Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021 - Commentary on Ministerial Responses [2021] AUSStaCSBSD 122 (16 June 2021)

• Chapter 2
• Commentary on ministerial responses
• Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021
• Significant matters in delegated legislation1
• Significant penalties4

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Chapter 2

Commentary on ministerial responses

2.1 This chapter considers the responses of ministers to matters previously raised by the committee.

Competition and Consumer Amendment (Motor Vehicle Service and Repair Information Sharing Scheme) Bill 2021

Purpose	This bill seeks to establish a scheme that mandates that service and repair information provided to car dealership and manufacturing preferred repairs be made available for independent repairs and registered organisations to purchase at a fair market price
Portfolio	Treasury
Introduced	House of Representatives on 24 March 2021
Bill status	Before the House of Representatives

Privacy

Significant matters in delegated legislation^[1]

2.2 The committee initially scrutinised this bill in Scrutiny Digest 6 of 2021 and requested the Assistant Treasurer's advice.^[2] The committee considered the Assistant Treasurer's response in Scrutiny Digest 7 of 2021 and requested an addendum to the explanatory memorandum containing the key information provided by the Assistant Treasurer, including examples of the types of personal information that it is intended may be prescribed in the rules, be tabled in the Parliament as soon as practicable.^[3]

Assistant Treasurer's response

2.3 The Assistant Treasurer advised:

I have considered the existing explanatory memorandum and consider that the information you have requested to be tabled is already sufficiently explained in the existing explanatory memorandum.
Paragraph 1.141 of the explanatory memorandum explains that, for the purpose of assessing whether the person is a fit and proper person to access safety and security information, the types of personal information that may be prescribed by the scheme rules will take into consideration information that is already used for similar purposes in the motor vehicle industry and licensing regimes that exist in some states. This could include a criminal records check being required to access certain types of security information to help prevent vehicle theft and associated crime.
The explanatory memorandum further explains at paragraph 1.143 that the scheme's rules may set out the types of offences that are relevant to the fit and proper person assessment. The scheme rules may set out what qualifications or workplace standards are required to access certain types of safety and security information (paragraphs 1.137 and 1.139)
The scheme's rules may also set out the period for which any personal information provided remains valid before the data provider can ask for updated information. For example, the scheme's rules may only allow a criminal record check to be done every two years, with the person required to certify that no changes have occurred to information previously provided. If changes have occurred, the data provider may request updated information in order to reassess if the individual is a fit and proper person.
Paragraph 1.144 of the explanatory memorandum makes it clear that the rules cannot prescribe 'sensitive information' under the Privacy Act 1988, other than a criminal records check. 'Sensitive information' is defined in section 6(1) of the Privacy Act 1988.
Public consultation will be undertaken as part of the development of the scheme rules. This will include consultation on what personal information should be prescribed in the scheme's rules for the fit and proper person test. This consultation is expected to commence soon.

Committee comment

2.4 The committee thanks the Assistant Treasurer for this response. The committee notes the Assistant Treasurer's advice that that the information the committee has requested to be tabled is already sufficiently explained in the existing explanatory memorandum.

2.5 In light of the information provided, the committee makes no further comment on this matter.

Significant penalties^[4]

2.6 The committee initially scrutinised this bill in Scrutiny Digest 6 of 2021 and requested the Assistant Treasurer's advice.^[5] The committee considered the Assistant Treasurer's response in Scrutiny Digest 7 of 2021 and requested the Assistant Treasurer's further advice as to the justification for the significant penalty (120 penalty units) that may be imposed via infringement notice under table item 4 of proposed section 57G upon persons who are not body corporates.^[6]

Assistant Treasurer's response^[7]

2.7 The Assistant Treasurer advised:

The majority of the infringement notices included in the Bill are consistent with the Guide to Framing Commonwealth Offences and with those for anti-competitive behaviour and failure to comply with consumer protections under the Competition and Consumer Act 2010 (CCA). Infringement notices provide the ACCC with flexibility to use administrative action for alleged contravention of a civil penalty provision, as an alternative to court proceedings.
The Bill contains only one instance of an infringement notice with penalty units that are higher than those recommended by the Guide to Framing Commonwealth Offences. This relates to a key obligation in the Bill, failing to supply scheme information within the required timeframe, which if not complied with by data providers would seriously undermine the Scheme. It is expected that most data providers will be large multinational motor vehicle manufacturers. In line with the Guide to Framing Commonwealth Offences, if the amount payable under an infringement notice is too low it is unlikely to be an adequate deterrent and may simply be paid as a cost of doing business. Therefore, in these circumstances I consider that the high penalty amounts for body corporates are justified. In order to prevent a potential avoidance mechanism, it is necessary to include proportionate penalties and infringement notices for individuals. Consistent with the Guide to Framing Commonwealth Offences, the level of penalties and infringement notices applied to individuals is set at one-fifth of the corresponding amounts set for corporations. As such, I consider that the proposed level of infringement notice for individuals is also appropriate.
If an infringement notice is issued, a person may elect not to pay the amount, in which case the ACCC may choose to pursue a civil penalty in court (see section 57GB of the Bill and section 51ACH of the CCA). The matter would then be heard by a court who could impose a penalty if they determine the person has contravened a civil penalty provision.
The penalties are aimed at preventing the frustration of the objectives of the scheme through non-compliance by data providers. They will deter data providers from undertaking anti-competitive conduct that prevents consumers from using a mechanic of their choice to service their vehicle and deprive independent repairers of work opportunities.

Committee comment

2.8 The committee thanks the Assistant Treasurer for this response. The committee notes the Assistant Treasurer's advice that the bill contains only one instance of an infringement notice with penalty units that are higher than those recommended by the Guide to Framing Commonwealth Offences. The Assistant Treasurer advised that mostly large multinational motor vehicle manufacturers would be subject to this penalty.

2.9 The committee also notes the Assistant Treasurer's advice that in order to prevent a potential avoidance mechanism, it is necessary to include proportionate penalties and infringement notices for individuals. The Assistant Treasurer advised that, consistent with the Guide to Framing Commonwealth Offences, the level of penalties and infringement notices applied to individuals is set at one-fifth of the corresponding amounts set for corporations.

2.10 The committee reiterates its concerns that the penalties imposed by proposed section 57GB differ in their treatment of persons who are not body corporates when compared with other comparable provisions, including within the Competition and Consumer Act 2010. Where a higher level of penalty units is imposed upon a natural person within the Competition and Consumer Act 2010, this is not done under an infringement notice scheme.

2.11 The committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of imposing a significant penalty (120 penalty units) via infringement notice under table item 4 of proposed section 57G upon persons who are not body corporates.

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[1] Schedule 1, item 1, proposed subsection 57DB(4), proposed paragraph 57DB(6)(e) and proposed subsection 57DB(7). The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(i) and (iv).

[2] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2021, pp. 10–12.

[3] Senate Scrutiny of Bills Committee, Scrutiny Digest 7 of 2021, pp. 13–14.

[4] Schedule 1, item 1, proposed section 57GB. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).

[5] Senate Scrutiny of Bills Committee, Scrutiny Digest 6 of 2021, pp. 12–14.

[6] Senate Scrutiny of Bills Committee, Scrutiny Digest 7 of 2021, pp. 14–16.

[7] The Assistant Treasurer responded to the committee's comments in a letter dated 27 May 2021. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 8 of 2021 available at: www.aph.gov.au/senate_scrutiny_digest.