Application by Flexigroup Limited (No 2) [2020] ACompT 2

Application by Flexigroup Limited (No 2) [2020] ACompT 2

The NET Code, as submitted, would not likely result in net public benefit due to anti-competitive restrictions on unregulated consumer credit (including BNPL) and uncertain effects of mandatory standards, both likely producing substantial public detriment. Conditional authorisation is appropriate, requiring amendments that remove these provisions—specifically, deleting paragraph 3(d) (BNPL restriction in unsolicited sales), replacing paragraph 25 to permit BNPL where the credit provider's contract, policies, and procedures are approved for dispute resolution and hardship, and removing all references to mandatory standards, alongside strengthened consumer protection and reporting...

Parties
Applicant: Flexigroup Limited; Authorisation Applicants: Australian Energy Council, Clean Energy Council, Smart Energy Council and Energy Consumers Australia; Respondent: Australian Competition and Consumer Commission; Intervener: Australian Securities and Investments Commission; Intervener: RateSetter Australia RE Limited; Intervener: Consumer Action Law Centre
Jurisdiction
Australia
Judgment Date
15 September 2020
Procedural Posture
Competition Tribunal Determination (review of ACCC Authorisation) / Final Determination on Review
Outcome
Determination of the ACCC granting conditional authorisation varied; authorisation granted subject to Tribunal's conditions and amendments to the NET Code as specified in Annexure B.
Legal Topics
Industry Code Authorisations, Unregulated Consumer Credit, Buy Now Pay Later Finance, Solar and Energy Markets, Responsible Lending, Voluntary Codes of Conduct
Competition Law Consumer Protection Law Industry Code Authorisations Unregulated Consumer Credit Buy Now Pay Later Finance Solar and Energy Markets Responsible Lending Voluntary Codes of Conduct

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Parties

Flexigroup Limited

Applicant

Australian Energy Council, Clean Energy Council, Smart Energy Council and Energy Consumers Australia

Authorisation Applicants

Australian Competition and Consumer Commission

Respondent

Australian Securities and Investments Commission

Intervener

RateSetter Australia RE Limited

Intervener

Consumer Action Law Centre

Intervener

Procedural Posture

Competition Tribunal Determination (review of ACCC Authorisation) / Final Determination on Review

Legal Issues

  1. 1 Whether the NET Code, and its provisions restricting unregulated consumer credit (including BNPL finance), produces net public benefit under s 90(7)(b) Competition and Consumer Act 2010 (Cth)
  2. 2 Whether provisions regarding mandatory standards in the NET Code are anti-competitive or cause public detriment
  3. 3 Whether conditions should be imposed to amend or modify the NET Code to remove likely public detriment and to impose reporting requirements

Ratio Decidendi

The NET Code, as submitted, would not likely result in net public benefit due to anti-competitive restrictions on unregulated consumer credit (including BNPL) and uncertain effects of mandatory standards, both likely producing substantial public detriment. Conditional authorisation is appropriate, requiring amendments that remove these provisions—specifically, deleting paragraph 3(d) (BNPL restriction in unsolicited sales), replacing paragraph 25 to permit BNPL where the credit provider's contract, policies, and procedures are approved for dispute resolution and hardship, and removing all references to mandatory standards, alongside strengthened consumer protection and reporting...

Court Disposition

Determination of the ACCC granting conditional authorisation varied; authorisation granted subject to Tribunal's conditions and amendments to the NET Code as specified in Annexure B.

Orders

  • Authorisation applicants and future signatories may become signatories to, agree to comply with, and give effect to the NET Code, as amended by Tribunal's conditions.
  • Persons constituting the Administrator and Code Monitoring and Compliance Panel may perform functions and powers given under amended Code.