Maximum penalties for civil contraventions of the Competition and Consumer Act (2010) (CCA) are set to significantly increase in the coming weeks now that the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 (the Bill) has been passed by both Houses of Parliament without amendments.
This Bill will increase the maximum penalties available under the CCA for civil contraventions and make unfair contract terms illegal.
Maximum penalty increases will be effective almost immediately
These new maximum penalties will come into play one day after receiving Royal Assent, which usually occurs 7-10 days after a Bill has passed through Parliament. To recap, the maximum penalties will increase as follows:
| Current maximum penalties | New maximum penalties | |
|---|---|---|
| Companies, the greater of: | $10 million | $50 million |
| 3x the value of the benefit obtained, if that can be determined | 3x the value of the benefit obtained, if that can be determined | |
| if the value of the benefit cannot be determined, 10% of annual turnover in the 12 months prior to the breach | if the value of the benefit cannot be determined, 30% of adjusted turnover during the breach turnover period (i.e., over the period the breach occurred, with a minimum of 12 months) | |
| Individuals | $500,000 | $2,500,000 |
Unfair contracts will be illegal in 12 months
The Bill will also introduce a prohibition on unfair contract terms which, until now, have not attracted penalties and have merely been declared void if a Court has deemed the term unfair. Changes to the unfair contract terms regime will come into effect 12 months after Royal Assent is received, allowing businesses time to review and amend their small business and consumer contracts. Once the change becomes effective, businesses are liable for up to the maximum civil penalties (as increased by the amendments in this Bill) for including an ‘unfair’ term in a standard form consumer or small business contract.