million, nicely rounded out by a criminal conviction
• the highest individual penalty (affirmed on appeal) was $600,000 - the person concerned has since been declared bankrupt
• there were several disqualification orders, including one that was permanent and another that endures for 10 years
• and a couple of guys got themselves thrown in jail for contempt

“No company ever steps into the same law twice. For it’s not the same law, and it’s not the same company.” Heraclitus (mutatis mutandis)

A lack of knowledge about the CCA as now drafted means more than increased risk though. It can also mean lost opportunities. For example, that age-old excuse - “We can’t do that, it’s third line forcing” - no longer applies. While businesses and lawyers have trotted this line out for years as if they were Josephine fobbing off Napoleon, it’s simply no longer a problem. If you’ve been wondering why the supermarket giants can do stuff that looks like third line forcing, while your local independent bottle shop thinks it can't, wonder no more. It’s just not relevant anymore.

In light of all this, compliance training is the new black. If you’re a General Counsel or an officer or director, you need to know the law as it stands right now. When was the last time you did compliance training? If it was before October 2017, you’re way out of date. Ignorance has never been an excuse, so you’d best get to it.

Alexandra Merrett is a card-carrying member of the Competition Coven. If you’re interested in compliance training, please contact her at [email protected] and she can work out a program to best suit your needs.