ACCC responds to competition review

clipboard, paper, paperworkThe Australian Competition and Consumer Commission (ACCC) has provided its submission in response to the draft report of the Competition Policy Review.

“The Review Panel’s draft report sets out principles and recommendations which, if adopted, could significantly enhance economic productivity over the decades ahead,” ACCC chairman, Rod Sims, said.

“The ACCC supports most of the Review Panel’s priority areas for reform to competition policy and in particular supports the Draft Report’s findings on roads, shipping, intellectual property, parallel imports, planning and zoning, electricity and gas.”

The ACCC supports the majority of the Review Panel’s recommendations on the operation of the Competition and Consumer Act 2010 (Cth) and considers that many of the proposed amendments are suitable for direct implementation.

“However, the ACCC strongly considers that it would be inappropriate to confuse specific policy issues with a focused simplification agenda. These should be quite separate exercises; the specific policy changes to competition law can be done initially, followed by a more focused simplification exercise,”  Sims said.

The ACCC submission expresses significant reservations regarding the specific changes to the cartel prohibitions suggested by the Review Panel.

The ACCC’s concerns relate to the direct changes suggested to the cartel provisions, as well as separate amendments to section 47 proposed by the Review Panel.

“Such changes would significantly weaken Australia’s cartel laws. While the ACCC supports simplification, any amendments should not fundamentally alter the existing scope of the prohibitions.”

The ACCC also does not support the recommendation to separate infrastructure regulation from competition and consumer enforcement.

“The ACCC disagrees with the inference that because some different skills are required for different tasks, it follows that they should be undertaken by separate agencies. To the contrary, provided the overarching agency objectives are consistent, having a diversity of capabilities means a single agency is likely to be more effective in fulfilling such objectives,” Sims said.

“A key feature of both competition law enforcement and economic regulation is a promotion of competition for the benefit of consumers. That is, these are essentially complementary functions, a point the OECD has recognised.”

“By separating out the access and pricing regulation functions from competition and consumer enforcement, the existing synergies between these functions would be lost, resulting in considerable costs for both businesses and the Government. However, the Panel has not made the case that there would be any particular benefits,” Sims said.

The ACCC submission also highlights that, with the ACCC already subject to many forms of scrutiny and accountability, the current ACCC structure is a more appropriate governance model than the board model proposed by the Review Panel.

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