Policy

An economy-wide prohibition on unfair trade practices is a vital addition to Australia’s consumer laws. There are a range of practices that cause consumer harm, and are detrimental to the competitive process, that are not currently unlawful. These practices have become more prevalent with the widespread uptake of online commerce, while also existing in the offline world.

The traditional approach to consumer protection, focusing on preventing misleading, deceptive or unconscionable conduct and outlawing only the worst forms of exploitation, falls short of addressing the complex psychological biases that influence consumer decision-making. It’s time for change – it’s time to make unfair illegal!

This submission makes the following recommendations for Australia’s unfair trading practices prohibition:

  • In developing the design of an unfair trading prohibition, ACL Ministers should adopt the following principles:
    • The provision should promote the National Consumer Policy Objectives, particularly to enable confident participation of consumers in markets and to foster effective competition.
    • The provision should respond to gaps in Australia’s existing consumer protection laws.
    • The provision should build upon existing norms and laws internationally, so as to promote greater certainty in scope.
  • The prohibition should be drawn broadly, enabling it to be responsive to conduct and practices that exist today and those that may develop over time.
  • It should be accompanied by a definition of ‘unfair’ that includes conduct or practices that:
    • unreasonably distort or undermine the autonomy and economic choices of consumers
    • take unreasonable advantage of a lack of consumer understanding or ability to protect their own interests, or consumers’ reasonable reliance on the trader
    • omit, hide, or provide unclear, unintelligible, ambiguous, or untimely material information, or
    • unreasonably inhibit access to, or enjoyment of, a good or service already purchased.
  • Guiding principles should accompany the prohibition that require consideration of consumer vulnerability, such as whether the conduct or practice causes or exacerbates consumer vulnerability.
  • An unfair trading prohibition should not adopt principles relating to the supplier’s ‘legitimate interests’, the ‘average’ consumer, or a ‘substantial’ harm or detriment test.
  • It should adopt the model proposed in Option 4 of the Consultation RIS (CRIS), incorporating a general prohibition together with a ‘blacklist’ of specified unfair trade practices.
  • The ‘blacklist’ of unfair trade practices should be specified and managed by the regulator, and subject to public consultation.
  • There should not be a carve-out for financial services. The reform should apply to both the Australian Consumer Law and the Australian Securities and Investments Commission Act.
  • The full range of penalties and remedies, including civil penalties and actions for damages and compensation, should be available for breach of an unfair trade practices prohibition.

Enforcing a provision against unfair trade practices would ensure more equitable economic transactions, and would foster a healthier marketplace, particularly benefiting vulnerable individuals unable to protect their own interests. Lastly, fair transactions contribute to the development of a cohesive social environment and shared values, aligning with the Federal Government’s commitment to wellbeing.

This submission was jointly made by the Consumer Policy Research Centre and the following organisations:

Related content:

Report: How Australia can stop unfair business practices – CPRC

Event: Make unfair illegal – CPRC

Previous event: UTP Webinar – CPRC

Download Submission

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