The ACCC's recent announcement that it has commenced proceedings against Australia's leading supermarkets has led to increased media scrutiny on the strategies businesses are adopting to price and market their products. While these are significant proceedings that will require the Court to consider pricing in the context of major and long running marketing campaigns, they are no more than a further step in the Australian regulator's relentless focus on pricing.

In this series – The price is right? – we will explore emerging trends in competition and consumer law regarding pricing related issues, in Australia and globally. We will look at the challenges and opportunities presented by advanced pricing models, the scope of existing regulatory frameworks, and how regulators are responding to meet these emerging issues.

An increased focus on pricing

In light of the cost of living crisis that consumers have faced in the wake of the COVID-19 pandemic, it is unsurprising that competition and consumer law regulators have sharpened their focus on pricing related issues. In announcing the ACCC's priorities for 2024-25, Chair Gina Cass-Gottlieb commented that the rising cost of living meant that consumers were even more vulnerable to the effects of anti-competitive conduct, and that misleading representations in relation to the price, features or benefits of goods or services causes greater harm at a time when disposable incomes are limited.

In that address in March 2024, Chair Cass-Gottleib signalled potential action against the supermarkets regarding their approach to pricing. However, the ACCC has not adopted a narrow or sector specific focus. Price-related representations, including how discounts and savings are presented, are a key target for the ACCC across all industries. The ACCC's most recent announcement builds on a series of recent investigations which have targeted:

• Non-compliance with sector-specific pricing obligations that are designed to enable consumers to compare prices.
• Misleading representations that overstate the discounts that consumers would receive.
• Marketing which misrepresents that a service is designed to help consumers receive the best or cheapest rate.
• Promotional offers which suggest that online consumers will receive a particular discount at checkout.

In Australia, we have also seen the corporate regulator, ASIC, focus on pricing-related issues. In 2021, ASIC called on general insurers to review their pricing practices, systems and controls to ensure consumers received the full benefit of the discounts they were promised. ASIC also commenced enforcement proceedings alleging misrepresentations in relation to pricing and discounting. At the time, ASIC signalled that remediation processes had been triggered across a number of businesses, resulting in over $815 million in remediation payments to more than 5.6 million consumers.

Emerging issues in pricing

Regulatory investigations and enforcement action continue to generally focus on conventional pricing issues under the Australian Consumer Law including:

• If product or pricing representations are made that are misleading or deceptive (or likely to mislead or deceive).
• If false or misleading representations have been made regarding the price of goods or services.
• If a 'part price' representation for goods or services has been made without also specifying the single, total price.

However, just as antitrust is evolving to deal with issues created by emerging technologies such as GenAI, consumer law will also need to adjust to grapple with increasingly complex pricing issues. Today, pricing is far more complex and extends well beyond physical price tags in bricks and mortar stores. Pricing can involve complex models that account for and adjust to various external factors such as time, demand levels, and potentially features of the customer. For example, the Competition and Markets Authority in the United Kingdom and the European Commission have both recently announced inquiries into dynamic pricing following the release of tickets for the Oasis Reunion Tour.

In 'The price is right?' series, we will explore emerging pricing issues on the regulatory horizon and what they mean for consumers and businesses. We will touch on the scope of the Australian Consumer Law as well as global developments, and map how consumer regimes and regulators are navigating the evolution of pricing and emerging pricing practices. The series will address complex and evolving issues under competition and consumer laws such as:

• Discounting strategies and complexities in presenting discounts to consumers.
• Surveillance or personalised pricing and what it means to talk about 'price'.
• Dynamic pricing models.
• Loyalty arrangements and preferential pricing.
• Emerging forms of cartel conduct and information exchange including the role of algorithms.
• Allegations of price gouging and emerging regulatory responses.

Pricing and compliance by design

Cost of living pressures have created a heightened risk environment where customers, consumer groups, regulators and policy makers are demanding that businesses are able to substantiate the pricing representations they make.

It is essential that businesses understand their pricing engine and their approach to pricing, the operation of discounting structures and, critically, the statements they are making to consumers about the prices they will pay. In the current environment, companies are carefully testing their pricing practices, and their marketing and compliance arrangements. This requires a holistic assessment of the approach to pricing including inputs into more complex pricing engines, as well vigilance in relation to marketing collateral to ensure it contains accurate and complete information about pricing.

In 'The price is right?' series we will explore a range of emerging trends in pricing practices and how regulators and regulatory regimes are responding to those changes. In the meantime, please contact MinterEllison's Competition and Consumer law team if there are aspects of your approach to pricing or your marketing that you would like to discuss.