ACCCount 1 October to 31 December 2012



2876550-698500-26035076200ReportACCCountA report of the Australian Competition and Consumer Commission’s and Australian Energy Regulator’s activities1 October to 31 December 201211493502684780Australian Competition and Consumer Commission23 Marcus Clarke Street, Canberra, Australian Capital Territory 2601? Commonwealth of Australia 2013This work is copyright. Apart from any use permitted by the Copyright Act 1968, no part may be reproduced without prior written permission from the Commonwealth, available through the Australian Competition and Consumer Commission. Requests and inquiries concerning reproduction and rights should be addressed to the Director Publishing, Australian Competition and Consumer Commission, GPO?Box?3131, Canberra ACT 2601 or by email to publishing.unit@.au..auContents TOC \o "1-3" \h \z \u Overview PAGEREF _Toc349662334 \h 51.Maintain and promote competition and remedy market failure PAGEREF _Toc349662335 \h 7Enforcing the Act for businesses and consumers PAGEREF _Toc349662336 \h 7Competition enforcement PAGEREF _Toc349662337 \h 7Maintaining competition in concentrated sectors PAGEREF _Toc349662338 \h 9Mergers PAGEREF _Toc349662339 \h 9Remedy market failure PAGEREF _Toc349662340 \h 11Authorisations and notifications PAGEREF _Toc349662341 \h 112.Protect the interests and safety of consumers and support fair trading in markets PAGEREF _Toc349662342 \h 18Consumer protection outcomes PAGEREF _Toc349662343 \h 18Product safety PAGEREF _Toc349662346 \h 243.Promote the economically efficient operation of, use of and investment in monopoly infrastructure PAGEREF _Toc349662347 \h 27Energy PAGEREF _Toc349662348 \h 27State of the Energy Market report PAGEREF _Toc349662349 \h 27Consultation on the new regulation reform program in 2013 PAGEREF _Toc349662350 \h 27Decisions and determinations PAGEREF _Toc349662351 \h 28Telecommunications PAGEREF _Toc349662352 \h 31Decisions and determinations PAGEREF _Toc349662353 \h 31Reports released PAGEREF _Toc349662354 \h 32Fuel price monitoring PAGEREF _Toc349662355 \h 32Aviation and airports PAGEREF _Toc349662356 \h 35Decisions and determinations PAGEREF _Toc349662357 \h 35Rail access PAGEREF _Toc349662358 \h 36Decisions and determinations PAGEREF _Toc349662359 \h 36Waterfront and shipping PAGEREF _Toc349662360 \h 37ACCC 2011 – 12 Container Stevedoring Monitoring Report PAGEREF _Toc349662361 \h 37Water PAGEREF _Toc349662362 \h 38State Water price approval/determination pre-application consultation PAGEREF _Toc349662363 \h 384.Increase our engagement with the broad range of groups affected by what we do PAGEREF _Toc349662364 \h 39Outcomes from International forUMS and conferences PAGEREF _Toc349662365 \h 39International partnerships and collaboration PAGEREF _Toc349662366 \h 39International cooperation PAGEREF _Toc349662367 \h 40Consumer engagement PAGEREF _Toc349662368 \h 40Consumer Consultative Committee PAGEREF _Toc349662369 \h 40Consumer protection issues in Indigenous communities PAGEREF _Toc349662370 \h 40Product safety awareness raising PAGEREF _Toc349662371 \h 41Business engagement PAGEREF _Toc349662372 \h 41Infrastructure Consultative Committee PAGEREF _Toc349662373 \h 41Franchising Consultative Committee PAGEREF _Toc349662374 \h 41Small Business Consultative Committee PAGEREF _Toc349662375 \h 41Energy Marketing Forum PAGEREF _Toc349662376 \h 41Utility Regulators’ Forum PAGEREF _Toc349662377 \h 42Market research PAGEREF _Toc349662378 \h 425.Appendices PAGEREF _Toc349662379 \h 43Major speeches PAGEREF _Toc349662380 \h 43Complaints and inquiries PAGEREF _Toc349662381 \h 44ENFORCEMENT OUTCOMES & matters IN COURT PAGEREF _Toc349662382 \h 47Litigation PAGEREF _Toc349662383 \h 47Undertakings accepted and Infringement Notices Paid PAGEREF _Toc349662384 \h 50Infringement Notices PAGEREF _Toc349662385 \h 51OverviewStrong enforcement outcomes featured in the December 2012 quarter along with the commencement of action to improve consumer welfare; protect competition and put a stop to conduct which is anti-competitive or harmful to Australians. Highlights for the quarter include:responding to over 55?000?complaints and inquiries from businesses and consumerssecuring over $42 million in penalties for breaches of the Competition and Consumer Act 2010 (Competition and Consumer Act)commencing four new civil proceedings in the Federal Court obtaining five court enforceable undertakingsreceiving payment of $39,600? for 6 infringement notices under the Australian Consumer Lawassessing 56 merger transaction and issuing 6 final authorisation determinations.a total of 1?132?111 unsafe, faulty consumer goods being recalled as a result of the ACCC’s negotiations. The ACCC continued to pursue remedies through the Federal Court against companies believed to be in breach of the law. We instituted our latest civil cartel proceeding against Yazaki Corporation, a Japanese company, and its Australian subsidiary, Australian Arrow Pty Ltd. The ACCC alleges that these parties engaged in cartel conduct, market sharing and price fixing, in relation to the supply of wire harnesses to Toyota Motor Corporation and its related entities in Australia. This action followed civil proceedings earlier in the quarter, against Renegade Gas Pty Ltd (trading as Supagas NSW, a privately owned company) and Speed-E-Gas (NSW) Pty Ltd (a wholly owned subsidiary of Origin Energy Limited).The ACCC alleges that these companies gave effect to an anti-competitive cartel arrangement which included not supplying liquid petroleum gas (LPG) cylinders for forklifts to each others' customers. These customers were both small and large scale businesses. These actions sit within a broader set of activities the ACCC has invested in with a view to preventing and terminating cartel behaviour. Since 2006, the ACCC has been pursuing a number of airlines for alleged cartel conduct in the air cargo industry. December 2012 saw the awarding of penalties against a number of the defendants including Cathay Pacific Airways Ltd, Emirates, Singapore Airlines Cargo Pty Ltd and Thai Airways International, taking the total penalties to date to $98.5?million. Proceedings continue against Air New Zealand Ltd and PT Garuda Indonesia Ltd.The Federal Court imposed a $1 million penalty against Cotton On Kids and Cotton on Clothing after it sold unsafe children’s nightdresses and pyjamas. The penalties imposed are the highest imposed against a company for breaches of a mandatory product safety standard. The ACCC also achieved a number of significant penalties against various traders for breaches of the fair trading and consumer protection provisions of the Competition and Consumer Act including; UNJ Millenium and Pepe’s Ducks for false advertising; and single price provision breaches by Air Asia Berhad. These judgments take to $23.78 million the total penalties awarded by the Federal Courts under the Australian Consumer Law pecuniary penalty regime in 33 consumer protection and fair trading proceedings that have been resolved as at 31 December 2012.At the end of the quarter, the ACCC had 30 cases before the Federal Court, with 9 cases awaiting judgment. In addition to undertaking significant work assessing competition issues in the fuel and supermarket industries; some of the significant traders that we commenced court action against were: eleven Harvey Norman franchisees for allegedly misrepresenting consumer rights Hewlett-Packard in relation to a number of alleged misrepresentations about statutory warranties and consumer guarantee rightsDulux relating to claims about the temperature reducing capabilities of particular paint products.In the December 2012 quarter the ACCC’s responded to 55?791 complaints and inquiries from consumers and businesses. Scams accounted for 41 per cent of contacts made to the ACCC, with ‘advanced fee/up-front payment’ scams accounting for nearly 27.5 per cent of all scam complaints. Of the complaints and inquiries entered into the ACCC’s database, 447 matters were flagged for enforcement assessment. Building on the work of Consumer Affairs Victoria, the ACCC released a free ‘smart phone’ app for consumers named ‘ACCC Shopper’ to coincide with the busy Christmas shopping period. The app includes consumer information on warranties, refunds and lay-bys, and allows users to set reminders for their gift vouchers and warranties, and stores photos of receipts. It also includes information about country of origin food labelling and olive oil claims. The app was downloaded more than 5000 times in the first week following its release. The aviation sector has featured prominently in our merger and authorisation assessments. On 20 December 2012 the ACCC issued a draft determination proposing to grant authorisation to an alliance between Qantas Airways Limited and Emirates. The authorisation allows Qantas and Emirates to coordinate certain aspects of their businesses which, in the absence of the authorisation, may raise concerns under the Competition and Consumer Act. The ACCC also plays a key role in protecting and ensuring efficient access to Australia’s monopoly infrastructure. Since the deregulation of the wheat industry in 2012, the ACCC has been responsible for ensuring exporters are able to access port terminals to ensure healthy competition in this critical export market. Since accepting access undertakings from the port terminal operators, the ACCC has been monitoring compliance with the undertakings and in November 2012 decided not to object to long-term access agreements offered by GrainCorp to users of its bulk grain facilities on the east coast of Australia. The quarter was also marked with the release of a number of major regulatory reports, including the AER’s sixth State of the Energy Market Report. The report noted that the main driver of higher retail energy prices has been rising charges for using energy networks—that is, the poles and wires, and gas pipelines that transport energy to customers. A number of factors have driven higher network charges. Some factors—forecast growth in peak energy demand, the need to replace ageing equipment, and higher financing costs due to conditions in global financial markets—were largely unavoidable. But other cost pressures were difficult to justify.The ACCC released its fourth Petrol Monitoring Report that examines the prices, costs and profits of unleaded petrol in Australia. One of the key findings of the report identified that even with the recent increases, petrol prices in Australia remain among the lowest in the OECD. Healthy competition between businesses in Australian and global markets delivers innovation, lower prices, greater efficiencies and more choice for customers as businesses try to win market share and make profits. For competition to remain healthy, businesses need to operate within boundaries of acceptable and fair behaviour towards their customers, competitors and suppliers. Those boundaries are set out in the Competition and Consumer Act and the other Acts the ACCC and the AER enforce. Our role is critical in making markets work for consumers now and in the future.Maintain and promote competition and remedy market failureEnforcing the Act for businesses and consumersCompetition enforcement In the December 2012 quarter, the ACCC was involved in eight proceedings relating to competition matters in various industries. A number of proceedings are highlighted below while a complete list is included in the appendix. In this period, the ACCC also undertook significant work to consider competition issues in the fuel and supermarket industries.These actions and outcomes demonstrate the ACCC’s continued focus on maintaining and promoting competition and remedying market failures.ProceedingsCartelsAustralia Arrow Pty LtdThe ACCC instituted proceedings in December 2012 in the Federal Court against Yazaki Corporation and its wholly owned Australian subsidiary Australia Arrow Pty Ltd for engaging in alleged cartel conduct, market sharing and price fixing, in relation to the supply of wire harnesses to Toyota Motor Corporation and its related entities in Australia. Wire harnesses are electrical systems that facilitate the distribution of power and the sending of electrical signals to various components of a motor vehicle. The ACCC is seeking pecuniary penalties, declarations, injunctions and costs.CartelsAir cargo – various airlinesCathay Pacific Airways Ltd, Emirates, Singapore Airlines Cargo Pte Ltd and Thai Airways International were ordered to pay $11.25 million, $10 million, $11.75 million and 7.5 million respectively for price fixing of surcharges on international freight carriage. This brings the total penalties to $98.5 million imposed on cartel participants since the ACCC’s investigation into alleged cartel activity in air cargo services began in 2006. Proceedings continue against Air New Zealand Ltd and PT Garuda Indonesia Ltd.CartelsRenegade Gas Pty Ltd (trading as Supagas NSW) and Speed-E- Gas (NSW) Pty LtdIn August 2010 the ACCC instituted proceedings in the Federal Court in Sydney against Renegade Gas Pty Ltd (trading as Supagas NSW) and Speed-E- Gas (NSW) Pty Ltd. The ACCC alleges that these companies, through their senior executives and sales staff, gave effect to an anti-competitive cartel arrangement which included not supplying liquid petroleum gas (LPG) cylinders for forklifts to each others’ customers. Proceedings continued in the quarter.Court-enforceable undertakingsOn 30 October 2012 the ACCC received a court-enforceable undertaking from Chemical Formulators Pty Ltd (Chemform) after admitting that it was likely to have engaged in resale price maintenance in relation to the supply of commercial cleaning products in Australia. Chemform undertook to not engage in resale price maintenance in the future, revise its distributor agreement to ensure it does not contain a clause preventing distributors from discounting the price of Chemform products, send a copy of the revised distributor agreement to distributors and advise them that they are free to set the minimum price at which they sell the products, and implement a Competition and Consumer Law Compliance Program.On 18 December 2012 the ACCC accepted a court-enforceable undertaking from hearing aid wholesaler and retailer, Oticon Australia Pty Ltd, which acknowledged that it engaged in resale price maintenance in the supply of hearing aids to retailers in Australia. Oticon undertook to refrain from engaging in the conduct in the future and maintain and continue to implement a compliance program. Continuing investigationsDuring the December quarter, the ACCC also undertook significant activity in projects involving fuel, supermarkets and competition issues in the online retail sector. Concentrated sectorsIn its Compliance and Enforcement Policy, the ACCC identified that it will prioritise its competition and consumer work in concentrated sectors including fuel and supermarkets sectors. In accordance with this, it continues to progress a number of matters in these sectors including those noted rmation sharing – Fuel CompaniesOn 3 May 2012 the ACCC announced it had commenced an investigation into price information sharing arrangements in relation to the retail petrol sector because of concerns that such arrangements may be in breach of the Act.The petrol price sharing arrangements allow for the private and very frequent exchange of comprehensive retail price information between the major petrol companies. The ACCC is concerned that this allows petrol retailers to signal price movements, monitor competitors’ responses, and react to them. The ACCC is concerned that these arrangements may lessen price competition in petrol retailing to the detriment of consumers. Shopper docketsThe ACCC is considering the competition implications of the trend of larger and longer fuel shopper docket offers. The ACCC is working with industry participants to form a considered view.SupermarketsIn early 2012 following concerns voiced publicly about the conduct of major supermarket chains, the ACCC sought information from supermarket suppliers regarding the way in which they were treated by supermarkets. A range of concerns were voiced and the ACCC sought information from the supermarkets regarding some of that conduct. Broadly speaking, suppliers have complained that they are being treated unconscionably by major supermarket chains as well as allegations that the supermarkets are misusing their market power. The ACCC will look closely at these allegations, and expects that considerable work will be required before deciding whether any action ought to be taken.Online CompetitionThe ACCC is continuing to monitor online trading activities and is considering matters that affect competitive behaviour in the online trading environment. Activities by online traders that may be considered as anti-competitive include the misuse of market power, exclusive dealing distribution arrangements and controlling prices.Maintaining competition in concentrated sectorsMergers In the December 2012 quarter, there were 56 matters considered by the ACCC (39 matters were pre-assessed as not requiring review and 17 matters were reviewed on confidential public basis). Of the 15 matters reviewed publicly, 4 were opposed outright; 9 were cleared unconditionally and 1?matter cleared subject to an undertaking. During this period the ACCC also accepted 1?variation to an undertaking (Pfizer). The ACCC expressed concerns in 1 confidential review of a merger proposal. There were 18?Foreign Investment Review Board (FIRB) requests assessed in the quarter.Table 1:?? Matters assessed and reviews undertaken – 1 October to 31 December 2012?ConfidentialPublicTotalPre-assessed 1 October – 31 December 201239039Total reviews undertaken 1 October – 31 December 201221517Total reviews can be broken down into the following categories:Not opposed099Finished—no decision (including withdrawn) 101Opposed outright044Confidential review—ACCC concerns expressed101Resolved through undertakings 011Variation to undertaking accepted011Variation to undertaking rejected000Total matters assessed and reviews undertaken411556Note: Only public matters can be resolved with undertakingsSignificant merger decisions this quarterThe ACCC opposed four proposed mergers reviewed publicly:Woolworths Limited and Lowe’s Companies Inc (Joint Venture) proposed acquisition of G Gay & Co hardware storesSeven Group Holdings Limited proposed acquisition of Consolidated Media Holdings LimitedSonic Healthcare Limited proposed acquisition of pathology businesses of Healthscope Limited in Queensland and Western Limited proposed acquisition of interests associated with the Trading Post brandThe public review of Nestle’s proposed acquisition of Pfizer Nutrition from Pfizer Inc was resolved through undertakings.Merger NESTLE / PFIZEROn 24 May 2012 the ACCC commenced a review of Nestlé’s proposed acquisition of the global infant nutrition business of Pfizer Nutrition.Globally, this acquisition included Pfizer Nutrition’s baby formula business and prenatal and maternal vitamin products. In Australia, the areas of overlap between Nestlé and Pfizer Nutrition were in the wholesale supply of infant formula and follow-on-milks, which are a substitute for human breast milk for young children aged 0 to 12?months and growing-up milks, which are nutritional milks for children aged 1 to 5?years.The ACCC undertook extensive consultation on the proposed acquisition with a strong focus on the extent to which the removal of Pfizer Nutrition, one of Nestlé’s closest competitors in the supply of infant formula and toddler milk, would reduce competition relative to the present market structure.On 31 August 2012 the ACCC issued a Statement of Issues outlining the ACCC’s preliminary competition concerns as well the broad principles of a proposed remedy offered by Nestlé to address these concerns.Following further market consultation on the terms of the proposed remedy and discussions with Nestlé and Pfizer Nutrition, the ACCC accepted a court-enforceable undertaking from Nestlé aimed at ensuring that the current level of competition in the relevant markets will be maintained through the creation of a strong third major supplier of infant formula and toddler milk in Australia. It requires Nestlé to sell an exclusive ten year licence for Pfizer Nutrition’s infant nutrition S-26/SMA brand portfolio in Australia to a purchaser to be approved by the ACCC, followed by a further ten year ‘black out’ period in which Nestlé will not be permitted to re-enter the markets with Pfizer Nutrition’s brands.On 22 November 2012 the ACCC accepted the undertaking and announced it would not oppose the proposed acquisition.Statement of IssuesThe ACCC will publicly release a Statement of Issues outlining the basis and facts where the ACCC has come to a preliminary view that a merger raises competition concerns that require further investigation. The purpose of releasing a Statement of Issues is to increase transparency and allows for the ACCC to obtain further information that may either alleviate or reinforce the concerns of the ACCC and in some cases provides an opportunity for merger parties to consider putting forward undertakings to resolve competition concerns.In this quarter the ACCC publicly released a Statement of Issues on the following matters: Ltd proposed acquisition of assets associated with Trading Post - issued on 19 October 2012 Woolworths Limited - proposed acquisition of the Hawker Supa IGA - issued on 6?December 2012 Telstra Corporation Limited proposed acquisition of Adam Internet Pty Ltd - issued on 20 December 2012 Concentrated marketsFocus on acquisitions in concentrated marketsIn June 2012 ACCC Chairman Rod Sims announced that the ACCC would be focusing on incremental small retail acquisitions by the major supermarket chains (MSCs) in light of concerns about the continued expansion of Woolworths and Coles in various sectors. The ACCC was also aware of concerns about the time that can be taken to review these acquisitions. The ACCC considered the best way forward was for the ACCC and the MSCs to agree a voluntary streamlined notification and review protocol which would provide benefits for both the ACCC and MSCs. The ACCC sought agreement from Wesfarmers and Woolworths regarding the types of acquisitions that should be notified and the information that would be provided. In return, the ACCC proposed to expedite pre-assessments and truncate timelines for the first stages of a merger review.On 7 December 2012 the ACCC announced agreement with Coles of a streamlined assessment protocol for single supermarket acquisitions, including in relation to new supermarket developments, for an initial six month trial period. Agreement was not reached, however, to include acquisitions by Coles or Bunnings in the liquor or hardware sectors in the protocol. The ACCC was disappointed that no agreement on the protocol was reached in any of the sectors with Woolworths.The ACCC will continue to pay close attention to all acquisitions in the supermarket, liquor, hardware and fuel sectors by the major supermarket chains, including new greenfield store developments. The ACCC will do this not only through notification by the MSCs and its own monitoring activities but, importantly, through information received from the market. Indeed, information received from the public will be important, including particularly in relation to greenfield developments.Remedy market failureAuthorisations and notificationsIn circumstances where competitive markets do not work to deliver the most efficient outcomes it may be in the public interest to allow certain restrictions on competition. This is particularly where there are features in a market that may lead to market failure – where the market left to itself does not achieve the most optimal outcomes. In many ways the authorisation and notification provisions of the Act allow the ACCC to consider the benefits from allowing conduct that addresses a market failure but which nonetheless restricts competition. AuthorisationsBroadly, the ACCC may ‘authorise’ businesses to engage in conduct that might otherwise amount to a breach of the Act where it is satisfied that the public benefit outweighs any public detriment, including from a lessening of competition.In assessing the likely public benefits and detriments of an authorisation application, the ACCC undertakes a transparent public consultation process, placing submissions on a public register, subject to any claims of confidentiality. After considering submissions, the ACCC will issue a draft decision and provide an opportunity for interested parties to request a conference to discuss the draft decision. The ACCC will then reconsider the application in light of any further submissions and release its final decision.Table 2:??Authorisations received and decisions issued–October to December 2012Total authorisations received 1 October – 31 December 2012 10 (16)*New 9 (15)Revocation and substitution 0 (0)Minor variations 1(1)Decisions issued 1 October – 31 December 2012 20 (44)Draft determinations 10 (22)Final determinations 6 (15)Interim decisions 4 (7)* no. proposals (no. applications)Significant authorisationsSignificant authorisations decided during the December 2012 quarter included:Medicines Australia Limited - Revocation and Substitution - A91316 - A91320On 4 July 2012 Medicines Australia Limited applied for reauthorisation (application for revocation and substitution) for its Code of Conduct Edition 17. The Code of Conduct sets standards for the advertising and promotion of pharmaceutical products. On 20 December 2012 the ACCC issued a determination granting reauthorisation for a period of two years.Australian Bankers' Association Inc. - Authorisation - A91312The Australian Bankers' Association on behalf of its members, proposes to implement an agreement which would provide customers within identified remote Indigenous communities with access to fee-free ATM transactions. On 8 November 2012 the ACCC issued a determination granting authorisation for a period of five years.Vulnerable and disadvantaged consumersATM fees in selected very remote Indigenous communitiesOn 29 May 2012 the Australian Bankers’ Association (ABA) applied to the ACCC for authorisation of its project to reduce total ATM fees charged in very remote Indigenous communities. The ACCC considered that there was likely to be significant public benefit from the provision of fee-free ATM withdrawals and balance inquiries from the selected ATMs. The ACCC considered that this likely public benefit would outweigh the likely minimal public detriment, particularly given the limited scope and length of time of the project.On 8 November 2011 the ACCC granted authorisation of the project for a period of five years, until 1 December 2017. Under the ABA’s project, participating financial institutions will offer fee-free withdrawals and balance inquiries to their customers at selected existing ATMs in very remote Indigenous communities. In order to achieve this, participating banking providers will subsidise the costs of participating ATM deployers in providing these transactions at selected ATMs. The total number of ATMs included in the project can extend to a cap of 85 ATMs, although more than 85 ATMs may be included in the project if further external funding is provided from government or other sources. The communities to benefit from the ABA project are located across the Northern Territory, Queensland, South Australia and Western Australia. The ABA coordinated this project in response to a report by the ATM Taskforce, released on 25 May 2012. The ATM Taskforce was appointed by the Federal Government in 2010 for the purposes of reviewing high ATM fees being incurred in remote Indigenous communities.Authorisation by the ACCC means that people in these very remote Indigenous communities now have lower costs for use of ATMs.Draft determinations Significant authorisations for which a draft determination was issued during the December 2012 quarter (and no final determination) included:Qantas Airways Limited & Jetstar Airways Pty Ltd - Authorisation - A91314 & A91315On 14 December 2012 the ACCC issued a draft decision which proposes to grant authorisation to Qantas Airways Limited and Jetstar Airways Pty Ltd, for a period of five years, for coordination involving four Asian based Jetstar branded joint ventures: Jetstar Asia, Jetstar Pacific, Jetstar Japan and Jetstar Hong Kong. The proposed authorisation facilitates the Jetstar joint ventures coordinating with each other on passenger and cargo services, predominately on intra-Asian routes. It also allows their airline owners to support and expand each joint venture and to relate the joint ventures to their own businesses. A final determination is expected in the first quarter 2013.Qantas Airways Limited & Emirates - Authorisations - A91332 & A91333On 20 December 2012 the ACCC issued a draft determination proposing to grant authorisation, subject to a condition, for five years for an alliance between Qantas Airways Limited and Emirates. Under the alliance, the two airlines will cooperate on passenger and freight operations across their networks.The ACCC is of the view that the main benefit arising from the alliance is an improved product and service offering by the two airlines to their customers. This includes increased customer access to each others’ flights, destinations and frequent flyer programs. The alliance is likely to result in some public detriments through its effect on competition where Qantas and Emirates currently offer overlapping services. In most of these regions, there are factors which are likely to mitigate the public detriment, including continuing competition from a number of established airlines.However, on the overlapping routes between Australia and New Zealand, the ACCC is concerned that the alliance may have an increased ability and incentive to reduce or limit growth in its capacity in order to raise airfares. Therefore, the ACCC is proposing a condition to restrict the ability of the alliance in this regard.On 20 December 2012, the applicants applied for interim authorisation to commence the proposed conduct as soon as possible. The ACCC granted interim authorisation on 17 January 2013, on the condition that the conduct for which authorisation is sought is not engaged in for services between Australia and New Zealand.A final determination is expected to be issued by the end of March 2013. Australian Medical Association Limited - Authorisation - A91334On 12 December 2012 the ACCC issued a draft determination proposing to allow GPs in single practices to set practice prices and collectively bargain. Practices will need to meet particular business criteria in order to be considered as a single practice. The ACCC proposes to allow GPs within single practices to collectively set prices and bargain over visiting medical officer services and with Medicare Locals. The ACCC proposes to grant authorisation for five years, as sought by the AMA. Authorisation will extend to all GPs, not just AMA members.The authorised arrangements are similar to the authorisations previously granted to Royal Australian College of General Practitioners members which lapsed in mid 2011. Australian Tyre Industry Council - Authorisation - A91336 & A91337The ACCC issued a draft decision proposing to authorise a national Tyre Stewardship Scheme for five years. The aim of the Scheme is to reduce the amount of used tyres entering landfill, being illegally dumped or exported overseas.The Scheme has the potential to play an important role in reducing the volume of used tyres entering the domestic waste stream or being exported overseas and burned for fuel in an environmentally unsustainable way. This will reduce the environmental and health and safety hazards associated with such disposal methods. Broadly, all participants in the Scheme must contribute to the environmentally sound use of end of life tyres, elimination of the inappropriate export of end of life tyres from Australia, elimination of the illegal dumping of end of life tyres and elimination of the disposal of end of life tyres to landfill. It also involves a levy of $0.25?per passenger car tyre equivalent being imposed on tyre importers to fund the operation of the Scheme. Among other things, levy funds will be used by the Scheme’s administrator to fund research and development activities for tyre-derived products. In issuing the draft decision the ACCC was satisfied that the voluntary nature of the Scheme the small cost of the industry levy means there is likely to be little, if any, public detriment generated by the SchemeNotificationsNotification is an alternate process to authorisation as a means for businesses to obtain protection from legal action for certain conduct including exclusive dealing and collective bargaining.Exclusive dealing notificationsExclusive dealing (where a business trading with another imposes restrictions on the other businesses freedom to choose with whom, in what or where it deals) is prohibited under the Act in certain circumstances. Third line forcing is a type of exclusive dealing conduct which involves the supply of goods or services subject to a condition that the buyer must also acquire certain goods or services from a third party. Third line forcing conduct is prohibited outright while other forms of exclusive dealing are only a breach of the Act if they substantially lessen competition.The exclusive dealing notification process provides protection from legal action for potential breaches of the exclusive dealing provisions of the Act where the ACCC assesses there is sufficient public benefit. Lodging a notification with the ACCC provides protection from legal action automatically from the lodgement date (or soon after in the case of third line forcing conduct), which remains in force unless revoked by the ACCC. Notifications can be reviewed by the ACCC at any time.The ACCC may revoke the protection provided by a notification for third line forcing conduct if it is satisfied that the likely public benefit from the conduct will not outweigh the likely detriment. To revoke a notification for other exclusive dealing conduct the ACCC must be satisfied that the conduct is likely to result in a substantial lessening of competition and the likely benefit to the public will not outweigh the detriment.Table 3:?? Exclusive dealing notification projectsExclusive Dealing NotificationsOct – Dec 2012no. proposals (no. notifications)Matters lodged in the quarter124 (334)Matters requiring a draft notice0 (0)Matters allowed to stand 131 (341)Matters revoked 0 (0)Matters withdrawn 1 (1)Significant notifications that have required consultation in the period (including both new notifications as well as notifications allowed to stand during the period) were:The Hospitals Contribution Fund of Australia Limited - Notification - N95945The Hospitals Contribution Fund of Australia Limited (HCF) proposes to allow physiotherapists to participate in its "More for Muscles program" on condition that participating physiotherapists acquire electronic point of sale payment systems from the Health Industry Claims and Payment Service, or other providers nominated by HCF.Peter McInnes Pty Ltd - Notification - N95877Peter McInnes Pty Ltd (Peter McInnes) appoints various distributors for KitchenAid products and other kitchen products and appliances. Peter McInnes proposes to supply distributors on condition that the distributor will not sell the product beyond a particular territory. Peter McInnes also proposes to supply some nominated distributors on condition that they do not sell particular products, such as KitchenAid products, via the internet. Peter McInnes withdrew the application on 16 November 2012 and the ACCC accordingly discontinued its assessment of the notification and has closed the matter. First Class Taxis Pty Ltd - Notification - N95824First Class Taxis Pty Ltd proposes to lease its taxis to taxi drivers on condition that the taxi driver only acquires Electronic Funds Transfer at Point of Sale (EFTPOS) facilities from a supplier approved by First Class Taxis Pty Ltd.Port Hedland Port Authority - Notification - N96171The Port Hedland Port Authority proposes that all vessels entering and leaving the port (other than very small and manoeuvrable craft) must engage the harbour towage services of BHP Billiton Minerals Pty Ltd.Queensland Rugby Football League Limited - Notification - N95172The Port Hedland Port Authority proposes that all vessels entering and leaving the port (other than very small and manoeuvrable craft) must engage the harbour towage services of BHP Billiton Minerals Pty Ltd.Qube Logistics (Aust) Pty Limited - Notification - N96205Qube Logistics (Aust) Pty Ltd (Qube) manages the storage, maintenance and handling of container park facilities across Australia. To manage container movements to and from Qube's container parks, Qube will require container transport operators to use a booking system administered by Containerchain Pty Ltd (Containerchain).Collective bargaining notificationsGroups of small businesses can lodge a collective bargaining notification, to obtain protection from legal action for the collective bargaining activity. The protection provided by a collective bargaining notification comes into force automatically 14 days after the notification is validly lodged unless the ACCC objects to the notification, and continues for three years. Notifications can be reviewed at any time. Businesses seeking to lodge a valid collective bargaining notification must satisfy a number of requirements—for example each member of the collective bargaining group must reasonably expect that they will make at least one contract with the target and that the value of each member’s transactions with the target will not exceed $3?million per year (this figure differs for certain industries). These requirements do not apply to the authorisation process.Table 4:?? Collective bargaining notification projectsCollective Bargaining NotificationsOct – Dec 2012no. proposals (no. notifications)Matters lodged in the quarter(# of notifications)1 (1)Matters allowed to stand (# of notifications)3 (56)Matters withdrawn/later deemed invalid (# of notifications)0 (0)Matters revoked (# of notifications)0 (0)Matters under consideration at end of quarter 0 (0) Certification Trade MarksUnder the Trade Marks Act 1995, the ACCC has responsibilities in relation to the approval of Certification Trade Marks. A Certification Trade Mark (CTM) certifies that a good or service is of a particular standard; for example, with regard to quality, origin, material or mode of manufacture. The ACCC’s role involves assessing and approving rules for the use of CTMs, including:assessing the requirements that goods / services / persons must meet in order to be eligible to have a Certification Trade Mark applied to them, and assessing the proposed process by which compliance with certification requirements will be judged;examining the rules to ensure they are not in themselves anti-competitive or misleading or deceptive.Certification trade mark‘FREE RANGE’ EGG Certification Trade Mark ApplicationOn 2 November 2012 the ACCC issued an initial assessment of a certification trade mark application by the Australian Egg Corporation Limited (AECL) proposing not to approve the certification trade mark (CTM). The ACCC was concerned that the proposed CTM may mislead consumers about the nature of eggs described as ‘free range’. Additionally the ACCC considered that the proposed CTM did not meet all of the legislative requirements of the Trade Marks Act. On 21 December 2012 the AECL announced it had decided to withdraw its CTM application. The AECL indicated it intends to submit a new CTM application after thoroughly reviewing the issues raised and making any necessary amendments to the minimum standards.The certification scheme was intended to be a national egg quality assurance program that covered on-farm practices relating to the rearing of pullets, grading facilities and the production of eggs. The scheme covered food safety, biosecurity and animal welfare.To inform its assessment of the application the ACCC commenced public consultation on the AECL’s proposed CTM Rules in May 2012. The ACCC received over 1700 submissions with all but seven opposing the application. The majority of submissions were from individual consumers but submissions were also received from egg producers, industry associations, consumer and animal welfare organisations and members of parliament. While the CTM covered a wide range of practices relevant to egg production, the primary focus of submissions was standards for free range egg production. In particular, submissions raised concerns with the permitted maximum outdoor stocking densities (the proposed free range egg standard permitted 20?000 birds per hectare), the proportion of birds accessing the range and beak trimming. In addition to receiving written submissions, the ACCC had discussions with a number of organisations including the AECL, Humane Choice and Humane Society International, RSPCA, Choice, Animal Health Australia, Standards Australia, the Department of Agriculture, Forestry and Fisheries and the Victorian Department of Primary Industries about the application.To inform the assessment process, ACCC officers also visited three free range egg production facilities covering a variety of stocking densities and differing production practices. In its published initial assessment the ACCC concluded that it was concerned that the AECL proposed standards governing free range egg production were inconsistent with consumer expectations and understanding of free range egg production. The ACCC was concerned that the use of the CTM in such circumstances had the potential to mislead or deceive consumers. The ACCC has ceased further consideration of this application following the AECL’s withdrawal of the application.Protect the interests and safety of consumers and support fair trading in marketsConsumer protection outcomesAction to protect consumersIn the December 2012 quarter, the ACCC was involved in 26 proceedings relating to consumer protection. In the period, the ACCC continued to undertake significant work relating to carbon price representations, consumer protection issues in indigenous communities, consumer guarantees, unsolicited selling, scams, and food labelling.These actions and outcomes demonstrate the ACCC’s continuing efforts to protect the interests and safety of consumers and its support for fair trading in markets.ProceedingsThe following matters were commenced in the December quarter:Consumer GuaranteesHarvey Norman FranchiseesProceedings were instituted in the Federal Court Sydney against 11 Harvey Norman franchisees in relation to allegedly misrepresenting consumer rights. The ACCC alleges that the franchisees engaged in misleading or deceptive conduct by making false or misleading representations to consumers about their rights under the consumer guarantee provisions of the ACL. The ACCC is seeking penalties, declarations, injunctions and costs.Consumer GuaranteesHewlett-PackardProceedings were instituted in the Federal Court Sydney against Hewlett-Packard Australia Pty Ltd for alleged misleading or deceptive conduct in relation to consumer rights. The ACCC alleges that HP made false or misleading representations to consumers in relation to consumers’ statutory warranty and consumer guarantee rights; and made false or misleading representations to retailers that HP was not liable to indemnify them if they provided consumers with a refund or replacement without HP’s prior authorisation. The ACCC is seeking declarations, injunctions, civil pecuniary penalties, disclosure orders, adverse publicity orders, non-party consumer redress, implementation of a compliance program and costs.Together with the proceedings against the Harvey Norman franchisees identified above, the proceedings demonstrate the importance the ACCC places on the new consumer guarantee provisions and that consumers are not misled as to their rights.Credence claims premiumDuluxGroupProceedings were instituted in the Federal Court Western Australia against DuluxGroup (Australia) Pty Ltd for alleged false, misleading or deceptive representations in relation to the promotion of the temperature reducing capabilities of its InfraCOOL and Weathershield Heat Reflect paints. The ACCC is seeking declarations, injunctions, corrective notices, non-party consumer redress, penalties and costs.The following matters were finalised during the December 2012 quarter.Online TradingAir Asia BerhadAir Asia Berhad was ordered to pay penalties of $200?000 for contravening the single pricing provisions of the ACL. Other relief included a declaration and a court undertaking restraining Air Asia for a period of three years.Labelling of childrens clothingCotton On KidsThe Federal Court imposed penalties by consent totalling $1 million against Cotton On Kids Pty Ltd in relation to its supply of unsafe children’s nightdresses and pyjamas. The nightwear supplied between September and December 2010, did not comply with the mandatory product safety standard for children’s nightwear and had attached a misleading ‘low fire danger’ label. Other orders included declarations, injunctions, implementation of a trade practices compliance program and contribution towards costs.Credence claimsUNJ MilleniumThe Federal Court ordered Gold Coast retailer UNJ Millenium Pty Ltd to pay a pecuniary penalty of $55?000 after it admitted it made false or misleading claims that sheepskin and wool bedding products were made in Australia, contained 100% sheep wool or contained 100% alpaca wool, when it was not the case. Other outcomes included declarations, injunction, establishment of a trade practices compliance program and costs.Credence claim premiumPepe’s DucksPepe’s Ducks Pty Ltd was ordered to pay $375?000 in pecuniary penalties after engaging in false, misleading or deceptive conduct in relation to the promotion and supply of its duck meat products. Pepe’s Ducks used the phrase ‘open range’ from 2004 to 2012 and the phrase ‘grown nature’s way’ from 2007 to 2012 on its product packaging, website, delivery vehicles, signage, stationery and/or merchandise, often in conjunction with a pictorial representation of a duck in the outdoors walking on grass against a background of a lake with hills behind. Other orders included declarations, injunctions, implement a compliance program, issue corrective notices and costs.These last two proceedings highlight the importance the ACCC places on ensuring that consumers are able to trust that what is on a label is true and accurate and they are not misled into paying a premium for products that don’t match the claims on the label.These cases take to $23.78 million the total penalties awarded by the Federal Courts under the ACL pecuniary penalty regime in 33 consumer protection and fair trading proceedings that have been resolved as at 31 December 2012.Court-enforceable undertakings The ACCC often resolves contraventions of the Act by accepting court-enforceable undertakings under s. 87B of the Act. In these undertakings, which are on the public record, companies or individuals generally agree to:remedy the mischiefaccept responsibility for their actionsestablish or review and improve their trade practices compliance programs and culture.Credence claims premiumALICE SUNDOWN ABORIGINAL ARTOn 6 December 2012 the ACCC received a court-enforceable undertaking from Angela Jane Delgiacco of Alice Sundown Aboriginal Art after making false or misleading representations in a certificate of authenticity for an Indigenous artwork sold on eBay under the username ‘sundownnt01’. Angela Jane Delgiacco undertook for a period of three years, to not produce a Certificate of Authenticity for artwork which contains false or misleading information.Misleading advertising in motor vechile advertisingNISSAN MOTOR COMPANYOn 28 November 2012 the ACCC received a court-enforceable undertaking from Nissan Motor Co (Australia) Pty Ltd and issued three infringement notices totalling $19?800 in relation to misleading representations for the Nissan Dualis vehicle. Nissan undertook to not engage in similar conduct in the future, publish a corrective notice, and appoint an independent compliance professional to undertake a review of their procedures for their advertising and promotional strategies.Bait advertisingCNT CORP PTY LTDOn 15 October 2012 the ACCC received a court-enforceable undertaking from CNT Corp Pty Ltd and issued three infringement notices totalling $19?800 after it offered and charged for wholesale ‘fibre to the premises’ (FTTP) broadband internet services at data transfer rates that its network could not support. CNT Corp undertook to provide affected consumers with credit vouchers redeemable for broadband services, acquire additional backhaul transmission capacity for its Eden Brook network, refrain from engaging in similar conduct in the future and implement a trade practices compliance program. Infringement NoticesIn respect of the Infringement Notices noted above, the ACCC received payment from:CNT Corp Pty Ltd of three infringement notices totalling $19?800Nissan Motor Co (Australia) Pty Ltd payment of three infringement notices totalling $19?800.This takes the total infringement penalties paid up to December 2012 to over $620?000 under the Australian Consumer Law.Other significant activitiesCarbon price representations The ACCC continues to give priority to carbon pricing issues as directed by the Treasurer pursuant to section 29(1) of the Act. This includes:giving priority to the investigation of businesses who engage in practices concerning the impact of a carbon priceencouraging compliance with the Act by informing and educating businesses about their responsibilities under the ACL concerning any statements about impacts of a carbon price on the supply of goods and services in trade and commerceraising awareness amongst consumers about their rights under the ACL and informing them that businesses are prohibited from engaging in misleading and deceptive conduct or making false or misleading representations about the impact of a carbon price on the supply of goods and services in trade or commerce.In the December 2012 quarter the ACCC received over 340 carbon pricing complaints and inquiries. This forms part of over 2800 complaints and inquiries received since the implementation of the carbon price mechanism on 1?July 2012. Complaint numbers continue to decline since the implementation of the carbon price mechanism. Energy is the largest complaint category, constituting 41% of all contacts received since 1 July 2012. A significant number of contacts have also been received about the refrigerant gas, landfill and construction sectors.The ACCC continues to actively assess carbon pricing complaints as they arise for evidence of conduct that may raise concerns under the Act and a number of in-depth and initial investigations remain ongoing. Enforcement outcomes for the period include five administrative resolutions and five formal warning letters.On the stakeholder front, the ACCC continues to engage with businesses on carbon pricing issues as required, including through sending 25 educative letters and 16 informal warning letters to traders in the period.Consumer guaranteesBuilding on the work of Consumer Affairs Victoria, the ACCC released a free iPhone and Android app for consumers named ‘ACCC Shopper’ in early December 2012 to coincide with the busy Christmas shopping period. The app includes consumer information on warranties, refunds and lay-bys, and allows users to set reminders for their gift vouchers and warranties, and stores photos of receipts. It also includes information about country of origin food labelling and olive oil claims. The app was downloaded more than 5000 times in the first week following its release.Unsolicited sellingThis quarter the ACCC continued to focus on door-to-door sales practices, particularly in relation to the energy market. In November, the ACCC as part of its ‘Knock! Knock! Who’s There?’ campaign, launched translated versions of its consumer brochure to assist potentially disadvantaged and vulnerable consumers from non-English speaking backgrounds to understand their rights. The brochure is available in the following 14?languages: Arabic, Dari, Turkish, Farsi, Dinka, Mandarin, Vietnamese, Cantonese, Greek, Serbian, Korean, Italian, Thai and Khmer.The ACCC continued to distribute its suite of other door-to-door educational material to the public via stakeholders and its Infocentre. To date approximately 70?000 ‘Do Not Knock’ stickers and 16?500 brochures have been distributed.Fuel price boardsFollowing an agreement reached on 6 July 2012 to work towards a consistent national framework on fuel price board signage Ministers responsible for Consumer Affairs released a public consultation paper on a proposed national petrol information standard on 7 December 2012. The aim of the consultation paper is to stimulate discussion on fuel price transparency with a view to increasing competition and enabling consumers to accurately compare fuel prices at different retailers. The public consultation paper proposes three options: No new regulation. Generic consumer protections against false, misleading and deceptive conduct, bait advertising and multiple pricing. Basic national standard. Only undiscounted fuel prices on signs permitted, although fuel discount schemes may be included. Detailed national standard. All fuel retailers must maintain a fuel price board, displaying in equal prominence the undiscounted prices of a specified minimum number of fuels. During the consultation period, a working group of Commonwealth, state and territory officials will meet with key stakeholders, including industry groups, motoring associations and consumer groups. The consultation period closes on 15?February?2013. The consultation will take into account matters such as remoteness and other location-specific issues.ScamsDuring the quarter, the ACCC continued to work with other agencies, and implemented educational initiatives to protect Australians against scam activity. On 22 November 2012 the ACCC hosted a meeting of the Australasian Consumer Fraud Taskforce, which is a governmental working group consisting of 23 agencies working to disrupt scam activity.The ACCC’s SCAMwatch website (.au) continued to provide regular alerts for subscribers.SCAMwatch includes a free subscription service to alert the public to new scams. Seven SCAMwatch radars were issued in the quarter covering:‘Computer cold call virus scam – scammers outsmarted!’ – in October 2012 the ACCC announced that three international regulators successfully closed down and froze the funds of imposters posing as Microsoft employees offering to fix PC viruses.‘With Halloween around the corner, beware of scareware’ – in October 2012 the ACCC advised consumers of the emergence of a new type of scareware where scammers gain control of one’s computer and would seek a ransom in order for the computer to be released.‘Scammers continue to impersonate government officials’ – in October 2012 the ACCC urged the public to remain vigilant against scammers impersonating government officials with false claims of money owed.‘Don’t be horsed around by scammers this spring racing season’ – tying in with the Melbourne Cup, in November 2012 the ACCC warned punters to beware of sports investment scams.‘Watch out for scam surveys and offers misusing household names’ – in November 2012 the ACCC alerted consumers to fake online gift vouchers and other bogus inducements seeking consumers’ valuable personal information.‘Watch out for fake flight itineraries landing in your inbox’ – in December 2012 the ACCC warned travellers about scam emails with fake flight itineraries attached containing malicious software.‘Dont be fooled by scams this festive season’ – in December 2012 the ACCC warned consumers about scams to look out for over Christmas including online shopping scams, fake delivery scams and charity scams.SCAMwatch is also on Twitter. During the quarter December 2012 SCAMwatch attracted 235?362 unique visits and to date has issued 97 tweets, and almost 4?167 followers.Food labellingThe ACCC together with the state and territory consumer protection agencies (ACL Regulators) have been considering a range of consumer protection concerns regarding food labelling practices. This includes concerns about country-of-origin labelling of food and the labelling of olive oils in Australia.To complement compliance and enforcement activities, the ACL Regulators developed guidance material for consumers that explains Australia’s country-of-origin labelling framework as well as a handy buying guide for consumers which provides information about the different grades of olive oil products, how they differ as well as some storage tips. These publications provide important guidance for consumers so they are able to make more informed purchasing decisions. The information was also incorporated into the ACCC Shopper app.The work undertaken by the ACL Regulators on food labelling issues was discussed at the Meeting of Ministers for Consumer Affairs on Friday 7 December 2012. The Ministers welcomed the extensive work undertaken by the Australian consumer agencies in response to concerns raised about a range of food labelling issues. Ministers agreed that the ACL has the necessary investigative and enforcement powers to effectively address food labelling concerns.Product safetyRecallsIn the December 2012 quarter the ACCC received notifications for 116 consumer product safety recalls, all of which were published on the Recalls Australia website (.au). Sixty-six of these recalls were managed by the ACCC, the remaining 50 were managed by other Commonwealth regulators. Of those 66 recalls, 38 recalls were independently initiated by suppliers without intervention by regulators.25 recalls resulted from negotiations initiated by the ACCC and three recalls were negotiated by other ACL regulators.Table 5:?? Recalls Negotiated – 1 October to 31 December 2012Recalls Negotiated by the ACCC25Consumer complaint2Supplier’s mandatory report of consumer injury7Overseas recall intelligence 6ACCC on-line survey of unsafe goods5ACCC compliance survey of regulated goods4Motor vehicle (jointly with Dept. Infrastructure & Transport)1Recalls Negotiated by other ACL regulators3The number of ACCC negotiated recalls during this period is comparable with the number negotiated during the last quarter of 2011 (24 recalls with a combined total of 36 distinct products, representing 44% of recall notifications for the period).A total of 1?132?111 unsafe, faulty consumer goods were recalled as a result of the ACCC’s negotiations during this period. Emerging hazards and product safety recallsDuring the quarter the ACCC: became a member of the University of NSW Research Group examining the safety / stability of Quad Bikes. The Research Group is managing a $1 million project designed to improve the safety, stability and crashworthiness of quad bikes. The ACCC contribution of a number of quad bikes specifically designed for recreational use will ensure that the full range of quad bikes available to Australian consumers are assessed for crash safety and stability. The ACCC is also designing a consumer awareness campaign to ensure that safe use messages and tips are directed at consumer groups to complement the messages and tips being provided to users of quad bikes on farms or in the workplaceSeveral multipurpose ladders tested by the ACCC were found to not comply with the voluntary Australian standard. Recalls were initiated for two ladders. The investigation is ongoing.reviewed 602 mandatory recalls (a report of a product related injury under the Australian Consumer Law) of which, 271 were referred to other regulators. The remaining 331 were assessed or are currently under assessment. One report has been assessed as posing a significant risk and two reports have been assessed as posing a moderate riskreceived 792 reports related to the safety of unregulated products and 46?reports related to the safety of regulated products. These reports have been assessed, or are currently under assessment. The reports that have been assessed include five that have been assessed as posing an extremely high risk, two that have been assessed as posing a very high risk, and eight that have been assessed as posing a high risk:Three of the five ‘extremely high’ cases involved Christmas lights and resulted in ACCC recalls. The other two cases relate to quad bike deaths in Melbourne and New Zealand which have been referred to the national quad bike project.One of the ‘very high’ cases relate to the Bumbo Baby Seats which was already subject to recall. The second relates to an elderly person receiving serious injuries after being hit by a motor vehicle whilst riding a mobility scooter. Five of the eight ‘high’ cases relate to the following:non-compliant cigarette lighters which were recalleda 12-year-old seeking medical attention for swallowing two small magnetsan 18-month-old girl who died from an alleged bowel perforation after swallowing a number of small round magnets which were considered as part of the ‘powerful magnets project’Tinyme Wooden Personalised Name Puzzles, containing small parts, which were recalledsleeveless playsuit, sizes 1 and 2 (K-Mmart) - affected garments do not have a fire danger warning label attached to the collar, which were recalleda further two ‘high’ cases involve Woolworths Homebrand safety matches which resulted in recallthe remaining case relates to a person suffering an anaphylactic shock attributed to paraphenylenediamine (PPD) in the hair dye, who died after spending a year in a coma. The case is now part of the paraphenylenediamine (PPD) in Hair Dyes Project.New standards and bansDuring the quarter:a permanent ban on certain small, high powered magnets came into effect. a minor amendment to the Tobacco (Graphic Health Warning) Labelling information standard came into effect. The amendment more clearly conveys the type of damage smoking can cause to the heart and therefore strengthens the ability of the health warning to achieve its purpose.? The amended graphic is consistent with the health warnings on tobacco products sold in Canada and New Zealand.In relation to standards, work progressed on a possible mandatory standard on corded window coverings as well as a review of the existing standards for baby walkers, cigarette lighters, trampolines, baby dummies, children’s nightwear, household cots, prams and strollers and projectile toys. Outcomes of this work will flow into recommendations for new or revised standards.signed a Memorandum of Understanding with Standards Australia. A key goal is to better align the development of voluntary Australian Standards and mandatory standards. Hazards associated with chemicals in consumer goods The focus of work in this field for this quarter related todimethyl fumarate (DMF) in consumer goods – following reports of DMF in goods in the Australian marketplace, the ACCC worked with industry to survey and test products. DMF was not detected at any significant levels.safety of do-it-yourself teeth whitening products for home use – following the recall of some 28 different products in 2011, the ACCC reviewed the marketplace and tested a number of products to ensure the safe limits for hydrogen peroxide and carbamide peroxide were still being adhered to across the market.An investigation into the potential hazards posed by laundry liquid capsules was undertaken following a number of reports of injury in Australia and overseas. The issue of concern is the confectionary-like look of some products which makes them appealing to children. As a first step the ACCC is working with industry to address issues of concern. Compliance campaignsThis quarter the ACCC’s product safety compliance campaigns focussed on two main areas:Product Testing:The ACCC led a joint product safety survey with state and territory consumer protection agencies, covering toys for children less than three years, toys containing lead and other heavy metals, aquatic toys, projectile toys, bicycles and banned products.The survey program involved surveying products from over 3?300 retailers, including internet based traders Australia wide. More than 94?000 product lines were surveyed and over 11?000 products were removed from sale or seized.The ACCC conducted over 1500 tests for lead and other heavy metals in toys, small parts liberation, projectile toys and bicycles to ensure they met the reasonable use and abuse tests in accordance with Australian mandatory safety standards. Inspections:The ACCC and Consumer Affairs Victoria (CAV) conducted a joint inspection of a newly-opened suburban shop selling non-compliant nursery furniture and baby products imported from China. A wide range of non-compliant nursery furniture products were embargoed and subsequently seized from the trader by CAV. Swift action by ACCC and CAV prevented any non-compliant products being sold to consumers.The ACCC conducted the annual show bag inspection prior to the Hobart and Perth Shows. Over 500 show bags were inspected to identify non-compliant products. Only one unsafe toy was detected and removed in Hobart, however there were a number of cosmetics and sunglasses which required relabelling before both Shows opened and the show bags were sold to consumers.The ACCC attended Ausbikes Expo 2012 to increase pedal bicycle suppliers’ awareness of their regulatory responsibilities and mandatory reporting requirements. Supplier education material was distributed. Suppliers present included overseas manufacturers, importers/distributors and retailers.Promote the economically efficient operation of, use of and investment in monopoly infrastructureEnergyThe Australian Energy Regulator (AER) is Australia’s national energy market regulator and an independent statutory authority. The AER is funded by the Commonwealth, with staff, resources and facilities, provided by the ACCC. This section of the report details the AER’s achievements in the December 2012 quarter.State of the Energy Market reportOn 20 December the Australian Energy Regulator (AER) published its sixth State of the Energy Market report. The report provides an overview of Australia's electricity and gas markets over the preceding 12 months. It supplements the AER's extensive technical and compliance reporting on the energy sector and is intended to meet the needs of a wide audience, including government, industry and the broader community. The 2012 edition aims to explain the factors that have driven up energy prices and the range of policy and regulatory initiatives under way to address the problem. The report also looks at other important developments in the market, including Tasmania and the Australian Capital Territory (ACT) launching national retail reforms in July 2012 (several jurisdictions plan to sign on in 2013). The AER launched an energy price comparison service as part of the reforms (.au).Consultation on the new regulation reform program in 2013On 18 December 2012 the AER announced the consultation strategy on Better Regulation, a program of work that will deliver improved regulation focused on the long term interests of consumers. This follows changes to the National Energy Rules announced by the Australian Energy Market Commission at the end of November 2012.Throughout 2013the AER will work with stakeholders to develop a series of guidelines that will set out a new approach to regulation that includes the assessment of expenditure proposals, calculation of the allowed return on assets and consumer engagement.The final guidelines are expected to be completed by the end of November 2013.Decisions and determinationsGas networks regulation mattersVictorian gas access arrangement review – 2013 – 17 On 9 November 2012 the AER received revised access arrangement proposals from the Victorian Gas distributors. These revised proposals where in response to the AER’s draft decision in September 2012. The four service providers covered by the access arrangements are APA GasNet, which owns the Victorian transmission system, and three distributors, Multinet, SP AusNet and Envestra. Envestra also provides gas distribution services to Albury and its surrounding region in New South Wales. Envestra’s Albury network is part of the AER’s review. In response to the revised proposal, the AER sought submissions by 7 January 2013. The AER expects to make a final decision by March 2013. Electricity network regulation mattersSP AusNet's Victorian Bushfire Royal Commission cost pass-through applicationOn 23 October 2012 the AER released its final determination on SPI Electricity Pty Ltd’s (SP?AusNet) cost pass-through application. The application was for the recovery of costs arising from its implementation of certain Victorian Bushfire Royal Commission recommendations.Under the National Electricity Rules, a distribution network service provider (DNSP) may seek the approval of the AER to pass through to electricity customers higher costs associated with meeting new regulatory obligations. The pass-through provisions allow a network business to recover additional costs during a regulatory control period, where certain conditions are satisfied. Advanced Metering Infrastructure remote servicesOn 31 October 2012 the AER released a draft decision on the proposed charges and terms and conditions for advanced metering infrastructure (AMI) remote services in Victoria.AMI remote services are metering services that were previously provided through a field officer visit, but can now be offered remotely to customers using AMI or smart meter technology. These services include remote special meter reads, remote meter reconfiguration, and remote re-energisation and de-energisations (remote connections and disconnections). These services are provided on a fee-for-service basis where requested by a customer who has a smart meter installed.The AER’s draft decision sets out the AER's assessment of the statements of proposed charges and terms and conditions submitted by Powercor, Jemena, United Energy and CitiPower. Draft decision on ElectraNet's revenue proposalOn 30 November 2012 the AER issued its draft determination on ElectraNet’s revenue proposal for the five year regulatory period from 1?July?2013 to 30?June 2018. ElectraNet is the principal electricity transmission network service provider in South Australia.The AER has not accepted ElectraNet’s forecast revenue of $1725.7 million ($?nominal) for the regulatory period. Instead, the AER has determined a total revenue cap of $1507.3 million ($ nominal) which is 13 per cent lower than ElectraNet's proposal.?The most significant drivers of the differences between ElectraNet’s proposal and the AER’s position are the expenditures required to operate and maintain the network, cost of new assets and the cost of capital required to finance assets.ElectraNet submitted a revised regulatory proposal on 16 January 2013. The AER is seeking submissions from interested parties on the draft decision by 19?February?2013. The AER expects to publish its final determination in April 2013.Draft Murraylink determination On 30 November 2012 the AER released its draft determination on Murraylink for the period 1?July?2013 to 30 June 2023. A pre-determination conference was held on 12 December 2012 in Adelaide to explain the draft decision and receive oral submissions.Submissions in response to the draft decision and the consultants' reports closed on 19?February?2013. 2011 Demand management incentive scheme expenditure for Victorian DNSPsUnder the Demand Management Incentive Scheme (DMIS), at the end of each regulatory year, DNSPs are required to submit a report to the AER on their demand management innovation allowance (DMIA) expenditure. The AER conducts an assessment of the expenditure incurred by the DNSP to ensure compliance with the DMIA criteria and entitlement to recover expenditure.On 26 November 2012 the AER published a final decision following its review of DMIA expenditures in 2011 for Citipower, Jemena, and SP AusNet. Powercor and United Energy did not seek approval of any DMIA expenditures.The DNSPs sought approval of total expenditures of around $550?000 relating to 3?projects. The AER has reviewed and approved the expenditure claimed by the DNSPs as the expenditure is consistent with the DMIA criteria. Victorian electricity network tariffs for 2013On 19 December 2012 the AER approved increases in Victorian electricity network tariffs for the period 1 January 2013 to 31 December 2013 for CitiPower, Powercor, SP?AusNet, Jemena Electricity and United work tariffs recover the costs associated with transporting electricity along the low and high voltage power lines which typically make up between 30-40 per cent of total residential electricity bills in Victoria.The AER is required to assess the Victorian DNSP’s annual pricing proposals to ensure that they comply with the AER’s electricity distribution determination for the current regulatory period (2011-15) which capped increases to network charges.The increase in network charges in 2013 is based on the AER’s 2010 determination, but also includes year-on-year adjustments in charges for use of the transmission network, payments for solar PV feed-in tariffs, the outcomes from the Australian Competition Tribunal‘s review of the AER’s 2010 price determination, which allowed the networks to claim higher allowances for the costs of debt and other items, and a bonus for improved network reliability. In addition, network charges for Powercor and SP?AusNet include the pass through of additional costs for approved bushfire related safety expenditure.The DNSP’s network tariffs for 2013 now also include new time–of-use tariffs, known as flexible tariffs, which will come into force from 1 July 2013. This follows the Victorian Government’s initiative to allow customers who have a smart meter to move to these new tariffs, should they choose do so.Electricity transmission STPISOn 20 December 2012 the AER published its final decision on a new electricity transmission service target performance incentive scheme (STPIS). The STPIS is a scheme designed to provide incentives for each TNSP to maintain or improve outcomes in relation to reliability of transmission network services at times most valued by customers. The scheme also seeks to encourage transmission network owners to develop their networks in a way which facilitates efficient wholesale electricity prices.The AER’s final decision is to amend the scheme to focus more on lead indicators of reliability and change the way performance against the market impact component is measured. The final determination also introduces a new network capability component to incentivise TNSPs to identify and implement low cost solutions to network limitations. The changes introduced in the new version of the STPIS are based on the AER’s findings of its STPIS review.Cost thresholds review for the regulatory investment test for transmission On 20 November 2012 the AER published a final determination following its review of cost thresholds for the regulatory investment test for transmission (RIT-T). The AER’s final determination is that:the $5 million cost thresholds in clause 5.6.5C, in relation to the definition of replacement transmission network asset and in relation to transmission investment as referred to in the definition of new network investment, be maintained at $5?millionthe $35 million cost threshold in clause 5.6.6(y) be increased to $38 million. The revised cost threshold will take effect on 1 January 2013.The RIT-T is a cost-benefit test that transmission companies must apply before building electricity transmission infrastructure. Transmission companies must apply the test in instances where the costs of proposed transmission investments are above certain cost thresholds.Energy wholesale marketsReport on NEM congestionOn 10 December 2012 the AER released a report on NEM congestion and associated disorderly bidding by generators. The report focuses on the response to recent congestion in central Queensland, New South Wales and Victoria by certain generators. The report highlights how disorderly bidding associated with congestion impacts on the efficiency of the market by limiting interregional trade, distorting economic dispatch and creating price volatility. The AER calls for reforms to be made to market processes to reduce the ability of disorderly bidding to affect market outcomes. The AER considers that the report is relevant to the Australian Energy Market Commission’s Transmission Frameworks Review and the Productivity Commission’s inquiry into Energy Network Regulation.Guideline on gas STTM significant price variationsThe AER released reports outlining significant gas price events in July 2012 and August 2012 in gas markets. The reports analyse drivers of higher price gas days in the Victorian wholesale gas market and the Short Term Trading Market (STTM) wholesale gas markets in Sydney, Brisbane, and Adelaide over the period.July 2012 saw the highest ever ex ante price in the Adelaide STTM hub and the highest ever daily price in the Victorian wholesale gas market since November 2008. Both prices replaced June 2012 high price records. Consistently higher prices which began in June continued to occur in all markets over July and lead to a steady incline in the 30 day average price.The average ex ante prices in August 2012 were significantly higher than August 2011. Sydney, Victoria, and Adelaide exceeded the August 2011 average prices by 98, 42, and 60 per cent respectively. These increases were caused in part by reductions in lower priced gas being offered to the market. The AER has identified that demand was under forecast on 25 of the 31?August 2012 gas days in the Sydney market. Under forecasting of demand by participants usually results in higher ex?post prices relative to the ex ante price. On 21 December 2012 the AER published a guideline outlining what will constitute a significant price variation in the gas STTM. The AER will not report on gas market outcomes when there is a significant price variation as defined in the guideline. Under the guideline, the AER will monitor variations between the 2-day-ahead, ex ante and ex post prices, the rolling 30 days average price as well as Market Operator Service payments.The AER expects the significant price variation reports will be of interest to a wide range of parties including existing market participants, participants considering entering the market, policy makers, energy analysts and consumer groups.Energy retail marketsEnforcement action on life support obligationsThe AER took enforcement action over recent incidents in which customers known to require life support equipment have unexpectedly lost energy supply due to errors on the part of their distributor.In recent months, both Aurora and ActewAGL have reported such incidents to the AER. The businesses are now working on programs reviewing and strengthening internal processes to meet their obligations to life support customers. Aurora has also paid penalties totalling $40?000 in relation to conduct the AER considers was in breach of those obligations.The National Energy Retail Law and Rules, which commenced in Tasmania and the ACT on 1?July?2012 establish a framework for the protection of customers with medical life support equipment. These customers are entitled to special protections to ensure continuity of energy supply, and to advance notice and information from their distributor where interruptions to supply are necessary or unavoidable. Energy retailers and distributors need to be able to identify their life support customers, and must ensure that steps are taken to keep them safe.The AER will continue to monitor compliance with these obligations to ensure that these protections are delivered in the best way possible, and will look to businesses in jurisdictions that have yet to move to the national framework to make sure they are prepared to meet these obligations.Retail performance reportingOn 20 December, the AER issued the AER retail energy market update July - September 2012 its first quarterly report on retail performance under the National Energy Retail Law and Rules. The report contains an overview of key market and retail performance indicators for the ACT and Tasmania (being the jurisdictions in which the Retail Law has commenced), including customer switching levels, customers experiencing payment difficulties, hardship, disconnections and reconnections. ERM Power Retail Pty Ltd granted gas retailer authorisationOn?14 December?2012 the AER approved an application from ERM Power Retail Pty Ltd (ERM Power Retail) for gas retailer authorisation under the National Energy Retail Law.?ERM Power?Retail is authorised to retail?gas when the National Energy Retail Law is adopted in each participating jurisdiction.ERM Power Retail is a wholly owned subsidiary of ERM Power Limited (ERM Power). ERM Power Retail is ERM Power’s electricity retail business, which has been operating since 2007, and is therefore authorised to retail electricity in the NEM. It is looking to expand its retail business to include gas.The AER sought public submissions on?ERM Power?Retail’s application for a retailer authorisation however no submissions were received.Telecommunications Decisions and determinationsFinal access determination for the local bitstream access service The ACCC has finalised terms and conditions for access to a wholesale service provided by certain superfast networks. On 5 October 2012 the ACCC made a final access determination (FAD) for the declared local bitstream access service (LBAS). This FAD will apply for three years.The LBAS is a wholesale access service for fixed line networks that are built or upgraded after January 2011. The LBAS regulates access to a designated superfast telecommunications networks, other than the National Broadband Network (NBN). A superfast telecommunications network is a network used to supply a Layer 2 bitstream service where the download transmission data rate is normally 25 Mbps or higher. The FAD contains price and non-price terms and conditions for a 25/5 Mbps LBAS service. A price ceiling is set at $27 per service per month, benchmarked to the NBN Co wholesale broadband agreement (WBA) price for a similar service. The FAD requires LBAS providers to supply a voice service if requested by an access seeker. The FAD also contains non-price terms and conditions of access as a base position if parties cannot come to a commercial agreement. Benchmarking to the NBN Co WBA is appropriate to ensure similar terms and conditions for retail providers of broadband services, whether they acquire NBN-based services or not. This FAD should provide some certainty in terms and conditions for industry participants. National Broadband Network (NBN)Points of interconnection to the NBN published On 5 November 2012 the ACCC published the Listed Points of Interconnection to the NBN. A Point of Interconnection (POI) is the connection point that allows retail and wholesale service providers to connect to the NBN. Under section 151DB of the Act, the ACCC is required to prepare a written list of POIs and publish a list in force on its website. Consultation on new measures relating to “pull through” during migration of services to the NBN The ACCC has released a discussion paper inviting comments on two measures developed by Telstra under its plan for migrating services to the NBN. The measures relate to a specific process that will be used by NBN Co in limited circumstances to connect premises to the NBN. NBN Co may need to use an existing copper or HFC line to pull the NBN fibre through the conduit that leads from the street to the premises. These processes may have important implications for the ability of wholesale customers to minimise disruption to the supply of communication services to consumers. Further information on the measures and migration plan is available on the ACCC website. NBN Co special access undertaking (SAU)The ACCC has begun consultation on NBN Co’s proposed terms and conditions for access to its National Broadband Network. The latest Special Access Undertaking (SAU) was lodged with the ACCC on the 18 December 2012. On the same day, NBN Co withdrew the SAU it lodged on 28 September 2012. The 18 December 2012 SAU includes amended non-price terms and some other amendments which NBN Co states “clarify the operation of the SAU”. If accepted, the revised SAU will form part of the regulatory framework for access to the National Broadband Network.Reports releasedTelstra’s current cost accounting reportIn November 2012 the ACCC published Telstra’s current cost accounting report relating to the accounting separation of Telstra for second half and full year 2011-12. This report provides information in those financial statements in respect of Telstra’s core regulated services. These core services include the following regulated wholesale services provided on Telstra’s public switched telephone network (PSTN):the unconditioned local loop servicePSTN originating and terminating access services andthe local carriage service.The next report will be assessed and published in May 2013.Fuel price monitoringThe ACCC closely follows developments in the petroleum industry and monitors the retail prices of petrol, diesel and automotive liquefied petroleum gas (LPG) in all capital cities and around 180 regional locations.Price movements in the December 2012 quarterPetrolThe ACCC monitors movements in domestic retail petrol prices against movements in international benchmark prices. In the case of regular unleaded petrol (RULP), movements in seven-day rolling average retail RULP prices in the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth) are compared with movements in seven-day rolling average prices for Singapore Mogas 95 Unleaded (lagged by 10?days) in Australian cents per litre (cpl).Chart 1 shows movements in these prices over the period 1 October to 31?December 2012. Retail RULP prices are shown on the left hand side of the chart and Singapore Mogas 95 Unleaded prices are shown on the right hand side. A comparison of movements in these two prices is indicative rather than an exact science and factors other than international benchmark prices can influence retail petrol prices in the short run. This caveat also applies to the comparisons of movements between retail diesel and automotive LPG prices and their respective international benchmarks.Chart 1: Movements in retail RULP prices and internationalbenchmark?prices—1 October to 31 December 2012Note: the cyclical movements in the seven-day rolling average retail price series arise because petrol price cycles in 2012 have been longer than seven days. Traditionally the ACCC has used a seven-day rolling average to smooth out the effects of the petrol price cycle.As illustrated in the chart, both retail RULP prices and Singapore Mogas 95 Unleaded prices decreased in the December 2012 quarter. Seven-day rolling average retail RULP prices in the five largest cities decreased from 143.5?cpl at the beginning of October 2012 to 137.4 cpl at the end of December 2012—an overall decrease of 6.1 cpl during the quarter. The decrease in Singapore Mogas 95 Unleaded prices over the December quarter was influenced by:ongoing pessimism regarding world economic conditions (including the inability of the White House and Congress to agree to a ‘fiscal cliff’ deal before the end of the year)increased supply of oil from the North Seaample supply and weak demand in the Asian region.DieselThe ACCC monitors the movement of retail diesel prices against the price of Singapore Gasoil with 10?parts per million (ppm) sulphur content. Chart 2 shows daily average retail diesel prices on the left hand side of the chart and seven-day rolling average Singapore Gasoil 10 ppm prices (lagged by 11 days) on the right hand side. Daily average retail diesel prices in the five largest cities decreased by 2.6 cpl over the December 2012 quarter—from 151.1 cpl at the beginning of October to 148.5 cpl at the end of September. Singapore Gasoil 10 ppm prices decreased over the quarter due to relatively weak demand in the Asian region.Chart 2: Movements in retail diesel prices and internationalbenchmark?prices—1?October to 31 December 2012Automotive LPGThe ACCC monitors the movement of retail automotive LPG prices against the average of Saudi Aramco contract prices for propane and butane, which are issued on the first day of the month (see Chart 3). Average retail automotive LPG prices in the five largest cities (on a seven-day rolling average basis) increased by 0.9 cpl over the December 2012 quarter—from 74.8 cpl to 75.7?cpl. The prices of the Saudi Aramco contract prices over the quarter were broadly stable. Chart 3: Movements in retail automotive LPG prices and internationalbenchmark?prices—1?October to 31 December 2012ACCC Petrol monitoring report 2012On 6 December 2012 the Australian Competition and Consumer Commission released its 2012 report on the prices, costs and profits of unleaded petrol in Australia. The key findings of the 2012 report include:International prices were the main influences on domestic petrol prices in Australia, reaching record levels during 2011-12. International price of petrol plus taxes account for 88 per cent of the retail price of petrol, while the local wholesale and retail industries account for 12 per cent of the final price.Weak economic conditions in developed countries and slower growth of Asian economies were not enough to offset the effects of Middle East unrest and continued depletion of low-cost conventional crude oil supplies which kept crude oil prices at their highest annual levels ever during 2011-12.The continued strength of the Australian dollar provided some protection from higher international prices. Even with the recent increases, petrol prices in Australia remain among the lowest in the OECD.Profits in the Australian downstream petroleum industry across all products in 2011-12 were $408 million or around 0.5 cents per litre. The profit result for the downstream industry for 2011-12 represents a fall of 81 per cent compared with the previous twelve months.Results in 2011-12 were affected by losses in refining. Australia’s refining sector is vulnerable to overseas competition. Mobil ceased operations at the Port Stanvac refinery in Adelaide in 2003 and formally closed it in 2009. In October 2012 Shell closed its Clyde refinery in Sydney while Caltex has recently announced its decision to close the Kurnell refinery, also in Sydney, in 2014. These refinery closures will bring to five the number of refineries operating in Australia and are evidence of the refining sector adjusting to the challenges of import competition.The retail sector earned an average of 1.5 cpl on all its fuel products. This increased to 2.4 cpl when convenience store sales are included.Price cycles in major metropolitan markets and relatively higher prices in regional centres continue to be the main sources of consumer concern. Petrol price cycles are not responses to changes in cost but are the result of the pricing policies of major fuel retailers. Prices in regional areas generally tend to be higher than in major cities due to lower volume of petrol sold at regional retail sites, higher transport costs and lower levels of competition. Lags between changes in prices in regional locations and capital cities sometimes accentuate the country-capital city differential.Aviation and airportsDecisions and determinationsAirservices Australia price notificationIn November 2012 the ACCC released a discussion paper for the review of quality of service monitoring applying at Brisbane, Melbourne, Perth and Sydney airports. The release of the discussion paper initiates the ACCC’s review of the quality of service monitoring which forms part of the implementation of the Australian Government’s response to recommendations made by the Productivity Commission in its 2011 inquiry into the economic regulation of airport services. The ACCC considers it is timely and appropriate to conduct a comprehensive review of the information currently collected for quality of service monitoring and the extent to which the information adequately supports the objectives of the monitoring program. The ACCC’s review of the quality of service monitoring is a consultative process. Interested parties were invited to make written submissions to the issues raised in the discussion paper by 19?December 2012. On the basis of comments by stakeholders on the discussion paper, the ACCC will issue a draft Airport quality of service monitoring guideline for consultation. Interested parties will be again invited to make written submissions to the draft guideline when they are released in early 2013.The Australian Government has directed the ACCC to monitor the supply of aeronautical and car parking services at Australia’s major airports. The quality of service monitoring program along with the price monitoring and financial reporting arrangements form part of the monitoring program administered by the ACCC, which apply at Brisbane, Melbourne, Perth and Sydney airports. Rail accessDecisions and determinationsHunter Valley Access UndertakingThe ACCC released its Decision on the variation application submitted by ARTC to establish the efficient train configuration for the Hunter Valley coal chain and the associated access charges on 17 October 2012. The accepted arrangements include applying revised access charges to the two new, more efficient train services identified by ARTC in consultation with the Hunter Valley Coal Chain Coordinator. These more efficient train services are the longest trains which can currently operate on the network. The revised access charges promote more efficient use of the network by coal chain participants.The HVAU requires ARTC to submit documentation for the purposes of an annual compliance assessment to be conducted by the ACCC. On 1 June 2012 ARTC submitted its annual compliance documentation for the 6 month period from 1 July to 31 December 2011, The ACCC continues to assess ARTC’s compliance, which is expected to be finalised shortly.ARTC submitted a variation application to the ACCC on 3 August 2012 to include a positive performance incentive mechanism into the HVAU. This application is the first of two potential variations that are envisaged under the HVAU that relate to the development and inclusion of a positive performance incentive mechanism. The ACCC conducted a consultation process in relation to ARTC’s application. In light of submissions received, ARTC withdrew its application on 24 December 2012 and has indicated it will resubmit a positive performance incentive mechanism in 2013.Interstate Rail Network Access UndertakingThe ACCC is currently assessing a variation application submitted by ARTC on 4?September 2012 to include the Southern Sydney Freight Line (SSFL) and associated access charges into the IAU. The SSFL is a tripartite agreement between the Commonwealth Government, New South Wales Government and ARTC to alleviate the major bottleneck in the rail freight network in Sydney. On 18 September 2012 the ACCC released a Consultation Paper seeking industry comment on the variation. The ACCC is currently considering submissions received.Bulk wheat export-access to port terminal servicesDuring 2011 the ACCC accepted undertakings under Part IIIA of the CCA regulating access to services for the export of bulk wheat at port terminals operated by GrainCorp at seven port terminals on the East Coast, Australian Bulk Alliance (ABA) at the Port of Melbourne, Viterra at six ports in South Australia and Cooperative Bulk Handling (CBH) at four ports in Western Australia. The access undertakings provide for: obligations on port operators not to discriminate or hinder access in the provision of port services clear and transparent port loading protocols for managing demand for port terminal services obligations on port operators to negotiate in good faith with eligible wheat exporters for access to port terminal services the ability of wheat exporters to seek mediation or arbitration on terms of access in the event of a dispute. The ACCC has a role in access arrangements for wheat exporters as part of the deregulation of the wheat industry. Access undertakings are intended to ensure that third party exporters are able to access the port terminals operated by vertically integrated port terminal operators, ensuring competition in this significant export market. Since accepting the undertakings in 2011, the ACCC has been monitoring each of the port operators to ensure compliance with the respective undertakings. This includes examining the access agreements between port terminal operators and the associated accredited wheat exporters to ensure that access arrangements to port terminal services do not discriminate and monitoring the reporting outputs of each of the port terminal operators.On 30 November 2012 the ACCC decided not to object to GrainCorp’s proposal to offer long-term agreements (LTAs) to users of its bulk grain export facilities on the east coast of Australia. The proposal allows GrainCorp to allocate up to 60% of its port capacity through LTAs to exporters who are willing to commit to minimum export volumes over a three-year period. At least 40% of capacity per port, per month will remain available to all exporters on an annual basis. GrainCorp’s revised Port Terminal Service Protocols incorporating LTAs came into effect on 27 December 2012 and GrainCorp intends to invite nominations for long-term capacity in February 2013. On 3 December 2012 the Wheat Export Marketing Amendment Act 2012 (the Amending Act) received Royal Assent. The effect of the Amending Act is to inter alia: abolish the Wheat Export Accreditation Scheme (10 December 2012); wind up Wheat Exports Australia (31?December 2012); and provide for the conditional removal of the access test requirements for port terminal operators on 30 September 2014. The amended WEMA provides that in order for the access test to be removed, the Minister for Agriculture, Fisheries and Forestry must approve an industry code of conduct governing port access before 1 October 2014. Once approved by the Minister the code of conduct must then be declared as a mandatory code under the CCA. A Code Development Advisory Committee has been formed to provide industry views on the development of the code to the Minister and the Department of Agriculture, Fisheries and Forestry as well as Treasury who is responsible for competition policy. The committee is chaired and administered by Grain Trade Australia and includes representatives of port terminal operators who will be covered by the code, the Australian Grain Exporters Association, Grain Producers Australia and the National Farmers Federation. As the code will be prescribed and enforced under the CCA, the ACCC will be providing advice on the proposed code. In addition to the above changes, the Amending Act also modifies the current access test by requiring port terminal operators to include in access undertakings from 10 December 2012 an obligation to comply with Continuous Disclosure Rules (CDRs) as prescribed in WEMA. In anticipation of this amendment, on 26 November 2012 CBH applied to vary its 2011 Undertaking to include an obligation to comply with the CDRs. The ACCC consented to the variation on 5?December 2012. Undertakings accepted from Viterra, ABA and GrainCorp already included an obligation to comply with CDRsWaterfront and shippingACCC 2011 – 12 Container Stevedoring Monitoring ReportOn 1 November 2012 the ACCC released its Container Stevedoring Monitoring Report for 2011–12. The ACCC’s container stevedoring monitoring program is undertaken under a direction from the Federal Treasurer pursuant to Part VIIA of the Competition and Consumer Act (2010). The ACCC is required to monitor prices, costs and profits of container terminal operator companies at the ports of Adelaide, Brisbane, Burnie, Fremantle, Melbourne and Sydney. Container stevedoring involves lifting containers on and off ships. In fulfilling its monitoring responsibility, the ACCC?produces and publishes annual container stevedoring monitoring reports.This was the 14th annual report released by the ACCC. The report highlights some of the positive developments in the stevedoring industry since reforms to Australia's waterfront in 1998. Since that time, container volumes have more than doubled, while real costs of providing stevedoring services have decreased by 45 per cent. Much of this cost saving has been passed on to service users, with unit revenues (a proxy for stevedoring prices) falling by 38 per cent since 1998.However, the report also identifies some challenges in moving towards a more competitive and productive industry. For example, industrial disputes, including strike action and reported 'go-slow' strategies, disrupted stevedoring performance in 2011-12. The report notes that if this sort of disruption were to continue, it could undermine expected future gains from greater capacity and competition. The entry of a third stevedore and plans for capacity expansion are welcome developments in the Australian stevedoring industry. They are expected to result in greater competition and improvements in productivity in the future. However, the report also notes that new entry and greater capacity will likely increase the complexity of land-side arrangements at ports. Planning and action from stevedores, ports, governments and other operators will therefore be required. WaterState Water price approval/determination pre-application consultation The ACCC has commenced public consultation with State Water Corporation’s customers and other stakeholders by providing information on the process for the ACCC’s review and approval or determination of State Water’s regulated charges that will apply from 1 July 2014. This will be the first time that State Water will be regulated by the ACCC under the Water Charge (Infrastructure) Rules 2010. The ACCC has held public information sessions in Moree, Dubbo and Lithgow and will be holding further sessions in the Goondiwindi, Tamworth/Narrabri, Deniliquin, Condobolin and Griffith areas in the coming months. In addition to providing relevant information regarding the upcoming process the sessions have been beneficial to ACCC staff as attendees have provided advice on the issues of particular interest to their local areas. Increase our engagement with the broad range of groups affected by what we doOutcomes from International forUMS and conferencesInternational partnerships and collaborationThe ACCC continued to engage closely with competition and consumer protection counterparts around the world. The need for international cooperation has grown as trading across jurisdictional borders has become more frequent and consumers have become exposed to more complex transactions occurring across multiple jurisdictions.This quarter, the ACCC participated in a number of events hosted by the two pre-eminent regulatory networks: the International Competition Network’s Cartel Workshop and Merger Workshop; and the International Consumer Protection Enforcement Network’s Annual Conference and Consumer Protection Best Practice Workshop. The ICN Cartel Workshop’s theme was enhancing global cartel enforcement by building on solid foundations. Members provided input and assistance in the review of the ICN Anti Cartel Enforcement Manual.The Merger Workshop explored international approaches to merger regulation and world best practice, including building international networks and assisting in the continued functions of the ICN Merger Working Group (MWG).The ICPEN workshop and conference focused on future work priorities, enforcement techniques and improving international cooperation. Consumer protection in the online environment continues to be a priority for ICPEN members.As the current chair of the Organisation for Economic Co-operation and Development (OECD) Product Safety Working Party, the ACCC is focusing on improving information sharing across national borders. The ACCC also participates in the International Consumer Product Health and Safety Organization (ICPHSO) forum for the exchange of ideas and information on health and safety issues related to consumer products manufactured and marketed in the global marketplace. The ACCC progressed work through the OECD on the development of a global recalls database, with the pilot database being launched on 19 October 2012 during the International Product Safety Week 2012.The ACCC regularly engages and exchanges information with other regulators internationally in respect of investigations and merger assessments. This quarter, the ACCC:received and responded to 13 requests for information from agencies in Canada, New Zealand, Vietnam, UK and the USmade five requests for information to agencies in Japan, New Zealand, UK and the US.Recognising the value of effective competition and consumer protection regulation and regional cooperation, the ACCC continues to commit efforts to relationship and capacity building in the Asia-Pacific region, and beyond. During the December quarter this support included:participation at the OECD-Korea Policy Centre training seminarparticipation at the ASEAN Experts Group on Competition Capacity Building Workshophosting delegations from Indonesia, Kenya, Malaysia, South Korea and Thailand.International cooperation The ACCC participated in International Product Safety week, 15-19 October 2012. It facilitated the development of and attended the launch of a global recalls portal, GlobalRecalls on 19 October 2012. This portal is an initiative of an OECD working party, chaired by the ACCC and is designed to help consumers, business and government to keep up to date with product recalls in different countries. Australia, the United States, Canada and the European Union are current contributors to GlobalRecalls. The ACCC also conducted an awareness campaign aligned to International Product Safety Week, highlighting the potential product safety risks when they buy online.The ACCC chaired the 5th Session of the OECD Working Party on Product Safety. Other projects include improving information sharing between regulators through the use of an internet portal; investigation of the development of an injury data base; and facilitating improved understanding and alignment of risk assessment processes.The ACCC is also working with the United States, Canada, and Europe to align international safety requirements for targeted products. In the first instance, the project is focused on infant slings, chair-top booster seats and corded internal window coverings. The working paper on corded internal window coverings has been completed and papers for the other targeted products are well advanced.In November 2012 ACCC Deputy CEO Mark Pearson attended an international meeting of economic regulators. The purpose of the meeting was to explore the possibility of establishing an OECD Network of Economic Regulators from multiple sectors and jurisdictions. A draft paper on principles for the governance of regulators was also discussed and participants were briefed on current regulatory initiatives in various countries (including Australia) and related OECD work.Consumer engagementConsumer Consultative CommitteeThe Consumer Consultative Committee (CCC) meets three times a year to discuss issues affecting consumers and to provide tangible outcomes for consumers through work undertaken in combination with CCC members and the ACCC. Members of the CCC include representatives from CHOICE, Financial Counselling Australia, the Indigenous Consumer Assistance Network; the Council on the Ageing; the Consumer Law Action Centre, and others.On 4 December the ACCC held its final CCC meeting for 2012. The meeting included presentations on the ACCC’s activities and use of powers under Australian Consumer Law. Members also discussed the initial planning for the 2013 Consumer Congress and Ruby Hutchison Memorial Lecture. In 2013 the ACCC will conduct its biannual review of CCC membership.Consumer protection issues in Indigenous communitiesOn 24 October and 6 December the ACCC participated in a meeting of the National Indigenous Consumer Strategy Reference Group to coordinate various activities directed at the interests of Indigenous consumers.Product safety awareness raisingThe Product Safety Australia website received 300?000 visits in the December 2012 quarter. The Safe Santa campaign including a ‘Safe Santa Checklist’ was launched on 22?November 2012. This resulted in significant increase in Facebook followers (over 400% increase since campaign launch). The Safe Santa Checklist available at .au/safesanta.The Grim Keeper Goal Post Safety Campaign continued with the distribution of information alerting users of movable soccer goals to their hazards.An Android app for the Recalls website was developed and launched in the December 2012 quarter. This complements the Recalls iPhone App. A mobile recalls site was also released during the quarter. Social media highlights include:the number of ‘Likes’ on our Facebook page increased by 211% for the month of Novemberthe number of new followers on Twitter for the month of November increased by 33%the Keeping Baby Safe app was downloaded approximately 5200 timesthe Recalls app was named App of the Week on Channel 7’s breakfast show, ‘Sunrise’Business engagementInfrastructure Consultative Committee The Infrastructure Consultative Committee (ICC) meets twice a year to discuss the broad issues of infrastructure regulation. Its members are representative of a variety of infrastructure sectors including energy, telecommunications, water, rail, port and airports.The ICC met in Melbourne in December 2012. The focus of the meeting was on increasing customer involvement in the regulatory process. Recent critical issues for the ACCC/AER and other members were also discussed.Franchising Consultative Committee In October 2012 the ACCC held a meeting of its Franchising Consultative Committee which is made up of franchisors, franchisees, lawyers and academics. Members discussed the roles of the new state small business commissioners, exclusive dealing notifications lodged by franchisors and recent franchising related carbon price matters.Small Business Consultative CommitteeThe Small Business Consultative Committee met on 12 October 2012. The meeting included a presentation about new ACCC guidance on unconscionable conduct, and provided members with an update regarding carbon pricing and enforcement matters. The ACCC’s revised Small Business and the CCA (formally Small Business and the TPA) guidance was also launched. Members also discussed issues of interest in their various sectors. Energy Marketing ForumOn 30 November the ACCC participated in the Energy Marketing Forum to discuss strategies relating to energy marketing and identify potentially emerging or systemic issues.Utility Regulators’ ForumThe Utility Regulators Forum (URF) was established to encourage co-operation between Commonwealth, state and territory based regulators. The ACCC provides the secretariat for the URF as well as producing and editing its quarterly newsletter, Network.The URF met in Brisbane on November 2012 to discuss a range of regulatory issues including major and proposed changes in energy regulation and the implications of the recent High Court decision on Part IIIA of the Competition and Consumer Act.Market researchThe ACCC concluded market research in the October to December quarter, highlighting the ways small businesses want to engage with and receive information and updates from the ACCC.AppendicesMajor speechesDuring the December quarter the ACCC delivered 22 addresses including:ACCC report7 October 2012Dr Michael Schaper, Deputy ChairFranchising Council of Australia Legal Symposium, CanberraCompetition and consumer issues: State of play in the food and grocery sector11 October 2012Mr Rod Sims, ChairmanAustralian Food and Grocery Council Industry Leaders Forum, Canberra Addressing the key drivers of electricity price increases24 October 2012Mr Rod Sims, ChairmanEnergy Users Association of Australia, Annual Conference Ports – what measure of regulation?25 October 2012Mr Joe Dimasi, CommissionerPorts Australia Conference, Adelaide Complaints and inquiriesDuring the December 2012 quarter the ACCC responded to 55 791?complaints and inquiries from businesses and consumers (email 31 896, telephone?23 423 and letter correspondence 472). Of these, 56 069 complaints and inquiries were entered into the ACCC’s database with 447 matters flagged for enforcement assessment. Complaints and inquires not entered into the ACCC’s database were determined to raise issues that fell outside of the ACCC’s role and responsibilities.Table 6:?? ACCC complaints, investigations and litigation funnelCategoryDec 2012 quarterContacts received (phone, email and letters)55 791Contacts recorded in the database50 959Under assessments commenced447Initial investigations commenced136In-depth investigations commenced30Litigation commenced4Table 7:?? Geographic location of inquirers and complainants recorded in the national databaseStateACLScams (ACL + Scams)Anti-competitive PracticesIndustry CodesOtherTotalNSW4 1427 41511 557166361 69513 454Vic.4 0215 5669 587164201 59311 364QLD3 3306 5469 876135251 11811 154WA1 4102 4213 83155145904 490SA1 1542 3233 47753144574 001ACT 9441 7122 6562633733 058Tas.2807861 066851161 195NT15230045210056518Overseas1373 7003 83741893 931Not Supplied1785923723274336Note: single contacts may involve multiple issuesTable 8:?? Complaints and inquiries – top ten by industryIndustryContactsNon-store retailing (predominantly online sales)1 292Wired telecommunications network operation667On selling electricity and electricity market operation630Misc. store-based retailing468Car retailing450Finance and investment services443Department stores380Air transport355Advertising services324Misc. electrical and electronic goods retailing315Note: single contacts may involve multiple industriesTable 9:?? Top 10 scam categories reported to the ACCCScam categoryContactsAdvanced fee /up-front payment8 719Lottery and sweepstakes4 541Phishing and identity theft (incl. banking & online account)4 524Computer hacking (incl. malware and viruses)3 437Online auction and shopping2 540Unexpected prizes1 649False billing1 007Job and employment924Dating and romance (including adult services)846Mobile phone (ringtones, competitions and missed calls)536Table 10:?? Top possible contraventions of the Competition and Consumer Act (excluding scams)Predominately fair trading and consumer protection including Australian Consumer LawContactsMisleading or deceptive conduct 4 064Guarantee as to acceptable quality3 021Wrongly accepting payment1 215Guarantee as to due care and skill753Guarantee relating to the supply of goods by description, sample or demonstration376General product safety inquiry/complaint - unregulated product375Guarantee as to fitness for any disclosed purpose etc.367False representation price289Guarantees as to fitness for a particular purpose etc.251Guarantee as to reasonable time for supply205False representations goods - standard, quality, value, grade, composition, style etc.202Predominately effective competition and informed markets part IV and IVBContactsExclusive dealing125Contravention of industry codes120Misuse of market power118ENFORCEMENT OUTCOMES & matters IN COURTLitigation CommencedCompetitionCartelsYazaki Corporation & Australian Arrow Pty Ltdcommenced|13 December 2012jurisdiction|Federal Court Adelaide Consumer ProtectionCredence claimsDuluxGroup (Australia) Pty Ltdcommenced|5 December 2012jurisdiction|Federal Court PerthConsumer GuaranteesHewlett-Packard Australia Pty Ltdcommenced|16 October 2012jurisdiction|Federal Court SydneyConsumer GuaranteesLaunceston Superstore Pty Ltd & Ors (trading as Harvey Norman)commenced|19 November 2012jurisdiction|Federal Court SydneyOngoingCompetitionAir New Zealand Ltdcommenced|12 May 2010jurisdiction|Federal Court SydneyCartelsCredence claimsANZ Banking Corporation Ltdcommenced|25 July 2007jurisdiction|Federal Court BrisbaneConsumer guaranteesCement Australiacommenced|12 September 2008jurisdiction|Federal Court BrisbaneConsumer guaranteesFlight Centre Ltdcommenced|9 March 2012jurisdiction|Federal Court BrisbaneCartelsP. T. Garuda Indonesia Ltdcommenced|2 September 2009jurisdiction|Federal Court SydneyCartelsPrysmian Cavi e Sistemicommenced|23 September 2009jurisdiction|Federal Court AdelaideCartelsRenegade Gas Pty Ltd, Speed-E-Gas Ltd & Orscommenced|23 August 2012jurisdiction|Federal Court SydneyConsumer ProtectionSmall Business ScamAdepto Publication Pty Ltdcommenced|30 September 2010jurisdiction|Federal Court SydneyUnfair contract termsAdvanced Medical Institute Pty Ltd & Orscommenced|21 December 2010jurisdiction|Federal Court MelbourneDoor-to-door salesAGL Sales Pty Ltd & Orscommenced|26 March 2012jurisdiction|Federal Court MelbourneSmall business scamArtorios Ink Pty Ltdcommenced|10 September 2012jurisdiction|Federal Court MelbourneUnfair contract termBajv Pty Ltd t/as Europcarcommenced|10 November 2011jurisdiction|Federal Court HobartVulnerable and disadvantaged personBreast Check Pty Ltdcommenced|21 December 2011jurisdiction|Federal Court PerthProduct safetyDateline Imports Pty Ltdcommenced|25 June 2012jurisdiction|Federal Court BrisbaneVulnerable and disadvantaged personExcite Mobile Pty Ltdcommenced|7 December 2011jurisdiction|Federal Court AdelaideCredence claimKing Island Meatworks & Cellars Pty Ltd & Orscommenced|18 August 2011jurisdiction|Federal Court MelbourneVulnerable and disadvantaged personLux Distributors Pty Ltdcommenced|10 May 2012jurisdiction|Federal Court MelbourneVulnerable and disadvantaged personSafe Breast Imaging Pty Ltd & Anorcommenced|21 December 2011jurisdiction|Federal Court PerthSmall business scamSafety Compliance Pty Ltd & Orscommenced|16 April 2012jurisdiction|Federal Court SydneyVulnerable and disadvantaged personSensaslim Australiacommenced|16 June 2011jurisdiction|Federal Court SydneyPyramid sellingLeslie Forsyth Stottcommenced|19 July 2012jurisdiction|Federal Court MelbourneMisleading conductThe Jewellery Group (trading as Zamels)commenced|5 April 2011jurisdiction|Federal Court AdelaideCredence claimsTuri Foods Pty Ltd & Orscommenced|5 September 2011jurisdiction|Federal Court MelbourneContinues following settlement with some of the partiesAlleged contemptPeter Forstercommenced|11 November 2011jurisdiction|Federal Court SydneyOnline advertisingGoogle Inc (appeal)commenced|22 June 2012jurisdiction|High Court of Australia TelecommunicationsTPG Internet Pty Ltd (appeal)commenced|21 June 2012jurisdiction|Federal Court MelbourneConcludedCompetitionCathay Pacific Airways Ltdcommenced|30 April 2009concluded|6 December 2012jurisdiction|Federal Court Sydneyoutcome|$23 million in penalties forengaging in cartel conduct. CartelCartelEmiratescommenced|18 August 2009concluded|11 October 2012jurisdiction|Federal Court Sydneyoutcome|$10 million in penalties for engaging in cartel conduct.CartelSingapore Airlines Cargo Pty Ltdcommenced|22 December 2008concluded|6 December 2012jurisdiction|Federal Court Sydneyoutcome|$11.75 million in penalties for engaging in cartel conduct.CartelThai Airways International PCLcommenced|28 October 2009concluded|14 December 2012jurisdiction|Federal Court Sydneyoutcome|$7.5 million in penalties for engaging in cartel conduct.Online tradingAir Asia Berhadcommenced|19 January 2012concluded|14 December 2012jurisdiction|Federal Court Melbourneoutcome|$200,000 in penalties for contravening single pricing provisions. Consumer ProtectionCotton On Kids Pty Ltd and Cotton On Clothing Pty Ltdcommenced|5 October 2011concluded|18 December 2012jurisdiction|Federal Court Melbourneoutcome|$1 million in relation to the supply of unsafe children’s nightdresses and pyjamasProduct safetyCredence claimsPepe’s Ducks Ltdcommenced|9 July 2012concluded|18 December 2012jurisdiction|Federal Court Melbourneoutcome|$375,000 plus costs for false, misleading or deceptive conduct in relation to its advertising of ‘open range’ duck products.Credence claimsUNJ Millenium Pty Ltd & Anorcommenced|1 June 2012concluded|3 October 2012jurisdiction|Federal Court Brisbaneoutcome|$55,000 for false misleading or deceptive conduct in relation to its advertising of wool and sheepskin products.Undertakings accepted and Infringement Notices PaidCompetition and Consumer Act“To promote vigorous lawful competition and informed markets”s87B Undertaking DatedOffered by30 October 2012Chemical Formulators Pty Ltd22 November 2012Nestle Australia Ltd – merger22 November 2012Pfizer Australia Pty Ltd – merger 18 December 2012Oticon Australia Pty Ltdaustralian consumer law“To encourage fair trading, protection of consumers and product safety”s87B Undertaking DatedOffered by15 October 2012CNT Corp Pty Ltd28 November 2012Nissan Motor Co (Australia) Pty Ltd7 December 2012Angela Jane DelgiaccoInfringement NoticesDate PaidTraderAmount11 October 2012CNT Corp Pty Ltd3 notices totalling $19,80022 November 2012Nissan Motor Co (Australia) Pty Ltd3 notices totalling $19,800 ................
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