Competition and Consumer Amendment (Industry Code Penalties) Act 2014

The Competition and Consumer Amendment (Industry Code Penalties) Act 2014 amended the Competition and Consumer Act 2010 to add a new infringement notice regime for certain breaches of industry codes. The new rules sit in Division 2A of Part IVB.

The core change is practical. If the ACCC has reasonable grounds to believe a person has contravened a civil penalty provision of an industry code, it may issue an infringement notice. That gives the ACCC an enforcement option other than immediately starting court proceedings for a pecuniary penalty order under section 76.

The Act does not replace court enforcement. It creates an alternative pathway. The ACCC does not have to issue an infringement notice before going to court, and if a notice is not issued, or is withdrawn, court proceedings can still be brought. The legislation also makes clear that if a notice is not complied with, a court can impose a higher penalty than the amount stated in the notice.

This regime only applies to civil penalty provisions in a prescribed industry code. That is the key scope question. A business is not caught just because it operates in trade or commerce generally. It must be subject to an industry code prescribed under the Competition and Consumer Act framework, and the alleged breach must involve a civil penalty provision in that code.

Common examples of prescribed codes that businesses often look at include the Franchising Code of Conduct, the Horticulture Code and the Food and Grocery Code of Conduct. Whether a particular business is covered depends on the code itself and the business relationship involved. For example, a franchise arrangement may bring both franchisors and franchisees into the code framework, while a supply chain arrangement may bring traders, wholesalers, retailers or growers into a different code.

Businesses usually outside this page are those with no prescribed industry code applying to their operations. Even then, it is worth checking carefully before assuming the regime is irrelevant. A business can move into scope by changing its model, entering a franchise network, or joining a regulated supply arrangement.

The ACCC may issue an infringement notice if it has reasonable grounds to believe that a person has contravened a civil penalty provision of an industry code. The Act does not require the ACCC to issue a notice in every case. It simply gives the ACCC power to do so.

There are several built-in limits. The ACCC must not issue more than one infringement notice to the same person for the same alleged contravention. A notice also has no effect if it is issued more than 12 months after the day the alleged contravention occurred. It also has no effect if it relates to more than one alleged contravention by the person. In other words, each notice must be tied to one alleged contravention only.

In practice, the trigger is not the Act itself but the underlying code obligation. The conduct that creates risk will depend on the code. That may include failures to provide required documents, failures to follow code procedures, or other conduct that the code identifies as a civil penalty provision. Businesses should read the relevant code closely rather than relying on general assumptions.

The Act sets out what an infringement notice must contain. This is important for businesses checking whether a notice is valid on its face. The notice must be uniquely identified and dated. It must name the person and their address, identify the ACCC and explain how the ACCC can be contacted.

It must also give details of the alleged contravention, including the day of the alleged contravention and the civil penalty provision of the industry code that was allegedly contravened. The notice must state the maximum pecuniary penalty that a court could order under section 76 for the alleged contravention, and it must specify the penalty payable under the notice itself.

The notice must say that the penalty is payable within the infringement notice compliance period, that it is payable to the ACCC on behalf of the Commonwealth, and how payment is to be made. It must also explain the effect of the provisions dealing with payment, non-payment, the compliance period and withdrawal.

The Act fixes the infringement notice amount by reference to penalty units. For a body corporate, the notice penalty must be 50 penalty units. For a person who is not a body corporate, the amount must be 10 penalty units.

The Act also amended the broader industry code framework so that, if regulations prescribe an industry code, the code may prescribe pecuniary penalties for civil penalty provisions up to 300 penalty units. That is separate from the infringement notice amount. The infringement notice amount is the set amount in the Act. The court penalty exposure depends on the code and the section 76 framework.

The dollar value of a penalty unit is not stated in this Act. It is set by the Crimes Act 1914 (Cth) and may be updated from time to time. Businesses should always check the current penalty unit value before calculating financial exposure from a notice or from a code provision.

If the person pays the penalty specified in the infringement notice within the compliance period, in accordance with the notice, and the notice is not withdrawn, the Act gives two important protections.

First, the person is not, merely because of the payment, regarded as having contravened the civil penalty provision. Second, no proceedings, whether criminal or civil, may be started or continued against that person by or on behalf of the Commonwealth in relation to that alleged contravention.

That means payment resolves the alleged contravention for Commonwealth enforcement purposes, provided the statutory conditions are met. It does not mean the underlying code can be ignored in future. Businesses should still fix the process, document or conduct that led to the notice so the issue is not repeated.

If the penalty is not paid within the infringement notice compliance period, and the notice is not withdrawn, the person remains liable to proceedings under section 76 in relation to the alleged contravention. The Act also states that the infringement notice regime does not prevent a court from imposing a higher penalty than the amount specified in the notice.

For businesses, the practical point is that an infringement notice is not the ceiling on exposure. It is an administrative enforcement option. If it is not resolved within the statutory process, the matter can move into court proceedings where the financial and operational consequences may be greater.

The standard compliance period is 28 days beginning on the day after the day the infringement notice is issued. The ACCC may extend that period by written notice if it is satisfied that it is appropriate to do so. Only one extension can be given, and it cannot be longer than 28 days.

A person who receives a notice may make written representations to the ACCC seeking withdrawal of the notice. The Act gives a limited protection for that process. Evidence or information given by the person, or their representative, in the course of making those representations is not admissible against them in proceedings, except proceedings based on the evidence or information being false or misleading.

The ACCC may withdraw a notice by written notice if it is satisfied that it is appropriate to do so, whether or not the person asked for withdrawal. To be effective, the withdrawal notice must be given within the compliance period for the notice. If the notice is withdrawn after payment has already been made, the ACCC must refund an amount equal to the amount paid.

This Act does not create a general obligation for every business to do something new. Its practical effect depends on whether a prescribed industry code applies to your business and whether that code contains civil penalty provisions relevant to your conduct.

For businesses in scope, the practical obligations are to comply with the code, identify which provisions are civil penalty provisions, maintain systems that support compliance, and respond quickly if the ACCC issues a notice. Because each notice can only relate to one alleged contravention and must be issued within 12 months, businesses should keep records that help identify what happened, when it happened and which code provision may be involved.

Useful internal checks include reviewing disclosure documents, contract templates, onboarding processes, dispute handling steps, and staff training against the actual code requirements. If your business receives a notice, check the alleged contravention, the date, the code provision identified, the penalty amount, and the compliance deadline stated in the notice.

The Act was assented to on 24 September 2014 and commenced on 1 January 2015. It is in force. The page linked below is the current public legislation entry for the Act on the Federal Register of Legislation.

Because this Act works by amending the Competition and Consumer Act 2010, businesses should read it together with the current text of Part IVB, the relevant prescribed industry code, and the current penalty unit value under federal law before relying on any compliance calculation.

This page is based on the text of the Competition and Consumer Amendment (Industry Code Penalties) Act 2014 as published on the Federal Register of Legislation. The key operative changes are the insertion of Division 2A into Part IVB of the Competition and Consumer Act 2010, the notice penalty amounts of 50 penalty units for bodies corporate and 10 penalty units for others, the 28 day compliance period with one possible extension, the withdrawal mechanism, and the amendment allowing prescribed industry codes to include civil penalty provisions with pecuniary penalties up to 300 penalty units.

Before relying on this page, check three things: whether your business is actually covered by a prescribed industry code, whether the relevant code provision is a civil penalty provision, and the current dollar value of a penalty unit.