ACCC concerned about Competition Review’s recommendations to weaken ACCC

Posted by AFN Staff Writers on 13th October 2014
ACCC concerned about Competition Review's recommendations to weaken ACCC
ACCC concerned about Competition Review’s recommendations to weaken ACCC

The Australian Competition and Consumer Commission (ACCC) has provided some initial comments in response to the draft report of the Harper Competition Review, expressing concerns about the proposal to split the ACCC into two bodies.

ACCC Chairman Rod Sims raised the concerns during a speech at the recent University of South Australia’s Annual Competition and Consumer Workshop.

“The Harper Panel recommends a separate access and pricing regulator that would, in essence, undertake the roles currently performed by the AER, as well as the ACCC’s functions in relation to telecommunications access, transport and water,” Mr Sims said.

“The panel sees benefit in both our current competition and consumer work, and our energy and infrastructure work, having their own separate focus and culture,” Mr Sims said. “We will be discussing further with the panel exactly what problems they are seeking to solve with this split,” he said.

Mr Sims said the recommendation raised questions about the benefits of having narrowly focussed decision makers, dealing with overlap, as well as the loss of the current synergies and scale economies.

Response to recommendations of ACCC decision-making structure

The Chairman also discussed a recommendation by the Harper Review Panel to change the ACCC’s decision-making structure.

“The panel floats two ideas for the ACCC gaining a wider range of business, consumer and academic viewpoints, in addition to that provided by the current seven Commissioners who are themselves from very different backgrounds,” Mr Sims said.

“One idea is for an Advisory Board, either in addition to or to replace our many current advisory structures,” Mr Sims said. “The second idea is to replace the current Commission with a Board comprising executive members and non-executive members with business, consumer and academic expertise,” he said.

In discussing comparisons with the Reserve Bank of Australia Board, Mr Sims said several questions arise.

“To participate in the ACCC’s decision making processes non-executives would need to be involved on a weekly basis and quite heavily; is this intended? If not, which decisions will they be involved in and which not, and why?” Mr Sims said.

Other questions arising include how conflicts of interest would be managed, according to Mr Sims. Mr Sims said the ACCC intends to make detailed submission in response to the Draft Report.

ACCC supports focus on ‘getting competition law right’

However, Mr Sims said he supported the Panel’s focus on both opening as many sectors as possible up to the disciplines of competition, and getting the settings of the competition law right.

“The Harper Panel’s draft report identifies a considerable amount of micro economic reform,” Mr Sims said.

In relation to the Competition and Consumer Act, Mr Sims noted that “pleasingly, the panel has given the core elements of Australia’s merger laws a stamp of approval.”

Australian Food News reported in September 2014 that the comprehensive review of Australia’s competition laws and policies had been welcomed by industry bodies as ‘the most significant’ review in this area in two decades.

Mr Sims said the recommendation regarding ‘concerted practices’ also responded to the ACCC’s longstanding concerns that there was a gap in the law relating to collusive or coordinated behaviour between firms that should be competing vigorously.

Another important, according to Mr Sims, recommendation involves section 46, the misuse of market power provision.

“The Harper Review’s recommendations seek to make this section workable and more focused on the competitive process, rather than the protection of individual competitors,” Mr Sims said. “Clearly, given the ACCC’s submissions on this issue, this is an approach we welcome,” he said.