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ANGE:

From Schwartz Media. I’m Ange McCormack. This is 7am.

When companies take advantage of consumers by misleading them, selling faulty products, or breaking promises – there’s a body that steps in: The ACCC. Its Chair, Gina Cass-Gottlieb, is responsible for launching cases against some of Australia’s biggest corporations. The latest, against Qantas, is seeking an all-time record penalty from the airline.

Today, senior reporter for The Saturday Paper Rick Morton, on the woman called the ‘Alan Joyce slayer’, and how she hopes to stop Australian consumers from being duped.

It’s Monday, September 18.

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ANGE:

Rick, I want to start by talking about big Australian corporations, because all through this cost of living crisis, I guess there's been a sense that lots of them have been getting away with things like price gouging and taking advantage of consumers. Are we finally seeing some of them face consequences for doing that?

RICK:

Thank you for pointing it out, because I think there's a lot of community anger at the moment. We're seeing record profits from, you know, airlines like Qantas, from the big banks, from supermarket chains, all while they're putting up prices because they say that inflation is adding to their cost of doing business and the supply shocks overseas and yada, yada, yada, yada, like it's all…That's the story we've been told as customers. But then we see these record profits. On the other hand, we go, Hang on a second. I thought everything was getting expensive to do business. How are you making these enormous returns? And so there's this general sense of anxiety and frustration in the community. And just in the last couple of months alone, we've had some pretty big cases brought against corporate Australia precisely because of that community angst. So first you had, you know, gas companies facing $50 million worth of fines for breaching transparency obligations.

Audio Excerpt – Reporter 1:

“The ACCC is examining allegations energy companies were gaming the system”

RICK:

Then, of course, you had two very large Australian banks who were denied a merger over fears around competition…

Audio Excerpt – Reporter 2:

“The competition watchdog has knocked back the ANZ proposed $5 billion takeover of Queensland's Suncorp Bank. The ACCC found it could have a detrimental impact on lending”.

RICK:

And then the biggest of them all…

Audio Excerpt – Reporter 3:

“The ACCC is taking legal action against Qantas, claiming the company was selling tickets for flights it had already cancelled. The consumer watchdog believes over 8000 tickets were sold for flights that had been cancelled sometimes weeks earlier.”

RICK:

And arguably it was that case in combination with the fact that Qantas had just announced a $2.47 billion record profit that forced Alan Joyce to bring his retirement, his resignation forward by two months. And all of these cases have one thing in common in that they'd been brought by Australia's consumer watchdog, the ACCC, which is the Australian Competition and Consumer Commission.

ANGE:

Yeah. And can you tell me a bit more about the new chair of the agency? Because I know agency commissioners are often very present in the media, but I feel like I don't know a whole lot about their relatively new chair.

RICK:

Honestly, I was the same, you know, I knew who Rod Sims was. I basically grew up with Allan Fels, the founding chair of the ACCC, and they were everywhere. They were on the morning TV shows talking about the price of toothpaste and, you know, Choice magazine and all the rest of it. And then you get Gina Cass-Gottlieb, who's the chair of the ACCC. She's been in the job for about 18 months and they've just announced this enormous case against Qantas. And she's essentially saying they need to pay a price for what they've done. And I've not heard a regulator talk that directly in a very long time, I must admit, as a journalist. So I managed to get her on the phone

Audio Excerpt – Rick Morton:

“…say that you’ve been busy during your tenure at the ACCC”

Audio Excerpt – Gina Cass-Gottlieb:

“It has been extremely busy and…”

RICK:

…and we had a good chat about her kind of philosophy and her approach to regulation. You know, I was kind of interested. I'm like, Who is she like? And she seemed like a bit of a go-getter. And she was the opposite in the sense that she was just like very matter of fact, very determined, very deliberate.

Audio Excerpt – Gina Cass-Gottlieb:

“We have an enduring priority to watch and to act as the consumer protection regulator.”

RICK:

She was a corporate lawyer. She founded the competition and regulation practice at Gilbert and Tobin as a partner in the 1990s. And she's been there ever since until she was appointed to this role. She was considered to be the best competition lawyer in the country. I mean, she's represented some of the biggest corporate players. You know, she represented the ABC, the SBS, but also Kerry Packer, the Murdoch family. And so I was just like, well, how do you do that job right? How do you then turn and become a consumer advocate? And I think I figured out pretty quickly within, you know, starting our conversation that she doesn't see any conflict between what is good for consumers and what is good for business. In fact, they ought to be the same thing. She said they serve each other. And then she went on to say, you know, I put it this way vigorous, effective and robust competition delivers benefits for consumers.

Audio Excerpt – Gina Cass-Gottlieb:

“It means that consumers have more choice, lower prices. It also delivers benefits for innovation, productivity and sort of spurring businesses to do better and to better meet consumer needs and preferences and equally interlinked with that well-informed and not misled consumers benefit business and competition because then competition happens on its merits, not on the basis that people have been misled.”

RICK:

And I think that's really interesting, given that we are in a cost of living crisis because consumers, they just don't want to be diddled, basically.

ANGE:

Yeah. And Gina Cass-Gottlieb obviously is an advocate for competition in markets. But the biggest part of her job is holding companies and corporations to account when they do the wrong thing against consumers. That's a really big mandate. Where do you even begin with that as chair leading this commission? How do you prioritise who to go after?

RICK:

Yeah. A very good question and I guess you've got big companies and you've got small companies and proportionally. And she, you know, openly says this because it's her job as a regulator. The bigger you are, the harder they're going to go against you. And she said, and actually, the easiest way, the best way to get a large company to pay attention is to bring court proceedings against them. So taking a company like Qantas serves that warning function not just to Qantas but to other companies of all sizes. Cass-Gottlieb is a corporate lawyer who understands the law and expects big companies in particular to not just understand it but to have the resources to do the right thing in the first place. And one of the ways they kind of find out what's going on is the best intelligence of all. It's consumer tip offs. There were 2600 complaints about QANTAS, the most complained about business in the country.

ANGE:

Is it worrying, do you think, that, you know, over the last couple of decades now we've seen competition be watered down in all kinds of sectors to the point that corporate Australia, you know feels like it can try out these kind of tactics in the first place, even if the agency is going after big companies like that, have they failed by letting them get to this point in the first place?

RICK:

Yeah, I raised this with her and I said, perhaps I'm getting too philosophical, but it did really seem to me that you've got across the ideological spectrum, all of whom agree or for different reasons that billionaires and large corporations seem to have, you know, pretty cosy place at the table at the moment. While things are not going well for you and I. And, you know, Cass-Gottlieb absolutely understands this issue. And she said, you know, we have sectors of our community who are undoubtedly significantly disadvantaged and also face vulnerability and harm to them. And she said we consider we have an enduring priority to watch and to act. And essentially it's not just about doing your job as a regulator, but it's about keeping the peace.

ANGE:

Coming up after the break - Why new ways of misleading consumers, has to mean new powers for the ACCC…

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ANGE:

Rick, from what we've been talking about, it's clear that the ACCC and Gina Cass-Gottlieb, very active and motivated. How does she see the commission going after some of her big priorities in the near future?

RICK:

You know, currently they're looking at greenwashing as, as Cass-Gottlieb puts it, and also just digital platforms in general, which, as she points out, are the two largest transformations going on in the world. And so when we talk about greenwashing, it's the really simple stuff, like when you buy a soap or shampoo and it says that it's environmentally friendly and actually it's carbon offset and they're going to plant ten trees. The ACCC wants to make sure that when a company makes a claim, it damn well better be able to verify it because suddenly there's money in being green. Even in a cost of living crisis, people are willing, people who can afford to, are willing to pay a premium if they can get something that is better for the environment and so the ACCC doesn't get to write the policy around what you can and can't offer as a company. But it does get to say you've got to be honest. And digital platforms, well, lordy, where do you even begin? I mean, digital platforms control so much of our lives, and yet there are so few of them that truly offer anything that even comes close to being, you know, honest dealings. Particularly, she gave me this example where, you know, when people are signing up for something and you've gone through all these steps and it says it's $12 a month, and right at the end it says actually it's $15 because we've now had this thing on and you can't get out of it. But, you know, psychologically, we'd already made the decision to purchase. So we kind of just do. That's misleading.

And in Cass-Gottlieb is paying particular attention to the EU and the United Kingdom, because, you know, we have to and big tech is at the forefront of a lot of these kind of moves by business to try and circumvent consumer law or to circumvent, you know, frankly, quite a lot of laws, actually, when you when you sit down and think about it. And so you've got to be paying attention to these things before they get to Australia, because a lot of the tech giants will try this stuff elsewhere in other markets before they might try and hoodwink us down here. So what Cass-Gottlieb is looking at and the ACCC is looking at in particular is, well, how do we actually, you know, there's no point if you've got more money than most countries, i.e. Facebook, Google fines aren't really going to deter you. In fact, she says that they just price it in. And so she wanted to look at a way for how you get around that as a regulator when your punishments don't seem to be working?

ANGE:

So, Rick, a regulator is only as useful as how much power it has and what it can actually do in whatever space it's regulating. How much do we need parliament and the government to back stronger rules, more forward thinking rules for cooperation to give the agency more power?

RICK:

Well, I mean, I think one of the arguments or the criticisms against regulators everywhere often is that they don't use the powers they have. Right. But the agency seems to be using them to the fullest extent that they can. And so then it becomes a question of what more might they want. And that's certainly one of the propositions that Gina Cass-Gottlieb Labor's put to the government in the speech she gave at the National Press Club in April about merger law reform.

Audio Excerpt – Gina Cass-Gottlieb:

“After 12 months in this role. I have observed firsthand the challenges with our current settings and formed the view that changes are needed.”

RICK:

You know, she's of the view that most mergers are actually very good…,

Audio Excerpt – Gina Cass-Gottlieb:

“The vast majority of merger transactions do not harm competition and can provide benefits, including by allowing firms to achieve efficiencies, diversify risk or enter new markets.”

RICK:

…but then you get the ones at the pointy end where they really do either destroy a market or distort a market and ruin prospects for consumers.

Audio Excerpt – Gina Cass-Gottlieb:

“We should also acknowledge that mergers can entail a material change in the structure of a market. The ACCC needs to have the tools necessary to be able to properly scrutinise and if necessary, prevent those mergers that are likely to substantially lessen competition.”

RICK:

And so, she's of the view that those laws currently constituted don't go far enough or don't give them the right skillset to call for information from companies who are involved in those mergers about what will happen at the end. Can they be stopped? And that's where we get this competition review announced by Treasurer Jim Chalmers when he's talking about, well, what are the settings across the economy? He name checked Cass-Gottlieb's recommendations on merger law reform as being considered by this, which he's only just announced. So already now that's something that she's put on the radar. And finally, the regulator isn't just going to sit there and say, No, we've got everything we need, which a lot of them do, by the way, because they don't want to ruffle any feathers.

ANGE:

So I guess this isn't just about trying to catch businesses that do the wrong thing. What Gina Cass-Gottlieb is really talking about here is that the way we regulate corporations in Australia probably has to change. The government and her own organisation might need to try new approaches.

RICK:

Yeah, I mean they absolutely do. And I think I mean I certainly Cass-Gottlieb recognises that and when she started talking to me about, you know, setting rules and terms and conditions for big corporations like those tech giants in Europe where they're trying to say, well here's very explicit things that you can and can't do now, rather than tell you after the fact that something's gone wrong and then we take you to court and then it takes five years and then you get hit with a billion dollar fine, which you can easily afford to pay that you priced in. That's not really deterring anyone, right? So they're trying to stop that from happening in the first place. You know, I think the scales need to be more finely rebalanced in favour of consumers everywhere around the world, but particularly where, you know, free markets have been a little not too free, but literally haven't been regulated properly at all. And I think these things only work when you've got the wisdom of outside eyes paying attention and keeping everybody honest. You need a regulator who is willing to listen and believe those complaints, but also use their powers and their resources to investigate them. And honestly, you know, Gina Cass-Gottlieb, she's scary smart. So if I was corporate Australia, I would be paying a lot of attention to what she's doing right now.

ANGE:

Rick, thanks so much for your time today.

RICK:

Thanks Ange, appreciate it.

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ANGE:

Also in the news today…

An investigation by the London Times and the UK’s Channel 4 has accused British comedian Russell Brand of sexual assault and emotional abuse. Five alleged victims were interviewed in a documentary. One named only as ‘Alice’ said she was 16 when the then 31 year old Brand assaulted her. Brand issued a video statement denying all of the allegations.

And…

Marches in support of the Voice to Parliament were held in cities across Australia over the weekend, drawing thousands of supporters. The marches coincide with a new $20 million dollar advertising blitz, to be rolled out across tv, radio and print – starting this week.

I’m Ange McCormack. This is 7am. We’ll be back again tomorrow.

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