Notice of Inquiry into the Supply of Foreign Currency Conversion Services

Overview

The Australian Competition and Consumer Act 2010 was enacted to provide a framework for consumer protection, fair trading, and competition regulation. This Act aims to address issues such as unfair trading practices, misleading or deceptive conduct, and anti-competitive behaviour, thereby fostering a competitive marketplace and protecting consumers. The Australian Parliament, as the enacting body, established this legislation with the primary objective of enhancing consumer welfare and economic efficiency through effective competition policies. In response to concerns about the supply of foreign currency conversion services, the Treasurer, the Hon Josh Frydenberg MP, issued a notice on 2 October 2018, authorising the Australian Competition and Consumer Commission (ACCC) to conduct an inquiry under subsection 95H(2) of the Act. The ACCC's inquiry seeks to examine various aspects of the foreign currency conversion services market, including pricing, competition levels, barriers to entry, and factors that might impede consumer comparison of services and prices. The ACCC is required to submit its findings to the Treasurer by 31 May 2019, aiming to identify any issues and recommend appropriate measures to improve market conditions and consumer outcomes.

Scope and Application

The Australian Competition and Consumer Commission (ACCC) has been tasked with conducting an inquiry into the supply of foreign currency conversion services, as approved by the Treasurer on 2 October 2018. This inquiry, which falls under subsection 95H(2) of the Competition and Consumer Act 2010, is not centred on the actions of specific individuals, entities, or state and territory authorities, but rather on the broader market dynamics and consumer experiences within the industry. The scope of the inquiry includes examination of the pricing and costs associated with foreign currency conversion services, the level of competition among existing service providers, potential barriers to entry and expansion in the market, and factors that may restrict consumers' ability to compare services and prices effectively. The inquiry, which began on the date of its announcement, is set to conclude by 31 May 2019, with the ACCC expected to submit a comprehensive report to the Treasurer. Additional details regarding the inquiry can be accessed on the ACCC’s official website.

Key Provisions

Pursuant to the notice issued by the Treasurer, the Australian Competition and Consumer Commission (ACCC) has been authorised to conduct an inquiry into the supply of foreign currency conversion services, under subsection 95H(2) of the Competition and Consumer Act 2010 (the Act). The ACCC’s inquiry will consider various aspects of the market, including the pricing and costs associated with supplying foreign currency conversion services (I), the level of competition between existing suppliers (II), the barriers to entry and expansion in the market (III), and factors that may limit consumers' ability to compare services and prices effectively (IV). The inquiry, which began on 2 October 2018, is not focused on any particular suppliers or state authorities but rather seeks to understand the broader market dynamics. The ACCC is required to submit its findings to the Treasurer by 31 May 2019. The Act imposes specific obligations on the ACCC in conducting this inquiry. Firstly, the ACCC must ensure that the inquiry is thorough and comprehensive, taking into account all relevant factors as outlined in the notice. This includes gathering and analysing data, consulting with stakeholders, and considering the economic implications of the findings. The ACCC is also required to maintain transparency and fairness in its processes, ensuring that all parties have an opportunity to provide input and evidence. Furthermore, the ACCC must adhere to any additional guidelines or directives provided by the Treasurer during the course of the inquiry. Breaching the obligations imposed by the Act can lead to various consequences. While the Act does not explicitly outline specific offences or penalties for non-compliance in this context, failure to conduct the inquiry as mandated could potentially result in legal challenges or sanctions. The Treasurer, who has the authority to approve the inquiry, may also take administrative action against the ACCC if the obligations are not met satisfactorily. Additionally, if the inquiry’s findings are deemed inadequate or biased, it could lead to public scrutiny and potential reputational damage for the ACCC. The consequences for non-compliance or failure to adhere to the Act’s requirements can also extend to the entities involved in the foreign currency conversion market. If the inquiry reveals anti-competitive practices or misleading conduct, these entities could face regulatory action, fines, or other penalties under the Competition and Consumer Act. The maximum penalties for breaches of the Act can be significant, with financial penalties for corporations potentially reaching into the millions of dollars, depending on the severity and nature of the breach. Moreover, individuals responsible for such breaches may also face personal penalties, including fines and imprisonment. In summary, the Act mandates the ACCC to conduct a comprehensive inquiry into the supply of foreign currency conversion services, with specific obligations to consider various market factors. Failure to meet these obligations could lead to legal and administrative consequences for the ACCC, while entities found to be in breach of competition laws could face substantial penalties. The inquiry aims to ensure that consumers have access to fair and competitive foreign currency conversion services, thereby promoting market integrity and consumer protection.