Wonder if there’s a parallel between consumers and shareholders when considering mistreatment/misguidance. Both suffer from arrogance from the business sector which is bod and mgt.
GLTA
https://www.copyright link/news/policy/accc-warns-arrogant-business-sector-of-huge-fines-20181221-h19e27
ACCCwarns 'arrogant' business sector of huge fines
06 Jan 2019 — 11:45 PM
Competition regulator Rod Sims has slammed the corporate sector as arrogant and warned companies that mislead consumers to expect fines in the hundreds of millions of dollars this year.
A fired-up Mr Sims also predicted the Australian Competition and Consumer Commission will increasingly clash with companies over merger proposals, and accused dealmakers of lying about wider benefits of potential takeovers.
The ACCC chairman said the Hayne royal commission into misconduct in the financial services sector and other scandals had exposed the business community for losing focus on their customers.
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"I think there's an element of arrogance aboutcorporate Australia," says Australian Competition and Consumer Commissionchairman Rod Sims. Photo: Jim Rice
"I think there's an element of arrogance aboutcorporate Australia, that they are in a privileged position and they can do asthey like in almost an unfettered way," Mr Sims told The AustralianFinancial Review.
"They just need to come down to earth a bit and realisewhy they exist and what they're there for. They need to regain control andfocus on long-term shareholder value, which means a focus on customers."
Mr Sims pointed to particularly egregious cases involvingTelstra, which was hit with $10 million in penalties by the Federal Court lastApril for misleading consumers about its premium direct billing services, andthe Ford Motor Company, which was ordered to pay the same amount after beingfound to have engaged in unconscionable conduct in relation to a problem withits transmissions.
"In the case of Telstra, you're getting 10,000complaints or more about their premium direct billing and you're doing nothingabout it. I mean, how does that happen? Mr Sims asked.
"Ford Motor company knew there were problems with itsPowerShift transmission, customers came into complain about it, and they saidit was their driving style. How does that happen?
"Companies have got to get back to what they used to domuch better, which was focus on their own customers."
'There will be some big penalties'
Mr Sims warned that breaches of consumer laws will be evenmore harshly dealt with under a new penalty regime that came into effect onJanuary 1.
Where companies could be hit with a penalty of up to $1.1million for each breach, they will now face penalties up to the higher of $10million or 10 per cent of turnover.
Under the new regime, Mr Sims said the ACCC would havepushed for penalties against Telstra and Ford "way north of $100million".
"That's going to be a focus for us in 2019 and therewill be some big penalties."
Mr Sims' comments come after the Australian Securities andInvestments Commission said last week in the Financial Review that itwas adopting a court first approach against business breaches and misconduct.
The ACCC faces several crucial merger decisions in the earlymonths of 2019, led by the merger between Vodafone and TPG Telecom, which willsee the third and fourth biggest players in telecommunications market broughttogether.
Mr Sims recalled a line he attributed to former Telstra chiefDavid Thodey, who said that "whenever you've got three players you getrational prices, whenever it goes to four you get pricing that can damageshareholder value".
Mr Sims said that despite this being obviously true, mergerparties often tried to claim that a deal that increased their profits couldstill be good for consumers.
"Why do profits go up? Because prices go up or servicesdeclines," Mr Sims said.
"We do get told lies, frankly. We get told all sorts ofthings that are just commercially unbelievable.
"Companies think we are commercially naive – we arenot. And they need to understand that."
Change of thinking required
Mr Sims accused the business community and financial mediaof too easily supporting mergers and said this thinking had to change.
"I just think we've still got a long way to go withmergers in Australia. I think there's this presumption that all mergers are OK,no merger should be stopped and it's OK to merge with your closestcompetitor," he said.
"We're ultimately going to look after the interests ofconsumers and I think increasingly there will be mergers where the aspirationsof the merger parties will clash with the ACCC's interest in protectingcompetition and consumers."
Mr Sims said the ACCC's focus on misleading of consumers wouldextend across motor vehicles, travel, health, online businesses, communicationsand other sectors.
The ACCC will also launch its first action under section 46,which targets abuses of market power, and also tipped a sharp rise in thenumber of criminal cartel cases on foot.
"I am confident we will have at least three criminalcartel cases next year and I think that will cement the program in."
In the middle of the year the watchdog will also release its final report into digital platforms. While thiscould have big implications for the media sector, Mr Sims says there arebroader questions about how companies are using customer data.
"Companies trading their customers' data is somethingthat I think is going to grow in focus, and it will growth beyond Facebook andGoogle," he said.
"At the moment companies get theirconsumers data and feel they can do anything they want with it.
