Laws to curb big firms may hit small ones

The West Australian, September 5, 2016:

New laws to curb market power abuse by big companies could have a “deep” and “pervasive” effect on Australia’s economy, the head of the competition watchdog says.

The Federal Government will today release draft changes to the Competition and Consumer Act, including a so-called “effects” provision recommended by the Harper Review last year.

Under the change, which has been welcomed by small business but angered larger firms, competitive conduct would be judged on the effect it has on the market rather than the intention of the business.

Australian Competition and Consumer Commission chairman Rod Sims said the existing law was insufficient, with small players trying to enter markets and discovering they were not able to do so.

He said the changes could have “quite profound” effects if companies with substantial market power had to think about whether they were seeking to outrun their competitors or exclude them.

“The sort of things we are talking about is buying up all the available land so the competitors can’t compete, restricting supplies of essential materials, predatory pricing, anti-competitive rebates,” Mr Sims said.

“I think (the changes) will probably give heart to a lot of small players trying to enter various markets.”

The Harper Review found that Australia’s existing misuse of market power law was not reliably enforceable and did not effectively target or deter anti- competitive conduct. The draft legislation is open for public consultation until September 30.