ACCC to crackdown on “drip pricing” and big businesses posing as small businesses

In a speech to economists and business leaders on Friday, Rod Sims, the head of the Australian Competition and Consumer Commission, outlined the regulator’s key priorities for 2014.

Key concerns flagged by the chairman include the “drip pricing” strategy used by online retailers, which refers to the practice of luring customers with attractive prices only to hit them with additional charges when they begin to process a payment.

Another focus for the ACCC is looking into whether energy retailers are misleading consumers with various discount claims in their promotion of energy plans.

Melissa Monks, special counsel at law firm King & Wood Mallesons, told SmartCompany there was likely to be action by the ACCC in the energy sector.

“We will definitely see litigation in relation to the savings ‘discounts off what?’ concerns, likely in the energy sector given the ACCC has been investigating this concern since at least June last year,” Monks said.

Of particular interest to small business was the mention in Friday’s speech that the ACCC will go after large companies that pose as small businesses.

The regulator also vowed to keep going after credence claims in the food industry.

Sims said this refers to the ACCC’s actions in relation to companies that make misleading claims in relation to whether food is Australian made, organic or baked fresh.

He also made mention of the role of government’s broad-ranging competition review and the focus on small business in the terms of reference.

Sims told the audience: “We need to remember, however, that small businesses are an important driver of competition, innovation and economic growth. A core issue for the Review panel will be striking the balance between vigorous, competitive behaviour and exclusionary anti-competitive conduct.”