One consumer law, multiple regulators — how well does it work?

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The Productivity Commission has kicked off an inquiry into the effectiveness of having two federal agencies as well as state and territory regulators enforcing the single nationwide Australian Consumer Law.

Choice and competition are key themes that run through most of the PC’s work; they are central to both the celebrated National Disability Insurance Scheme and the commission’s yet to be enacted recommendations for aged care reform.

It is often the PC which reminds governments that the theoretical benefits of competitive markets do not happen without effective consumer law protections helping the public to exercise informed choice. And that means effective regulators.

The nationwide ACL is widely seen as a definite improvement on the various schemes it replaced in 2011, based on the PC’s recommendations, but there is always room for adjustment and improvement. A review by Consumer Affairs Australia and New Zealand that was built into the legislation is currently underway, due to deliver reform options via an interim report very soon, with final recommendations by March next year.

At the same time, the PC has been tasked with a parallel inquiry into how well the multiple-regulator system is working from an administrative point of view.

The PC is seeking information on the complementary roles of the various regulators and the ways they currently co-ordinate and collaborate to work towards a consistent approach, according to the issues paper that heralds the commission’s call for submissions.

With the CAANZ review running at the same time, the PC’s parallel inquiry is narrowly focused on the administration and practical enforcement of the ACL and its related product safety provisions, not the broader reform discussion.

At the federal level this concerns certain functions of the Australian Competition and Consumer Commission and Australian Securities and Investments Commission, while each state and territory has its own fair trading regulator. All work together through a framework created by a memorandum of understanding.

The level of co-operation this has engendered, according to the issues paper, is unprecedented and there are, again, clear indications that the system is an improvement on what came before.

But concrete evidence to evaluate the co-operative national framework objectively is scant, and the PC notes one research report complained of “inconsistencies, lacuna and unhelpful approaches that riddle the reporting of enforcement work” regarding the ACL.

So, how well does it work? Has the new system actually plugged the gaps, fixed the overlaps and reduced the inconsistencies in consumer law, as intended? What alternatives are there? And, importantly, what evidence is there?

Along with these key questions, there is an opportunity to engage in the never-ending debate about agency resourcing. Along with the usual challenge of deciding if there is enough funding for a particular public service function, this case features the issue of differences in funding levels between the equivalent ACL regulators in each jurisdiction. The issues paper also asks:

“To what extent, if any, does the potential for the ACCC or ASIC to undertake enforcement actions affect the resources the states and territories devote to ACL enforcement?”

The PC inquiry will also consider how the regulators enforce the ACL and whether the tools they have to use are suited to the job, and the mechanisms for dividing up responsibilities between the various regulators, such as in financial services where ASIC has a specialist role.

Information sharing between the regulators is another key issue for the inquiry, which will look at the effectiveness of existing measures, including the Australian Consumer Law Intelligence Network Knowledge system, and whether there is a need for a full national database of consumer complaints like one that exists in the United States.

When it comes to product safety, the ACL regulators have to interact with another larger group of specialist regulators, operating under a range of specific legislation.

The PC is also calling for submissions on issues that arise in this increasingly crowded space where “products are increasingly being sold with a bundle of features and related services that mean their supplier potentially needs to comply with multiple fields of regulation and multiple regulators”:

“For example, a manufacturer or supplier of an Internet-enabled fridge sold on finance or with an energy plan might need to deal with the regulations of the Australian Communication and Media Authority, a specialist regulator, a state or territory ACL regulator and/or the ACCC and ASIC.”

Adding to the complexity when it comes to safety is the fact that at state and territory level, the regulators have varying responsibilities alongside their general ACL enforcement roles. Then there are differences between jurisdictions in the other product safety laws that are not national like the ACL.

Submissions will be accepted until August 30 via the PC website. A draft report is due in November and the final report will be published in March 2017, to coincide with the CAANZ review of the ACL.