Businesses could be banned from increasing prices in the middle of a transaction, or forcing customers to hand over unnecessary personal details, as the federal government pursues a ban on unfair trading practices.
On Wednesday, Prime Minister Anthony Albanese, Treasurer Jim Chalmers, and Minister for Financial Services Stephen Jones unveiled Labor’s plan to stamp out what it calls “dodgy” business tactics.
The plan is designed to eradicate annoying, needless, and potentially harmful practices that are not already forbidden by Australian Consumer Law and other legislation.
“Most businesses do the right thing by Australians and they’ve got nothing to worry about,” Chalmers said in a joint statement.
“This is all about cracking down on dodgy deals to save Australians money if we can, and where we can.”
Practices on the chopping block include:
Notably, the federal government also plans to crack down on dynamic pricing — whereby businesses can adjust the cost of limited resources, like concert tickets, in real-time.
Although dynamic pricing is well-established in the rideshare sector, it shot to prominence in September when dynamically priced tickets for punk band Green Day’s upcoming Australian tour hit as much as $500.
Speaking generally, Competition Minister Andrew Leigh claims such practices push the boundaries of traditional ticket sales.
“You’re effectively finding yourself in an auction scenario rather than a fixed price purchase,” he told 2CC Radio on Tuesday.
“If companies are saying that they’re auctioning tickets then that’s one thing. But if they’re saying we’re selling tickets at a fixed price and then they start changing those prices, then that could well be misleading consumers.”
The planned reforms will empower the Australian Competition and Consumer Commission, along with state and territory consumer watchdogs, to challenge businesses utilising those tactics.
Treasury will open a consultation over the measures, with the government expecting to table its final reform framework in 2025.
Separately, the government announced a consultation on its plan to bolster Consumer Guarantees and Supplier Indemnification provisions under the Australian Consumer Law.
The proposal could have significant implications for small businesses.
On one hand, small businesses making purchases under $100,000 are entitled to the same product guarantees as regular consumers, making many small businesses the beneficiary of upgraded protections.
The consultation also asks if supplier indemnity standards are up to scratch.
If a supplier unknowingly sells a faulty product from a third-party manufacturer and refunds a consumer because of it, the manufacturer is required to refund the supplier for those costs.
The consultation paper notes “the difficulty and uncertainty faced by suppliers in securing reimbursement from the manufacturer could contribute to consumers not receiving the remedies they are entitled to”.
The consultation on consumer guarantees and supplier indemnification is open to submissions until November 14.
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on LinkedIn.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
Comments