The Harper Review and the Power to Obtain Documents

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Table of Contents

• Section 155 of the Competition and Consumer Act
• Harper Review
• Other Recommendations
• Key Takeaways

The recent review of competition policy in Australia (the Harper Review) made a total of 42 recommendations. One centred on section 155 of the Competition and Consumer Act 2010 (Cth) (the Act) which concerns the investigative power of the Australian Competition and Consumer Commission (ACCC). Significantly, the recommendation would affect the scope of the ACCC’s power to compel a party to produce documents. We discuss below the recommendation, what it suggests and what it means for businesses.

Section 155 of the Competition and Consumer Act

Section 155 of the Act gives the ACCC, the Chairperson or a Deputy Chairperson the authority to require a person or company via written notice to provide any information and produce any document to the Commission. It also compels individuals to appear before the Commission as requested.

The ACCC, Chairperson or Deputy Chairperson must have reason to believe that a person is capable of producing documents relevant to a contravention of the Act. So, the ACCC can request documents or evidence if it is relevant to a decision of the making of an application on its behalf. An individual cannot refuse to comply with this request or knowingly provide false or misleading evidence, even if doing so incriminates or exposes them to a penalty (although in some cases, the information is only admissible in criminal proceedings). 

Harper Review

The ACCC does not need reasonable grounds for believing that a contravention has occurred to exercise its powers under section 155. The final report of the Harper Review notes that the majority of submissions on this section focussed on the often unreasonable cost of complying with a notice to produce documents. It further went on to say that the requirement in the Act to produce documents or provide information did not include the limit of reasonableness.

Effective competition policy should balance the rights of the regulator to compel businesses to provide information or documents against the overly burdensome cost to do so. In a digital era businesses can store vastly more information and documents than ever before. Consequently, complying with a notice issued under section 155 can mean producing thousands of documents. This runs contrary to a judicial system focussing on limiting the discovery process subject to the requirement of “reasonableness”.

As such, the panel recommended amending Section 155 to include a defence for a party perceived to have refused or failed to comply with a notice. It is then open to that party to demonstrate that it has undertaken a reasonable search to comply. The panel was also of the view that the ACCC has a responsibility to frame notices issued under the section as narrowly as possible in the circumstances. An amendment would correctly balance the need for the ACCC to compel information and documents where necessary with the need for individuals and businesses to satisfy their legal obligations.

Other Recommendations

Although the Review principally focused on section 155 notices, it also perceived that the integrity of competition law would increase if the ACCC were able to investigate compliance with court-enforced undertakings. The panel also supported increasing the penalty for contravention of the section, noting that a corporation’s failure to comply with a noticed issued by the Australian Securities and Investment Commission can be an $85,000 fine, the maximum under section 155 is $17,000. The low penalty arguably hindered the section’s ability to operate efficiently.

Key Takeaways

The Harper Review recommended amendments to section 155, significantly: 

• Including a defence for a party that has undertaken a reasonable search to comply with a notice; and
• Increasing the penalty for non-compliance with the section.

The Federal Government in response to the Competition Policy Review indicated it would support this recommendation and would expect the ACCC to do the same, reviewing its guidelines on section 155 notices in the digital environment.

If you have questions about your business’ rights regarding section 155, get in touch with our consumer lawyers on 1300 544 755.