An economy-wide prohibition on unfair trade practices is a vital addition to Australia's consumer laws. There are a range of practices that cause consumer harm, and are detrimental to the competitive process, that are not currently unlawful. These practices have become more prevalent with the widespread uptake of online commerce, while also existing in the offline world.
The Consumer Policy Research Centre (CPRC), CHOICE and a range of other consumer groups have written a policy submission to the Treasury in response to the Consultation Regulatory Impact Statement, Protecting consumers from unfair trade practices.
The traditional approach to consumer protection, focusing on preventing misleading, deceptive or unconscionable conduct and outlawing only the worst forms of exploitation, falls short of addressing the complex psychological biases that influence consumer decision-making. Market factors such as information overload, complex product choices, and limited competition can also undermine or impede consumer autonomy. Organisations can exploit these biases and factors, often in nuanced ways, resulting in consumer manipulation and distrust.
Furthermore, most Australians believe that unfair practices are unlawful, demonstrating the law is out of step with community expectations. Harms can result not only from sales and marketing, but also from product design and pricing, and after-sales conduct (such as making it difficult to access customer service, a remedy or repairs). Moreover, distrust can lead to consumer disengagement, ultimately affecting marketing effectiveness and healthy competition.
This submission argues that a new economy-wide prohibition, reflected in both the Australian Consumer Law and the Australian Securities and Investments Act, is required. Enforcing a provision against unfair trade practices would ensure more equitable economic transactions, and would foster a healthier marketplace, particularly benefiting vulnerable individuals unable to protect their own interests.
Download submission (PDF)
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