Enforcement criteria

The Commission uses enforcement criteria to assist it in its discretionary activities when making decisions on whether to open an investigation, and what enforcement action it will take at the end of an investigation.

The criteria are applied across the Commission's range of enforcement responsibilities and at each stage of its enforcement process.

The Commission must apply an administrative discretion over a wide range of matters including the strength of the Commission's case, the availability of funds, competing claims on those funds by other cases and assessments of the comparative importance of the various cases in which the Commission is involved.

The Commission gathers information from members of the public and industry, market and business specific monitoring. The Commission considers the available information for its relevance to the Commission's responsibilities and current work programme, the enforcement criteria and priority areas for new enforcement work.

The Commission decides whether to commence or continue enforcement action, the most appropriate type(s) of enforcement action and the most appropriate response in each case. To assist it in making these decisions, the Commission applies the following enforcement criteria:

  • extent of detriment;
  • seriousness of conduct;
  • public interest.

Extent of Detriment

Detriment is assessed by applying both quantitative and qualitative measures to determine the impact and consequences of the alleged contravention. The greater the likely level of detriment arising from the conduct in question, the more likely it is that the Commission will take or continue with enforcement action.

In assessing detriment, the Commission considers the following questions:
Are consumers or businesses likely to suffer and to what extent:

  • physical harm?
  • increased costs?
  • loss of property?
  • impaired choice?
  • Are the more vulnerable targeted by the behaviour?
  • Are a wide range of consumers or businesses likely to be affected?
  • Is competition in the relevant markets likely to be adversely affected?
  • Are excess profits likely to be gained?
  • Are emerging markets likely to be adversely affected?
  • Is the behaviour likely to have significant adverse national or regional impact?

Seriousness of Conduct

The more serious the conduct, the more likely it is that the Commission will begin or continue enforcement action.

In assessing the conduct, the Commission considers the following questions:

  • Is the conduct deliberate, reckless or very careless?
  • Is the conduct repeat or ongoing behaviour?
  • Is there a serious departure from expected lawful commercial behaviour?
  • Is the conduct/information difficult to detect by businesses or consumers?
  • Can the conduct be undone?
  • Is there likely to be a contravention of a per se provision?

In the Public Interest

The Commission must have regard to a number of factors in the wider public interest. In assessing public interest the Commission considers the following questions:

  • Is there likely to be widespread public interest in the issue?
  • Would a decision not to commence or continue enforcement action likely undermine public confidence in the law?
  • Is it more appropriate for the Commission, rather than another agency or an affected party, to address the issue?
  • Are there any mitigating or aggravating features involved?
  • Do the personal circumstances of the parties involved argue for or against enforcement action?
  • Is there a significant need to clarify the law?
    Is it necessary to reinforce the application of the legislation?
  • Are the issues timely?

The Commission considers the criteria together, weighing them against the available information and, standing back, deciding what action is required in the context of the Commission's overall activities. In applying the criteria, the Commission is also mindful of the changes it wishes to achieve from taking or continuing enforcement action in each matter.

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