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2013-2014-2015
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
COMPETITION AND CONSUMER AMENDMENT (PAYMENT SURCHARGES)
BILL 2015
EXPLANATORY MEMORANDUM
(Circulated by the authority of the
Treasurer, the Hon Scott Morrison MP)
Table of contents
Glossary ................................................................................................. 1
General outline and financial impact....................................................... 3
Chapter 1 Ban on excessive payment surcharges ......................... 5
Chapter 2 Statement of Compatibility with Human Rights ............17
Index......................................................................................................21
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
ACCC The Australian Competition and Consumer
Commission
ACL Australian Consumer Law
the Bill Competition and Consumer Amendment
(Payment Surcharges) Bill 2015
CC Act Competition and Consumer Act 2010
ICCPR International Covenant on Civil and Political
Rights
the Inquiry Financial System Inquiry
PSR Act Payment Systems (Regulation) Act 1998
RBA The Reserve Bank of Australia
1
General outline and financial impact
Overview
Schedule 1 to the Competition and Consumer Amendment (Payment
Surcharges) Bill 2015 (the Bill) amends the Competition and Consumer
Act 2010 (CC Act) to establish a legislative and regulatory framework to
ban surcharges imposed in respect of particular payment methods that
exceed the cost of acceptance for those payment methods. The
amendments will apply to excessive surcharges in respect of payments
covered by a Reserve Bank standard or by regulations made for this
purpose. Surcharges will be excessive where they exceed the permitted
amount specified in the Reserve Bank standards or in the regulations.
The amendments also ensure that the Australian Competition and
Consumer Commission (ACCC) is the primary enforcement agency for
the ban and that it has appropriate powers of enforcement.
Date of effect: The amendments will commence on the day the Bill
receives Royal Assent. However, the provisions will have substantive
effect only on the making of a new Reserve Bank standard or regulations
that set out the permitted surcharge for a payment method.
Proposal announced: The Government announced on 20 October 2015 its
intention to introduce this ban on excessive card surcharging as part of the
Government's response to the Financial System Inquiry (the Inquiry).
Financial impact: Nil.
Human rights implications: This Bill does not raise any human rights
issue. See Statement of Compatibility with Human Rights -- Chapter 2.
Compliance cost impact: There is no regulatory compliance cost
associated with this Bill.
3
Chapter 1
Ban on excessive payment surcharges
Outline of chapter
1.1 This Chapter provides an overview of the Bill and describes how
the legislative and regulatory framework of the ban on excessive payment
surcharges will be implemented.
Context of amendments
Policy background
1.2 The payments system plays a vital role within the financial
system in facilitating transactions between parties in effective and
efficient ways.
1.3 The Reserve Bank of Australia (RBA) has wide-ranging powers
in the payments system as set out in section 10 of the Payment Systems
(Regulation) Act 1998 (PSR Act). This includes the setting of a Reserve
Bank standard on payment systems designated by the RBA for regulation.
1.4 The RBA has designated the eftpos (debit and prepaid),
MasterCard and Visa (credit, debit and prepaid) and American Express
companion cards payment systems under the PSR Act. There are other
payment systems that have not to date been designated, including
American Express and Diners Club proprietary cards, amongst others.
American Express and Diners Club have provided voluntary undertakings
to the RBA to comply with existing Reserve Bank standards on
surcharging.
1.5 The Reserve Bank standards apply to the designated payment
systems and cover a range of aspects including interchange fees and
merchants' card surcharge arrangements. For instance, under the Reserve
Bank standard on merchant pricing, regulated payment system may not
prevent merchants from imposing a surcharge on customers who pay with
credit cards. American Express and Diners Club have voluntarily
undertaken not to prevent merchants from imposing charges on customers
who pay with their cards.
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Competition and Consumer Amendment (Payment Surcharges) Bill 2015
1.6 The Reserve Bank standards allow card payment systems to
limit a merchant's surcharge to 'the reasonable cost of acceptance', which
includes - but is not limited to - the merchant service fee that the
merchant pays to its financial institution. Limits on surcharges are
established by the rules of any card payment system that chooses to adopt
them, though the Reserve Bank standards do not oblige the card payment
systems to alter their rules to limit surcharges, or to enforce rules that are
in place.
1.7 Throughout the Financial System Inquiry (the Inquiry), the
community expressed significant concern that certain surcharges being
imposed were at times far in excess of what could be fairly considered to
be the costs to merchants of accepting cards. There were in excess of 5000
submissions on credit card surcharging. Most of the submissions called
for surcharges to be banned. Some industry submissions noted the
important role surcharging could play in accurately reflecting the costs
faced by merchants in accepting certain high-cost payment methods.
1.8 The Government, in its response to the Inquiry's
recommendations on interchange fees and customer surcharging, agreed
to take action to improve interchange fee and surcharging arrangements to
achieve a more efficient system and deliver fairer outcomes for
consumers, merchants and system providers.
1.9 The amendments contained in this Bill will enhance
transparency for consumers and improve price signals on payment method
costs, helping consumers to understand the costs of competing payment
methods and encouraging the use of the most efficient methods of
payments.
1.10 The measure will also ensure that any cases of excessive
surcharging can be readily addressed by the ACCC which will be the
primary enforcement agency for the ban.
1.11 Under the CC Act as it currently stands, there is no specific
prohibition against excessive surcharging. However, there are existing
provisions that prohibit false and misleading misrepresentations. The
amendments will complement these existing provisions of the CC Act.
Summary of new law
1.12 The amendments set up the legislative and regulatory framework
to ban excessive card surcharging and establish the ACCC as the primary
enforcement agency for the ban. It does this by inserting a new Part IVC
into the CC Act.
6
Ban on excessive payment surcharges
1.13 Payment surcharges will be excessive where:
• the surcharge is for a kind of payment covered by:
- a Reserve Bank standard; or
- regulations made for the purposes of the ban; and
• the amount of the surcharge exceeds the permitted
surcharge referred to in the Reserve Bank standard or the
regulations.
Comparison of key features of new law and current law
New law Current law
Excessive surcharging by merchants Excessive surcharging by merchants
- where the additional cost passed on may be (and usually is) prevented
is above the merchant's cost of under contractual arrangements
acceptance of the payment method - between payment systems and
will be banned. merchants, but are not banned by law.
The ACCC will be the primary The RBA has sole responsibility for:
enforcement agency for the ban. ï€- designating a particular payment
The permitted surcharge will be set in system as being subject to RBA
most cases by the RBA but by regulation; and
regulation if necessary in relation to
ï€- setting standards and rules for
payments systems that are not
participation in the payment
covered by an RBA standard.
system.
Detailed explanation of new law
1.14 With a view to ensuring that surcharges imposed for using
particular payment methods do not exceed the cost of accepting payment
by that means, the Bill inserts a new Part IVC in the CC Act which:
• prohibits charging excessive payment surcharges; and
[Schedule 1, item 3, Part IVC, Division 2, CC Act]
• provides the ACCC additional powers to gather information
and issue infringement notices in enforcing the ban on
excessive surcharges. [Schedule 1, item 3, Part IVC, Division 3,
CC Act] [Schedule 1, item 3, Part IVC, Division 4, CC Act]
7
Competition and Consumer Amendment (Payment Surcharges) Bill 2015
1.15 Section 6 of the CC Act currently extends the application of
parts of the CC Act to persons who are not corporations in reliance of the
Commonwealth's constitutional powers in relation to trade and commerce
and other powers. Section 6 is amended to similarly extend the application
of the CC Act in reliance on the Commonwealth's constitutional powers
in relation to postal, telegraphic, telephonic and other like services for the
purposes of the new Part IVC of the CC Act. As a result the ban on
excessive surcharging will apply to both corporations as well as certain
persons who are not corporations where the payment surcharge was
charged for processing a payment by means of an electronic
communication (or similar) means and in the other relevant circumstances
specified under section 6. [Schedule 1, item 2, subsection 6(2E), CC Act]
1.16 The extension is facilitated by adding a definition of electronic
communication to section 4 of the CC Act to clarify that these
communications by means of guided and/or unguided electromagnetic
energy should be considered an 'other like service' for the purposes of the
CC Act, and in particular for subsection 6(2E). [Schedule 1, item 1,
subsection 4(1), CC Act]
Excessive payment surcharging
1.17 The Bill amends the CC Act to include a ban on excessive
surcharging. This will allow the ACCC to take action against corporations
(and others specified under subsection 6(2E) of the CC Act) that engage in
excessive surcharging. [Schedule 1, item 3, Part IVC, Division 1, CC Act]
1.18 The amendments to the CC Act include an overview of the
object of the new Part IVC. The object reflects that the aim of this
legislation is to prevent excessive surcharging while recognising the
important role that appropriate surcharges plays in effective price
signalling - informing consumers about the relative costs of particular
payment methods. [Schedule 1, item 3, section 55, CC Act]
1.19 A 'listed corporation' is given the same definition as used in the
Corporations Act 2001. It means a body corporate that is included in an
official list of a prescribed financial market. [Schedule 1, item 3, section 55A,
CC Act]
1.20 A payment surcharge means:
• an amount charged, in addition to the price of the goods or
services, for processing payment for the goods or services;
or
• an amount (however described) charged for using one
payment method rather than another.
8
Ban on excessive payment surcharges
1.21 The definition is split into two self-contained subparagraphs so
as to maximise coverage and minimise avoidance. The intention is to
capture payments that are, in substance, imposed as a result of the use of a
particular payment method. Paragraph (a) refers to charges "for
processing payment". This term intends to cover merchants' processes
surrounding card acceptance, including the process of incurring costs for
accepting cards. For example, if a merchant charges a 2 per cent surcharge
for use of a particular payment method, and this is expressed or implied to
be compensation for the cost of accepting the card, then the 2 per cent
surcharge is 'for processing payment' and is a payment surcharge within
paragraph (a).
1.22 Paragraph (b) of the definition of 'payment surcharge' is
intended to extend the definition to include charges that may be described
in a way that implies they are unrelated to particular payment methods,
but in substance are so related. For example, if charges described as
'booking', 'service', or 'transaction' fees are in substance imposed as a
result of the payment being made by card rather than an alternative
payment method such as cash or direct debit (as would obviously be the
case if they applied to card payments but not those other payment
methods), they are intended to be caught by the ban. If on the other hand,
additional fees are applied equally regardless of payment method used,
and do not purport to be for the purpose of compensating for the cost of
payment acceptance, they are not properly 'payment surcharges' and are
not intended to be caught. Uniform 'add-on' payments such as these will
remain subject to other consumer protection action to the extent that they
breach misleading and deceptive conduct or other consumer protection
provisions (see for instance, section 48 of the Australian Consumer Law
(ACL)). [Schedule 1, item 3, section 55A, CC Act]
1.23 Similarly, if a merchant offers two alternative payment methods
and the price of the underlying good or service using the cheapest method
is $100, while the price using an alternative method is $110, then the
merchant has charged a payment surcharge under subparagraph (b) of the
definition, and the amount of the surcharge is $10.
1.24 Reserve Bank standard means a standard determined under
section 18 of the PSR Act. Under this section, the RBA has the power to
impose an access regime on a payment system and to establish standards
to be complied with by participants in the system. These standards are
then published by the RBA. The RBA has indicated that it will be
consulting on standards to operate for the purpose of this law. The
relevant standards for the purposes of the ban will be those made by the
RBA after the commencement of the Bill. [Schedule 1, item 3, section 55A,
CC Act]
9
Competition and Consumer Amendment (Payment Surcharges) Bill 2015
1.25 Subsection 55B(1) in Division 2 of Part IVC bans excessive
payment surcharging. It contains two elements. A corporation in trade or
commerce makes an excessive surcharge if:
• it imposes a 'payment surcharge' (as defined in section
55A); and
• that payment surcharge is excessive (as defined in
subsection 55B(2)). [Schedule 1, item 3, section 55B, CC Act]
1.26 The definition of 'excessive' makes clear that the ban in
subsection 55B(1), will only apply in respect of payments covered either
by a Reserve Bank standard or through regulations. The ability to add
payment methods by regulation provides an alternative avenue for
extending the ban, in the event that there are significant concerns about
surcharging on payment methods that are not directly covered by a
Reserve Bank standard. This will also give flexibility to the legislation as
new and innovative payment methods emerge. [Schedule 1, item 3, paragraph
55B(2)(a), CC Act]
1.27 The RBA will undertake its normal process in determining
which schemes should be designated through the Payments System Board.
The RBA has also entered into undertakings with a number of card
schemes in relation to surcharging matters. The legislative ban on
excessive surcharging is expected to have flow-on effects on merchant
behaviour in respect of surcharging on cards in those schemes. However,
in the event that excessive surcharging practices arise outside designated
schemes, the RBA could be expected to consider explicit designation of
those schemes. Alternatively, regulations could be made to cover those
schemes.
1.28 A surcharge will be excessive if, and only if, that surcharge
exceeds a level for surcharging permitted under either a Reserve Bank
standard which covers the kind of payment (as set out in subparagraph
55(2)(a)(i)) or else set out in the regulations. For instance, if a Reserve
Bank standard refers to some fixed amount for a particular payment
method, or to a specific range of input costs, the amount of the payment
surcharge must not exceed the amount stated or calculated as the
permitted surcharge. [Schedule 1, item 3, paragraph 55B(2)(b), CC Act]
1.29 The ban on excessive payment surcharges will not apply to a
corporation which is exempted from the operation by a specific
regulation. This will give flexibility to remove doubt in cases where a
price or charge may inadvertently be caught as a payment surcharge, but
where this result is not intended. [Schedule 1, item 3, subsection 55B(3), CC Act]
10
Ban on excessive payment surcharges
Surcharge information notices
1.30 Division 3 of Part IVC gives a power to the ACCC to collect
information and/or documents from a party likely to possess information
and/or documents around either the amount of the payment surcharge or
the cost of processing a particular payment. Section 55C sets out
information about the surcharge information notice:
• the form and content of the notice; and
• the parties to whom a notice can be issued. [Schedule 1, item 3,
section 55C, CC Act]
1.31 Surcharge information notices may be issued to any surcharge
participant. This has been defined so as to capture entities at various
stages in processing a payment and is designed to be broader than simply
the merchant at point of sale who applies the surcharge. For instance, it is
envisaged that the ACCC could issue a notice to a merchant's financial
institution (an 'acquirer') for relevant information about the fees charged
by the acquirer to a merchant. [Schedule 1, item 3, subsection 55C(2), CC Act]
1.32 A recipient of a surcharge information notice may apply for an
extension to provide surcharge information within 21 days of being given
the surcharge information notice. The ACCC may extend the period for
providing information by giving notice in writing. [Schedule 1, item 3,
section 55D, CC Act]
1.33 The Bill creates an offence of strict liability for a failure to
comply with a surcharge information notice issued under section 55C. The
penalty is set at 30 penalty units (presently $5,400). These penalty
amounts are in line with penalty amounts applied under the ACL for
similar offences. To ensure timely compliance with the ACCC's request it
is appropriate that these offences exist without the need to prove intent on
the part of the surcharge participant issued with the notice. Overarching
natural justice protections, as well as Criminal Code provisions around
voluntariness, will apply in cases where it is impossible for the notice to
be complied with, including in cases where the surcharge participant does
not possess and cannot obtain the information requested. [Schedule 1, item 3,
section 55E, CC Act]
Infringement notices
1.34 Division 4 of Part IVC provides the ACCC with the power to
issue infringement notices in relation to the ban on excessive surcharging.
This power is consistent with the ACCC's existing powers to issue
infringement notices in relation to the ACL. The use of infringement
11
Competition and Consumer Amendment (Payment Surcharges) Bill 2015
notices will supplement the other enforcement powers included in the Bill.
[Schedule 1, item 3, Part IVC, Division 4, CC Act]
1.35 The capacity to issue an infringement notice is not intended to
amount to the imposition of a financial penalty by the ACCC. It is
intended, instead, to provide a mechanism through which a person who, in
the opinion of the ACCC, has contravened the new section 55B of the
CC Act may forestall an application to the courts by the ACCC for
judicial relief, including for an order under section 76 of the CC Act for
the payment of a pecuniary penalty.
1.36 Infringement notices allow the ACCC to take action against
minor breaches of the provisions more efficiently and effectively than
through court action alone, and provide the potential for a speedier
resolution of matters than is possible through the courts (although this
would depend on the complexity of each matter).
1.37 For infringement notices relating to those alleged contraventions
of section 55B, the infringement notice amounts are:
• 600 penalty units (presently $108,000) for listed
corporations;
• 60 penalty units (presently $10,800) for bodies corporate
that are not listed corporations; and
• 12 penalty units (presently $2,160) for persons other than
bodies corporate. [Schedule 1, item 3, section 55J, CC Act]
1.38 These penalty amounts are in line with the penalty amounts
applied under the ACL set out in section 134C of the CC Act.
1.39 Compliance with an infringement notice brings the process for
enforcing the alleged contravention to an end after its administrative
phase. Compliance with an infringement notice is not taken as an
admission of liability or a contravention of the CC Act. Furthermore, if a
person complies, they are not liable to be subject to further civil or
criminal proceedings in relation to the alleged contravention. [Schedule 1,
item 3, section 55K, CC Act]
1.40 An infringement notice does not give rise to an enforceable
requirement to pay the penalty. If a person does not comply with the
infringement notice within the period of time specified, the ACCC cannot
enforce the infringement notice itself. Instead the ACCC may bring
proceedings against the person in relation to the same alleged
contravention under section 76, but not for the failure to pay the penalty in
the infringement notice. [Schedule 1, item 3, section 55L, CC Act]
12
Ban on excessive payment surcharges
1.41 The ACCC will have the ability to extend the infringement
notice compliance period. The infringement notice compliance period is
initially 28 days. However, the ACCC may extend the infringement notice
compliance period for a further period of 28 days. [Schedule 1, item 3,
section 55M, CC Act]
1.42 The ACCC may withdraw an infringement notice if it considers
it appropriate, by written notice to the person. The mechanism under
which an infringement notice can be withdrawn is set out in the new
section 55M. [Schedule 1, item 3, section 55N, CC Act]
Amendments of the CC Act consequential on new ACCC
powers
Enforcement and penalties
1.43 Part VI of the CC Act deals with enforcement and remedies.
Subsection 75B(1) of the CC Act provides that a reference in Part VI to a
person involved in a contravention of certain other provisions within the
CC Act shall be read as a reference to a person who has been involved in
the contravention, for example, by aiding, abetting, being knowingly
concerned or conspiring in the contravention. Subsection 75B(1) is
amended so that it applies in relation to a contravention of section 55B.
[Schedule 1, item 4, subsection 75B(1), CC Act]
1.44 Subparagraph 76(1)(a)(i) of the CC Act is amended to provide
that a contravention of section 55B will attract effectively similar
penalties as a contravention of the prohibition on false or misleading
representations in section 29 of Schedule 2 to the CC Act. Contravention
of section 55B will incur maximum pecuniary penalties of 6,471 penalty
units (presently $1,164,780) for a body corporate and 1,295 penalty units
(presently $233,100) for a person that is not a body corporate. [Schedule 1,
item 5, subparagraph 76(1)(a)(ia), CC Act] [Schedule 1, item 6, paragraph 76(1A)(ba),
CC Act] [Schedule 1, item 7, paragraph 76(1B)(aa), CC Act]
1.45 The levels of pecuniary penalties also reflect the seriousness of
the contraventions and represent clear and strong, though proportionate,
disincentives for non-compliance. The effectiveness of the new
prohibitions hinges on the ability to deter, and where necessary enforce,
contraventions. Further, these penalty amounts are in line with the penalty
amounts under the ACL for a wide range of contraventions, including
false and misleading representations.
13
Competition and Consumer Amendment (Payment Surcharges) Bill 2015
Civil remedies
1.46 Subsection 80(1) of the CC Act states who may apply for
injunctions, and in what circumstances. Paragraph 80(1)(a) is amended so
that an injunction may be granted if the Court is satisfied that a person has
engaged, or is proposing to engage, in conduct that constitutes or would
constitute a contravention of section 55B. [Schedule 1, item 8,
subparagraph 80(1)(a)(iia), CC Act]
1.47 Section 82 of the CC Act currently provides that a person who
suffers loss or damage by conduct of another person done in contravention
of various provisions the CC Act may recover that amount against any
person involved in a contravention. Subsection 82(1) of the CC Act is
amended to apply it in relation to section 55B. [Schedule 1, item 9,
subsection 82(1), CC Act]
1.48 Section 83 of the CC Act provides that findings of fact in which
a person has been found to have contravened or been involved in a
contravention of certain provisions of the CC Act is prima facie evidence
of that fact for the purposes of section 82 proceedings. Section 83 is
amended to apply it in relation to section 55B. [Schedule 1, item 10, section 83,
CC Act]
1.49 Subsection 84(1) of the CC Act provides for the state of mind of
a body corporate to be established by reference to the state of mind of a
director, employee or agent of the body corporate in certain
circumstances. Subsection 84(1) of the CC Act is amended to apply it in
relation to section 55B. [Schedule 1, item 11, paragraph 84(1)(b), CC Act]
1.50 Subsection 84(3) of the CC Act makes a person vicariously
liable by imputing the state of mind of an employee or agent to the person
in certain circumstances. Subsection 84(3) of the CC Act is amended to
apply it in relation to section 55B. [Schedule 1, item 11, paragraph 84(3)(b),
CC Act]
1.51 Section 86 of the CC Act relates to jurisdiction of the courts and
confers jurisdiction for matters for certain civil procedures and other
matters under the CC Act on the Federal Circuit Court and on the several
courts of the States and of the Territories (subject to the Constitution).
Subsections 86(1A) and 86(2) are amended to apply give jurisdiction to
these courts in relation to section 55B. [Schedule 1, items 12 and 13,
subsections 86(1A) and 86(2), CC Act]
1.52 Section 86A of the CC Act relates to the transfer of certain
matters from the Federal Court to a State or Territory Court. Section 86A
of the CC Act is amended to allow for the transfer of proceedings relating
to section 55B. [Schedule 1, item 14, paragraph 86A(1)(b), CC Act]
14
Ban on excessive payment surcharges
1.53 Section 86C of the CC Act provides for the Court to impose an
order to undertake a community awareness program, publish an
advertisement, attend trade practices awareness training or implement a
trade practices compliance program. Section 86C is amended so that these
types of non-punitive orders are available as a remedy for a contravention
of section 55B. The amendments expressly provide that a community
service order or a probation order is not available as a remedy for either of
these new sections. [Schedule 1, item 15, subsection 86C(4), CC Act]
1.54 Section 87 of the CC Act confers a wide power on the Court to
make remedial orders in appropriate cases relating to conduct engaged in
contravention of certain provisions in the CC Act. Section 87 is amended
to apply in relation to section 55B. [Schedule 1, items 16 to 18, section 87,
CC Act]
15
Chapter 2
Statement of Compatibility with Human
Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Competition and Consumer Amendment (Payment Surcharges) Bill 2015
2.1 This Bill is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3
of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
2.2 Schedule 1 to the Bill amends the CC Act to establish a
legislative and regulatory framework to ban surcharges imposed in respect
of particular payment methods that exceed the cost of acceptance for those
payment methods. The amendments will apply to excessive surcharges in
respect of payments covered by a Reserve Bank standard or by regulations
made for this purpose. Surcharges will be excessive where they exceed the
permitted amount specified in the Reserve Bank standards or in the
regulations.
2.3 The amendments also ensure that the ACCC is the primary
enforcement agency for the ban and that it has appropriate powers of
enforcement. Human rights implications
Right to Privacy
2.4 The Bill may marginally engage the right to privacy under
Article 17 of the International Covenant on Civil and Political Rights
(ICCPR). Article 17 prohibits unlawful or arbitrary interferences with a
person's privacy. It provides that persons have the right to the protection
of the law against such interference. An interference with privacy will not
be arbitrary if it is not inconsistent with the provisions, aims and
objectives of the ICCPR and reasonable in the circumstances.
Reasonableness, in this context, incorporates notions of proportionality to
the objectives sought to be achieved.
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Competition and Consumer Amendment (Payment Surcharges) Bill 2015
2.5 The Bill gives the power to the ACCC to issue information
notices on corporations involved in payment processing (Schedule 1,
item 3, Division 3, Part IVC, CC Act). Failure to comply with an
information notice gives rise to an offence of strict liability. The
information and/or documents provided under these notices are necessary
to determine whether a surcharge has been excessive, in so far as it is
greater than the costs of accepting that payment.
2.6 To the extent that an individual's right to privacy is affected by
the Bill, the impact is not arbitrary. It is reasonable, necessary and
proportionate to the achievement of the legitimate objectives of banning
excessive surcharging of consumers.
Civil Penalties
2.7 The Bill introduces a new section which prevents a corporation
from making excessive payment surcharges (Schedule 1, item 3,
section 55B, CC Act). The existing pecuniary penalty regime (section 76
of the CC Act) is modified so that it applies to contraventions of this
prohibition (Schedule 1, items 5, 6 and 7). While the prohibitions are
directed at corporations, rather than individuals, individuals could become
liable for a pecuniary penalty either through the operation of section 6 of
the CC Act (Schedule 1, item 2), which extends the operation of the
CC Act to individuals in the circumstances described in that section, or on
the basis that the individual has aided or abetted a corporation's
contravention of these prohibitions (paragraph 76(1)(c); paragraphs
76(1)(d) and (e) might also be relevant). It is not anticipated that the direct
extension of the prohibitions to individuals through the operation of
section 6 of the CC Act will be significant.
2.8 Pecuniary penalties are civil, rather than criminal penalties, and
the civil standard of proof applies. Having regard to the nature and
severity of the penalty, however, it is accepted that the penalties should be
regarded as criminal penalties for the purposes of human rights law,
including Article 14 of the ICCPR.
2.9 Article 14(2) of the ICCPR provides that a person is entitled to
be presumed innocent until proved guilty according to law. Ordinarily,
this would require that the case against the person be demonstrated to the
criminal standard of proof. The criminal standard of proof is not applied
in relation to pecuniary penalty proceedings. Nevertheless, this is
compatible with Article 14(2) because the pecuniary penalty provisions
have a long and well-litigated history, and it has not been shown that the
failure to apply the criminal standard of proof has resulted in injustice.
Indeed, the courts have on numerous occasions indicated that the gravity
of the allegations being tested in the court will be taken into account, and
18
Statement of Compatibility with Human Rights
that the graver the allegation, the greater the strictness of proof that will be
required. In particular, more than just 'inexact proofs, indefinite testimony
or indirect references' will be required.
2.10 In any event, the pecuniary penalty provisions are directed
primarily at corporations, rather than individuals. If it is unnecessary to
apply the criminal standard of proof in relation to corporations, it would
be inappropriate to apply a different standard of proof to individuals, who
would ordinarily only be liable to the extent that they had aided or abetted
the contravening conduct of a corporation.
2.11 It is also relevant that the pecuniary penalty provisions are but
one of a number of enforcement provisions provided in the CC Act, which
include infringement notices (Schedule 1, item 3, Division 4, Part IVC,
CC Act), injunctions (Schedule 1, item 8, section 80, CC Act), non-
punitive orders (Schedule 1, item 15, section 86C, CC Act) and
compensation orders (Schedule 1, items 16, 17 and 23, section 87,
CC Act). The amendments made by the Bill tap into the existing
pecuniary penalty regime, and do not create a new regime.
2.12 Article 14(3)(g) of the ICCPR provides that a person has the
right "not to be compelled to testify against himself or to confess guilt" in
criminal proceedings. Nothing in the Bill is inconsistent with this
requirement, including the information notice provisions. Notwithstanding
the requirement under the new section 55D, an individual would be
excused from giving information or producing a document on the ground
that the information or document might tend to incriminate the individual
or expose the individual to penalty under overarching Common Law and
statutory principles.
2.13 Article 14(7) of the ICCPR provides that no one is to be liable to
be tried or punished again for an offence of which she or he has already
been finally convicted or acquitted. Nothing in the Bill is inconsistent with
this requirement. In particular, criminal proceedings cannot be brought for
substantially the same conduct that gave rise to the civil proceedings.
Conclusion
2.14 The Bill is compatible with human rights because the only
potential limitations on human rights that the Bill imposes relate to the
right to privacy and criminal process rights and they are reasonable,
necessary and proportionate in achieving the Bill's legitimate policy
objective of banning excessive payment surcharging.
19
Index
Schedule 1: Amendments
Bill reference Paragraph number
Item 1, subsection 4(1), CC Act 1.16
Item 2, subsection 6(2E), CC Act 1.15
Item 3, Part IVC, Division 4, CC Act 1.14
Item 3, Part IVC, Division 2, CC Act 1.14
Item 3, Part IVC, Division 3, CC Act 1.14
Item 3, Part IVC, Division 1, CC Act 1.17
Item 3, section 55, CC Act 1.18
Item 3, section 55A, CC Act 1.19, 1.22
Item 3, section 55A, CC Act 1.24
Item 3, section 55B, CC Act 1.25
Item 3, paragraph 55B(2)(a), CC Act 1.26
Item 3, paragraph 55B(2)(b), CC Act 1.28
Item 3, subsection 55B(3), CC Act 1.29
Item 3, section 55C, CC Act 1.30
Item 3, subsection 55C(2), CC Act 1.31
Item 3, section 55D, CC Act 1.32
Item 3, section 55E, CC Act 1.33
Item 3, Part IVC, Division 4, CC Act 1.34
Item 3, section 55J, CC Act 1.37
Item 3, section 55K, CC Act 1.39
Item 3, section 55L, CC Act 1.40
Item 3, section 55M, CC Act 1.41
Item 3, section 55N, CC Act 1.42
Item 4, subsection 75B(1), CC Act 1.43
Item 5, subparagraph 76(1)(a)(ia), CC Act 1.44
Item 6, paragraph 76(1A)(ba), CC Act 1.44
Item 7, paragraph 76(1B)(aa), CC Act 1.44
Item 8, subparagraph 80(1)(a)(iia), CC Act 1.46
Bill reference Paragraph number
Item 9, subsection 82(1), CC Act 1.47
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Competition and Consumer Amendment (Payment Surcharges) Bill 2015
Item 10, section 83, CC Act 1.48
Item 11, paragraph 84(1)(b), CC Act 1.49
Item 11, paragraph 84(3)(b), CC Act 1.50
Items 12 and 13, subsections 86(1A) and 86(2), CC Act 1.51
Item 14, paragraph 86A(1)(b), CC Act 1.52
Item 15, subsection 86C(4), CC Act 1.53
Items 16 to 18, section 87, CC Act 1.54
22