ACCC announces priorities and strives for tougher penalties

The ACCC is prioritising reviews of debt collection and private health insurance, its chair Rod Sims said yesterday.

Introducing the 2015 edition of the ACCC's Compliance and Enforcement Policy at CEDA in Sydney, Sims said the ACCC would be "seeking to emphasise that the size of penalties in particular cases must be sufficient to provide appropriate deterrence. "

Late last year, the Financial Services Inquiry identified competition as one of the main areas where there was significant scope to improve the functioning of the financial system, Sims said.

He noted that, "in the financial sector there is always a tension between financial regulators focusing on prudential and competition issues [and] Murray wants more focus on the latter."

"No matter how many competitors there are, stable oligopolies do not yield the best results. Markets need to be constantly and fully contestable," according to Sims, referencing the FSI's report.

"Cartel conduct, anti-competitive agreements and practices, and misuse of market power are three of the ACCC's enduring priorities, alongside product safety.

"The detriment caused to both consumers and competition means these forms of conduct will always be in our sights," he said.

Sims' concern over competition in financial services mirrored that of his fellow regulators in the UK, with news that the Financial Conduct Authority is to launch its first wholesale market study into investment and corporate banking, to assess whether competition in the sector is working properly.

Online UK news site Finextra reports that the FCA is concerned that "limited clarity over price and quality" of services may make it difficult for clients to assess whether they are getting value for money, and that "the bundling and cross selling of services could make it difficult for new entrants or smaller established firms to challenge established large players in the market."

Terms of reference for the investigation will be published "in the Spring" - that is, in coming months - and the FCA will then seek feedback from industry, trade bodies and clients.