The draft report states
Buying a new car is a significant purchase for a consumer. The purchase of a car and its ongoing maintenance account for around five per cent of total average household expenditure annually, typically making it second only to housing expenditure in importance. Well-informed consumers and competitive new car retailing markets are therefore likely to deliver considerable benefits.
Market studies are used by the Australian Competition and Consumer Commission (ACCC) to help promote effective competition in markets. Studies are normally undertaken where a number of concerns about market conduct have been raised, and a detailed examination of market characteristics could help to determine whether market intervention, including new policy proposals, regulatory solutions or enforcement action is warranted.
The ACCC’s market study into the new car retailing industry is in response to a number of concerns raised with the ACCC and other fair trading agencies about how new car retail markets are operating. The issues raised include those complaints received by the ACCC and other Australian Consumer Law (ACL) agencies about defects with vehicles, misrepresentations to consumers, and issues in post-sale service markets. This draft report considers these and other issues raised with the ACCC through the course of this study. It details the ACCC’s findings from almost 12 months of investigation, consultation and research. It contains a number of key findings and recommendations for improving consumer protection and promoting competition in new car retailing and associated markets....
New car retailing
New car retailing activities cover more than just the sale of new cars at a car dealership. They extend to:
- activities that occur prior to the sale, such as the advertising of new cars and representations made about car performance or emissions
- activities that occur at the time of the sale, including the sale of finance and insurance products, representations on standard manufacturer warranties, and the sale of additional warranties
- post-sale activities which are closely linked to the new car sale, such as regular maintenance and the cost of spare parts for the new car.
The sale of a new car also triggers consumer guarantees under the ACL which relate to post-sale activities. These statutory rights cover what consumers can expect from a good or service and the remedies available to them if something goes wrong.
The new car retailing supply chain
A number of entities are involved in the new car retailing supply chain, including:
- car manufacturers, usually large multi-national firms that produce cars, parts and tools, and distribute their products through new car dealers
- new car authorised dealers are usually in franchise agreements with car manufacturers to supply as well as repair and service new cars
- independent businesses that repair and service new cars, or produce or supply parts and tools.
New car retailing is a significant sector of the Australian economy:
- Around 1.1 million new cars were sold at more than 1500 new car dealers operating more than 3500 retail outlets in 2016. Car dealer revenues in 2016–17 are estimated at $64 billion.
- New car sales also have flow on effects for car servicing and repairs, crash repairs and replacement parts. Around 40 000 manufacturer-authorised and independent car repair and service businesses will earn revenues of around $18 billion in 2016–17 and close to 11 000 crash repair businesses are expected to earn revenues of $6.8 billion.
The ACCC’s key market observations
Analysis for this study has revealed a number of problems that are harming consumers and hindering effective competition in the new car retailing industry.
Three key observations arising from this study are: The law offers protections for consumers when purchasing new cars, but there are material deficiencies in the way that consumers are able to enforce their rights, and the way these rights are represented to them by manufacturers and dealers. The ACL provides protections to consumers through the consumer guarantees. Despite these protections, there are a number of systemic problems in the new car industry preventing consumers from obtaining the remedies to which they are entitled when their car experiences a problem. The biggest obstacle to consumers not receiving the remedies to which they are entitled under the ACL is the failure of manufacturers’ complaints handling systems and policies across the new car industry to adequately take consumer guarantees into account.
ACCC response: The ACCC will continue to address non-compliance with the ACL by manufacturers or dealers, including enforcement action where appropriate. The ACCC has recently instituted proceedings in the Federal Court against Ford, and has accepted a court enforceable undertaking from Holden in relation to its concerns about alleged ACL non- compliance issues. The ACCC will also work with other ACL regulators and the industry to publish guidance for consumers on their rights in the event there is a problem with their new car, including guidance for dealers to distribute to consumers at the point of sale. The ACCC also supports the legislative amendments to the ACL proposed in the ACL Review aimed at providing greater clarity and to address any uncertainties about the application of consumer guarantees. Concerns remain about the effect of limited access to information and data required to repair and service new cars. The repair and service of new cars is increasingly reliant on access to electronic information and data produced by car manufacturers. Independent repairers, which are not authorised or affiliated with car manufacturers, are reliant on car manufacturers voluntarily sharing information and data. Around one in ten new car buyers have their car repaired or serviced with an independent repairer. The ACCC is of the view that the competitive discipline imposed by independent repairers on the aftermarkets for the repair and servicing of new cars remains valuable and of benefit to consumers.
While voluntary commitments have been offered by car manufacturers to provide independent repairers with the same technical information to repair and service new cars that they provide to their dealers, problems with the breadth, depth and timeliness of the technical information offered appear to be enduring.
ACCC response: The ACCC considers that consumers benefit from competitive aftermarkets. As voluntary commitments to share technical information have not been successful in meeting their aims and there has been only a limited improvement in access, the ACCC recommends regulatory intervention to mandate the sharing of technical information with independent repairers on ‘commercially fair and reasonable terms’. Consumers are not receiving accurate information about the fuel consumption or emissions performance of new cars. Current fuel consumption and emissions testing procedures rely on laboratory testing rather than testing in real-world driving conditions. Manufacturers may therefore claim results for fuel consumption and emissions based on laboratory tests that are significantly better than can be achieved in real-world driving conditions. This is unlikely to meet consumer expectations and has the potential to be misleading.
Research from the Australian Automobile Association and consulting engineers, ABMARC, indicates that real-world fuel consumption is on average 25 per cent higher than official laboratory test results. The size of the gap between laboratory and real-world fuel consumption tests is not consistent across car types or brands, and has been increasing in recent years, casting doubt on the comparative value of fuel consumption figures currently displayed in fuel consumption labelling.
Consumer detriment may also occur when manufacturers fail to appropriately qualify fuel consumption claims. While the information supplied through mandatory fuel consumption labelling is primarily designed to help consumers make comparisons between different cars, the use of absolute values for fuel consumption and emissions may contribute to consumer misunderstanding.
ACCC response: The ACCC supports moves to enhance the quality of information supplied to consumers currently being considered by the Ministerial Forum into Vehicle Emissions, including the introduction of a more realistic laboratory test and real driving emissions testing. The ACCC has directed its analysis and recommendations towards addressing these three issues. A number of other issues are also addressed in the report, and the ACCC also seeks comment on these issues.
Key Findings and Recommendations
Chapter 2: New car retailing industry characteristics
Car manufacturers and authorised dealers are typically active in both the manufacture and supply of new cars and in the supply of aftermarket services, including car servicing, repairs and supply of parts and tools.
Manufacturers and authorised dealers generally earn higher profit margins from aftermarket services than from new car sales. For dealers, although parts sales and repair and service account for 15 per cent of revenue, these aftermarket services contribute to 49 per cent of gross profit.
A common pricing strategy for car manufacturers and authorised dealers is to discount new car prices to maximise sales of aftermarket services. This strategy reflects that consumers have more choices available at the time of the new car sale than they do in aftermarkets for repair, service and replacement parts after the sale.
Retail markets for the supply of new cars in Australia are generally competitive, primarily indicated by low market concentration of car brands and dealers.
Competition in markets for the supply of aftermarket services is less competitive as a result of factors including:
- the ability and incentives of car manufacturers and their dealers to impede competition in profitable aftermarkets by controlling access to necessary inputs such as the technical information needed to repair and service a new car
- consumer misunderstanding about warranty and servicing requirements (including the misconception that manufacturer warranties require new cars to be serviced at a dealership), and
- high costs of switching once consumers have purchased a particular brand and make of car.
Chapter 3: Consumer guarantees and warranties
The ACL provides statutory protections for consumers
The ACL is Australia’s national law for fair trading and consumer protection and plays a critical role in providing protections to consumers in their dealings with business and in the event that there is a problem with a good or service, including new cars. The consumer guarantees provided by the ACL cannot be displaced.
Manufacturer warranties provided with the purchase of a new car, and extended warranties offered by the dealer or a third party, provide additional protection to consumers in some circumstances.
Together, the ACL and state and territory legislation, along with manufacturers’ warranties, collectively provide consumers with an extensive suite of consumer rights to remedies or other forms of redress in the event that a new car is defective or fails to perform as promised.
The recent review of the ACL has proposed a number of amendments to enhance the law and provide greater clarity to address any uncertainties about the application of consumer guarantees. The proposed amendments include reforms aimed at assisting consumers understand and choose a remedy if things go wrong with a good or when a good, including a new car, has multiple and ongoing issues.
While the proposed ACL reforms would strengthen and provide greater clarity about the application of consumer guarantees, the existing law already provides remedies for faulty cars. This study has found that consumers are encountering difficulties enforcing consumer guarantees when problems occur with new cars. The ACCC views these issues as chiefly a compliance problem associated with manufacturers’ complaints handling systems failing to adequately take consumer guarantees into account.
Draft recommendation 3.1
The ACCC supports the amendments proposed by CAANZ in the recent ACL Review to enhance the ACL and address any uncertainties about the application of consumer guarantees. Of particular relevance to issues arising in this study, the ACCC supports proposals 1, 2 and 3 in the final report on the ACL Review:
Proposal 1: Where a good fails to meet the consumer guarantees within a short specified period of time, a consumer is entitled to a refund or replacement without needing to prove a ‘major failure’.
Proposal 2: Clarify that multiple non-major failures can amount to a major failure.
Proposal 3: Enhance disclosure in relation to extended warranties by requiring:
- agreements for extended warranties to be clear and in writing
- additional information in writing about what the ACL offers in comparison to the extended warranties
- a cooling-off period of ten working days (or an unlimited time if the supplier has not met their disclosure obligations) that must be disclosed and in writing.
Draft recommendations on proposed amendments to enhance the ACL
Consumers are not receiving balanced information about their rights
Consumers are not receiving adequate information about consumer guarantees at the point of sale of a new car. The information provided is generally very limited and is usually not provided in a form consumers can retain, and refer to later.
An oral explanation is not sufficient. Consumers need information in a form that can be referred to at any time during their ownership of their car. The ACCC considers that it is best practice for dealers to provide an explanation about consumer guarantees in writing.
A balanced provision of written information about consumer guarantees requires not only an explanation of the statutory rights available to consumers, but also an explanation of the statutory obligations of manufacturers and dealers. It also requires an explanation of the potentially complex interaction between consumer guarantees and other consumer rights available under warranty in the event of a problem with the car.
Most consumers have a reasonable level of awareness of their consumer rights when they purchase goods or services in Australia. There are a variety of sources of information for consumers seeking to improve their understanding of their rights with respect to the purchase of a new car.
This study has found that many consumers face difficulties in understanding the application of the consumer guarantees to their new car purchase and the distinction between consumer guarantees and warranties. Such difficulties impact the ability of consumers to accurately assess the value of any additional consumer protections offered by extended warranty products compared to the rights they already have under the consumer guarantees or the manufacturer warranty.
ACCC action on consumer understanding of their rights
ACCC action 3.1
The ACCC will work with manufacturers and dealers to develop a concise and simple explanation of consumer guarantees and their interaction with warranties, which should, as industry best practice, be provided to consumers at the point of sale of a new car.
This appears to be in part the result of a focus by dealers at the point of sale on the manufacturer’s warranty and the potential sale of an extended warranty. Dealers have commercial incentives, as the result of commission-based remuneration, to maximise their sales of extended warranties.
The majority of consumers take their new cars to manufacturer authorised dealers for repairs and service. This appears to be, in part, the result of a mistaken belief that the manufacturer’s warranty requires them to only use an authorised dealer.
Contributing to this misunderstanding are direct and implied representations made by a number of manufacturers in their logbooks and service manuals to the effect that authorised dealers must carry out services or repairs (or that original equipment (OE) parts must be used). Many of these representations are likely to contravene the provisions of the ACL, and may also raise competition concerns under the CCA.
ACCC action 3.2
To assist consumers better understand their rights when it comes to new car defects and failures, the ACCC will work with other ACL regulators to publish an updated version of Motor vehicle sales and repairs - an industry guide to the Australian Consumer Law (August 2013) to ensure that this publication addresses the issues identified in this study, including specific guidance on criteria for determining a ‘major failure’. Guidance may also be designed for use by businesses, including dealers, regarding their rights and obligations under the ACL.
ACCC action 3.3
Instances of misleading or deceptive conduct, or misrepresentations, in relation to the use of independent repairers or non-OE spare parts will be targeted through action by the ACCC, including enforcement action where appropriate.
ACCC action on consumer understanding of their rights
Consumers face significant obstacles to enforce their ACL rights
A significant body of evidence suggests systemic failures in the ability of consumers to enforce their consumer guarantee rights after the purchase of a new car. The ACCC has seen many examples of practices by manufacturers in dealing with consumer complaints that raise concerns under the ACL provisions, including the failure of manufacturers’ complaints handling systems to adequately take consumers’ ACL rights into account.
The ACCC has identified five key issues contributing to the difficulties experienced by consumers in enforcing their consumer guarantees:
- manufacturers’ focus on warranty obligations to the exclusion of their consumer guarantee obligations
- manufacturers’ responses to ‘major failures’
- the widespread use of non-disclosure agreements by manufacturers when resolving complaints
- the lack of effective independent dispute resolution options for consumers, and
- particular features of the commercial arrangements between manufacturers and dealers
Manufacturers’ complaint handling systems require dealers to check whether a car is under warranty before decisions are made as to an appropriate response to the customer’s complaint. This means interactions with the consumer take place within the manufacturer’s warranty framework to the exclusion of the consumer guarantees.
There is a dominant ‘culture of repair’ underpinning manufacturers’ systems and policies for dealing with car defects and failures, even where cars have known and systemic mechanical failures which would entitle a consumer to a replacement or refund under the consumer guarantees.
The widespread use of non-disclosure agreements when resolving consumer complaints suggests that consumers are not entitled to their consumer guarantee and warranty rights unless a non-disclosure agreement is signed when this is not the case. Non- disclosure agreements also substantially reduce information in the marketplace for new buyers about defects and safety issues that are common to a particular car.
Independent dispute resolution options are providing little incentive for manufacturers to improve their ACL compliance. These options do not effectively enable consumers to obtain the remedies they are entitled to under the consumer guarantees. This creates little incentive for a manufacturer or dealer to offer these remedies at an earlier stage in a dispute.
Given the nature of commercial relationships between dealers and manufacturers, dealers are frequently in the challenging position of balancing their ACL obligations to customers, safeguarding their own financial interests and maintaining a long term commercial relationship with their manufacturer. These commercial arrangements can have the effect of denying or making it difficult for consumers to readily access the remedies to which they are entitled.
ACCC action on the consumer experience of enforcing their rights
The ACCC has recently instituted proceedings in the Federal Court against Ford, and it has also accepted a court enforceable undertaking from Holden, in relation to its concerns about alleged ACL non-compliance issues.
ACCC action 3.4
Manufacturers’ complaints handling systems, policies and practices that do not comply with the consumer guarantee requirements of the ACL will continue to be targeted through action by the ACCC and fair trading agencies, including enforcement action where appropriate. Such action may also address any instances of non-compliance by dealers. The ACCC is particularly concerned about manufacturers and dealers engaging in conduct that may be misleading or unconscionable.
Chapter 4: Accessing technical information to repair and service new cars
Technical information for servicing and repairing new cars is not widely available
The nature of technical information to repair and service new cars is rapidly changing, with digital files and codes, and appropriate diagnostic tools, now often necessary to complete a car repair or service.
Independent repairers have continuing problems accessing technical information for new cars. Few car manufacturers provide equivalent access to the technical information provided to their authorised dealers and preferred repairer networks, and many provide very little or no information at all.
Independent repairers may be able to obtain technical information from sources other than the car manufacturer in Australia; however, the information is commonly incomplete, not applicable to Australian models, or offers no security of ongoing supply.
Car manufacturers may have legitimate concerns about the sharing of some security- related technical information to repair and service new cars. Regardless, in other jurisdictions this information and data is securely shared with independent repairers.
The ACCC has informed itself on these issues through consideration of a range of evidence including submissions from stakeholders, site visits and the reports of an automotive technical expert engaged by the ACCC to further examine the submitted claims of stakeholders, which found that access to technical information for independent repairers is inconsistent. Existing voluntary methods of information sharing are not effective
Key industry associations, including the FCAI, have voluntarily agreed to a set of aims and principles to ensure there is ‘a fair and reasonable competitive market within the car repair and service industry.’ The principles of the Heads of Agreement place voluntary obligations on car manufacturers to, in general, share with independent repairers, on ‘commercially fair and reasonable’ terms, the technical information they provide to their dealers.
Broadly, most car manufacturers in Australia are not fully sharing technical information consistently with the aims and principles of the Heads of Agreement.
The Heads of Agreement has several shortcomings which hinder its aims and principles of improving access to technical information from being achieved in a fair and efficient way.
The ACCC has concluded that the net effect of the Heads of Agreement, across the industry, in improving access to technical information for new cars has been limited, and that the Heads of Agreement is ineffective in providing access that is consistent with its stated aims and principles.
Effective information sharing would enhance competition and improve consumer outcomes
As discussed in chapter 2, car manufacturers have an incentive to limit access by independent repairers to technical information to steer service work to authorised dealers and repair work to preferred repairer networks.
This is impacting the ability of independent repairers to effectively and efficiently compete in the aftermarkets for the repair and servicing of new cars.
It is also causing detriment to consumers in the form of increased costs, inconvenience and delays when having their new car repaired or serviced.
Consumer switching in the new car market is unlikely to provide strong competitive discipline on manufacturers and dealers in aftermarkets, and any benefit of competition in the sale of new cars to consumers does not offset the impact of less competitive aftermarkets. The ACCC’s view is that consumers benefit from competitive aftermarkets for the repair and servicing of new cars. Developments in other jurisdictions offer pathways for reforms in Australia
In foreign jurisdictions, regulatory interventions have made the technical information necessary for independent repairers to repair and service new cars more widely available.
EU regulations requiring independent repairers to have ‘easy, restriction-free and standardised access’ to information and data to repair and service new cars have generally been successful in meeting those aims. In the US recent state legislation has stimulated further voluntary national changes to improve access.
The EU and the US models are specific to their regulatory environments and geographically distinct markets. Elements of these models, such as secure processes to access security-related information and access to technical information by intermediaries to develop informational products and diagnostic tools, should be considered in Australia. However, outright adoption of other models may not be appropriate.
Draft recommendation 4.1
A mandatory scheme should be introduced for car manufacturers to share with independent repairers technical information, on commercially fair and reasonable terms. The mandatory scheme should provide independent repairers with access to the same technical information which car manufacturers make available to their authorised dealers and preferred repairer networks. The mandatory scheme should place an obligation on car manufacturers and other industry participants to achieve the aims and principles set out in the Heads of Agreement (including those in relation to training and reinforcing existing statutory obligations on independent repairers to ensure repairs and servicing are carried out correctly to car manufacturers’ specifications to assure the safety of consumers). The mandatory scheme should, subject to the type of regulation used, address the following operational matters:
Real time access
Car manufacturers should make available to independent repairers, in real time, the same digital files and codes, such as software updates and reinitialisation codes, made available to dealers to repair or service new cars.
Coverage
Obligations on sharing technical information should apply to all car manufacturers in Australia.
Consideration should be given to including options for relevant intermediaries to access technical information from car manufacturers on commercially fair and reasonable terms.
Definitions
All relevant terms, conditions and exclusions should be defined in the regulation, for instance, defining diagnostic tools and their relevance to facilitating access to technical information, as well as defining security-related information.
Dispute resolution
Any dispute resolution processes should be timely and accessible by all relevant stakeholders.
Any dispute resolution processes should be subject to compulsory mediation and binding arbitration by an independent external party.
Governance/consultation
Key stakeholders should meet regularly to discuss the rapidly changing nature of repair and service information. Security-related information and data
Similar to the EU or US models, a process for the secure release of security-related technical information should be established or authorised under the mandatory scheme.
Enforcement
Appropriate options to enforce the terms of any regulation, if appropriate, should be included (e.g. penalties).
Draft recommendations on access to technical information for new cars
Chapter 5: Parts needed to repair and service new cars
Access to parts is sometimes restricted
Car manufacturers and dealers sometimes restrict access to certain parts for legitimate reasons that may benefit consumers. This includes parts which can compromise vehicle security and encourage theft. However, a further motive for restricting access may be to steer more repair and service work back to authorised dealers and preferred repairer networks. This can reduce competition for servicing or repair work and raise prices.
The lack of transparency and consistency across manufacturers about what are security- related parts means that access restrictions can be arbitrary, increasing uncertainty and cost for independent repairers. It could also undermine the intent of reforms to promote access to technical information needed to repair and service cars.
Draft recommendation 5.1
OE manufacturer-branded parts and accessories should be generally available to independent repairers on commercially fair and reasonable terms. Car manufacturers should develop policies which clearly outline any parts subject to restricted access on security-related grounds. These policies should be publicly available. The FCAI is well-placed to work with manufacturers to examine whether there is benefit in agreeing a standard definition and detailed classification system for ‘security-related’ parts to provide certainty to parts customers.
ACCC action 5.1
Refusals by car manufacturers to supply security-related parts for repair and service will be monitored and addressed through action by the ACCC, including enforcement action where appropriate.
Draft recommendations and actions on parts
High margins are earned on supply of spare parts
Anecdotal evidence and submissions to this study suggest that parts prices in Australia are rising relative to the cost of new cars, and that Australia has high parts prices relative to some overseas jurisdictions.
Detriments from high parts prices could include distortions in decisions about repairing cars; for example, high parts prices might cause cars to be ‘written off’ when it may be more efficient to repair them.
There is limited competition to supply certain spare parts for repair and service. In addition, consumers have a limited ability to switch to alternative suppliers of parts in many instances and these factors may lead to high prices.
However, parts prices should be considered within a broader context of supply of new cars and other aftermarket services. Manufacturers and dealers discount prices of new cars to capture a greater share of parts sales, which attract much higher margins.
Request for further information
The ACCC seeks further information on the issue of transparency in parts prices, and whether the withdrawal of retail price lists by some or all manufacturers would harm competition or increase costs in parts markets.
Chapter 6: Fuel consumption, emissions and the ACL
Consumers are not well informed about fuel consumption and emissions tests
Fuel consumption is a significant factor for consumers when buying a car, second only to price and model. The environmental impact of new cars is also important to one in five consumers. For this reason, new car buyers need to be able to rely on the accuracy of claims made by manufacturers and dealers about the fuel consumption and emissions of particular car models.
Representations to consumers about fuel consumption and emissions are made by manufacturers and dealers in a variety of ways. While they have no discretion about displaying mandatory labels, they do control claims made in promotional and advertising materials or at the point of sale. ACCC research for this study indicates that manufacturers are not always appropriately qualifying these claims, and that many consumers believe that advertised fuel consumption and emissions figures are likely to be attained in real-world driving conditions, when this is not the case.
In addition, some consumers may not understand that fuel consumption and emissions values are intended for comparative purposes only. Even when representations are qualified, these consumers may still believe that the advertised figures will be attained.
Request for further information
The ACCC welcomes views on whether general consumer education or awareness initiatives about how fuel consumption and CO2 emissions are measured (and what factors influence them) should be considered.
Draft recommendations on fuel consumption and CO2 emissions claims
Draft recommendation 6.1
Changes to the fuel consumption label affixed to new cars should be considered to improve the comparative use of the information supplied. Introducing a star-rating system or annual operating costs may minimise the extent to which consumers interpret an ‘absolute’ fuel consumption/emissions value as equivalent to what they would achieve in real-world driving conditions.
There are material discrepancies between fuel consumption and emissions test and real-world results
Current fuel consumption and emissions testing procedures rely on laboratory testing rather than testing in real-world driving conditions. Manufacturers may therefore claim results for fuel consumption and emissions based on laboratory tests that are significantly better than can be achieved in real-world driving conditions. This is unlikely to meet consumer expectations and has the potential to be misleading.
Research from the Australian Automobile Association and consulting engineers, ABMARC, indicates that real-world fuel consumption is on average 25 per cent higher than official laboratory test results. The gap between laboratory and real-world fuel consumption tests is not consistent across car types or brands, and has been increasing in recent years. This casts significant doubt on the comparative value of absolute fuel consumption figures currently displayed in fuel consumption labelling.
The Australian Government is currently reviewing possible new measures to address vehicle emissions under the Ministerial Forum on Vehicle Emissions. The Forum is considering a number of measures to improve the integrity of vehicle emissions testing, including the introduction of a more realistic laboratory test for fuel consumption and emissions, and for vehicle emissions, on road testing.
Draft recommendations on the fuel consumption and emissions discrepancy
Draft recommendation 6.2
The ACCC supports measures to enhance the quality of information supplied to consumers currently being considered by the Ministerial Forum into Vehicle Emissions, including the replacement of the current fuel consumption and emissions testing regime with the new Worldwide Harmonised Light Vehicles Test Procedure, a more realistic laboratory test, and the introduction of an on-road ‘real driving emissions’ test.
Chapter 7: Other issues
This study considered a number of additional issues, including telematics in cars, car performance and representations about the advertised year of a new car.
Draft findings on telematics
The impact of telematics on competition and consumers is likely to become more acute as telematics technology becomes more prevalent. The ACCC will continue to monitor emerging issues in this area.
The voluntary Heads of Agreement and codes of practice governing information-sharing in relation to technical information provides a process, as yet unused, for the signatories to discuss issues associated with access and ownership of data generated by telematics technology.
Draft recommendation on telematics
Draft recommendation 7.1
The ACCC supports the Productivity Commission’s recommendations in its final report on Data Availability and Use for a comprehensive right for consumers to access digitally held data about themselves, including to direct data custodians to copy that data to a nominated third party which may address some of the concerns that were raised about the impacts of telematics technology on new car purchasers.
Draft findings on car performance
Submissions to this study have pointed to a few examples of misleading claims in relation to car performance. However, submissions have not provided evidence that this issue is systemic.
The current laws prohibiting false, misleading and deceptive conduct under the ACL provide adequate consumer protection in relation to this issue.
Draft findings on the advertised year of a new car
Submissions to this study have provided limited evidence of systemic misleading behaviour by manufacturers or dealers in relation to the advertised year of new cars. The current laws prohibiting false, misleading and deceptive conduct under the ACL provide adequate consumer protection in relation to this issue.
