Business to lament competition law changes

The Australian, March 23, 2017

Big business won’t be impressed by government changes to competition laws which remove planned guidance to the courts in implementing new abuse of market power provisions.

The government will introduce proposed amendments to section 46 which will ban conduct by companies with substantial market power with “the purpose or effect of substantially lessening competition”.

Business opposed the change, which removes the words “take advantage” from the existing provision and introduces an effects test to the abuse of market power provision.

The Business Council of Australia, led by Wesfarmers, campaigned hard against the changes.

The government’s draft bill, as recommended by Ian Harper and backed by big business, included an explanatory section which cleared behaviour which “enhances efficiency, innovation, product quality or price competitiveness”.

The Australian Competition and Consumer Commission campaigned for the removal of the explanatory section, arguing it complicated the law and Treasurer Scott Morrison has said the provision would create a “lawyers picnic.”

Mr Morrison’s chief of staff Phil Gaetjen, a former head of the NSW Treasury, used to work with ACCC chief Rod Sims in the Department of Prime Minister and Cabinet in a micro economic unit along with Productivity Commission chief Peter Harris.

The ACCC plans to release an explanatory booklet on the new provision.

One lawyer said “the explanatory provision was designed to protect consumers who benefit from innovation.”

“Given the ACCC’s poor track record in ‘substantially lessening competition’ cases it is clear it does not have a good understanding of just what substantially lessening competition really means.” the lawyer, who declined to be named, added.

He said “the ACCC wants to run cases based on concept because it is not very good at leading with facts, which was what the explanatory provision was meant to introduce.”