The Australian Competition and Consumer Commission (ACCC) has backed the Productivity Commission’s proposed idea of introducing a labelling scheme that could assist consumers in making more informed decisions about electronics they purchase in the future.
“Rather than broad, indicative, and non-binding durability guidance issued by a regulator, consumers, suppliers, and manufacturers would find far greater benefit from prominent labelling by manufacturers of minimum trouble-free lifespans,” the ACCC said in its submission [PDF].
“As manufacturers have detailed knowledge of the materials used and methods of construction they are far better placed to provide this information to consumers.”
The ACCC advised that if such an approach were to be taken, the label should not limit consumer guarantees. but rather apply as a further warranty alongside consumer law rights and include information clearly stating an expected period from purchase that the product should function without failing.
“If implemented appropriately, a manufacturer product labelling scheme will equip consumers to make better informed purchasing decisions and would be likely to drive greater inter-brand competition between products that do not normally compete on product durability,” the ACCC said.
The Productivity Commission previously suggested as part of its inquiry into right to repair that a labelling scheme could help consumers better understand the life of a potential product, after being unable to find any clear evidence that manufacturers deliberately design products to fail early.
“There might be merit in some labelling scheme to help consumers understand how easy it is for their product to be repaired and its durability,” Productivity Commissioner Paul Lindwall said last month.
Lindwall pointed out that such a labelling scheme exists in France and could work in Australia, particularly as the cost to replace a product is often less expensive than to repair.
“The labour-intensive nature of repair is such that the relative price of new electronics (produced in mass in a capital-intensive factory) has fallen rapidly in real terms while repair costs have grown with labour costs,” he said.
The consumer watchdog has, on the contrary, opposed the idea to introduce a “super complaints” mechanism for consumer groups, saying it would have a “profound impact” on ACCC’s existing resources and priorities. Rather, it insisted that its “ongoing processes” to address any “emerging” Australian Consumer Law issues was adequate.
“Dealing with a super-complaint … would force the ACCC to deprioritise existing projects and priorities to achieve the deadline imposed by a super complaints process,” it said.
“The ACCC’s current process allows the agency to identify and react to potential ACL and market issues identified by consumer groups, and gather evidence effectively, both from these organisations and from broader market intelligence. In this respect, we consider the proposed super-complaints process to be duplicative as the purported benefits are already been captured by existing mechanisms.”
A product labelling scheme specifically for smart devices is something that the Department of Home Affairs has considered introducing as part of its commitment under the Cyber Security Strategy 2020. It noted that labelling products to guarantee a minimum period of security updates could help consumers make more informed purchasing decisions relating to the cybersecurity of their products.
“Cybersecurity labels may help consumers make more informed purchasing decisions at the point of sale. The Government is seeking industry feedback on a graded label similar to energy efficiency ratings, an ‘expiry date label’ which would indicate the length of time a smart device is guaranteed security updates, or the status quo,” it wrote in its submission [PDF].
At the same time, the Department of Home Affairs said introducing cybersecurity standards for smart devices could be another potential option.
“As a complement or alternative to cybersecurity labelling, the government is considering mandatory standards for consumer-grade smart devices. The government is seeking feedback on applying some or all of the standard ESTI EN 303 645, which requires manufacturers to deploy security updates in a timely way,” it added.
The Department of Agriculture, Water and Environment has also thrown its support for a product labelling scheme to be introduced, but suggested that if it were to be introduced, the regulator costs and costs to industry in designing new schemes needed to be considered.
“Further consultation with industry might indicate that expanding existing, verified labelling schemes already established on the Australian market may provide an optimal approach,” the government department said in its submission [PDF].
“For example, consideration could be given to leveraging the ARL (Australasian Recycling Label), which is the only evidence-based, national recycling labelling program on the Australian market. APCO (Australian Packaging Covenant Organisation) administers the ARL Program and has the exclusive licence for the ARL in Australia and New Zealand.”
It further added that the Productivity Commission could consider other options beyond labelling to improve consumer knowledge about premature obsolescence of products. These could include use of label digitisation such as low-cost electronic tagging, and the development and publication of public databases or consumer awareness campaigns, which could also be utilised to inform consumers when making purchase decisions, the Department of Agriculture, Water and Environment said.