The Australian Competition and Consumer Commission (ACCC) has told media the practice of value banking may be of concern, but has refused to confirm or deny whether or not specific complaints had been lodged with the regulatory body.
In response to enquiries from The Australian, the ACCC said the practice may be of concern.
“Depending upon the circumstance, the size of the rebates and the manner in which they are secured may raise concerns under the unconscionable conduct provisions of the Competition and Consumer Act 2010,” a spokesperson said in response to questions posed by AdNews.
The concept of value banking, that is media agencies taking so called 'bonus inventory' in large group deals, has been a point of discussion in the industry for some time.
The fact the practice has been raised with the ACCC, whether formally or informally, is sure to raise some eyebrows.
“Where a business takes advantage of its superior bargaining position to use undue influence and unfair tactics to engage in transactions or dealings which are deliberate, involve serious misconduct or involve conduct which is clearly unfair and unreasonable, this may be considered unconscionable conduct,” the spokesperson said.
However, the spokesperson would not say whether specific allegations had been raised with the body on the issue, or elaborate on the process which would need to be followed for a formal investigation to be opened into the practice.
They instead pointed to the recent action against Coles, which led to a $10 million fine for unconscionable conduct.
In that case, the ACCC alleged that Coles supplier relations program was developed in 2011 to improve Coles’ earnings by the introduction of continuing rebates.
The court found that when suppliers refused to play ball, Coles threatened commercial consequences for the suppliers.
For more stories:
Why aren't brands spending more on main media? Coles and Woolies
Coles ordered to pay $10 million
Woolies under investigation for supplier allegations
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