ACCC Response to Harper Review
Monday 13 October 2014 @ 11.16 a.m. | Trade & Commerce
On the 10 October 2014, the Australian and Consumer Commission provided some initial comments in response to the draft report of the Harper Competition Review. ACCC Chairman Rod Sims supported the panel’s focus on both opening as many sectors as possible up to the disciplines of competition; and getting the settings of competition law right.
Draft Report
The draft report released recently recommended the removal of regulatory restrictions that hinder competition. It put forward recommendations that local, state and Federal governments should promote competition within its legislative framework. In particular, it recommended that at the core of the framework should be an emphasis on consumer choice as the key element in providing goods and services.
The panel arrived at this conclusion based on its analysis of the economic forces currently affecting Australia’s economy and its competition environment. The three economic forces at play are:
- The rise of Asia and other emerging economies;
- Australia’s aging population; and
- The emergence of new technologies.
Policy concerns in particular have been framed with these issues in mind.
ACCC Reaction
Mr Sims has given support to the panel’s recommendation explaining:
“The Harper Panel’s draft report identifies a considerable amount of micro economic reform...pleasingly, the panel has given the core elements of Australia’s merger laws a stamp of approval.”
The recommendation regarding ‘concerted practices’ also responds to the ACCC’s longstanding concerns that there is a gap in the law relating to collusive or coordinated behaviour between firms that should be competing vigorously.
Another important recommendation involves section 46, the misuse of market power provision. Mr Sims said:
“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...Clearly, given the ACCC’s submissions on this issue, this is an approach we welcome."
However, the Chairman did express concern at the panel’s recommendation to split the ACCC into two bodies. Mr Sims said:
“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…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. We will be discussing further with the panel exactly what problems they are seeking to solve with this split.”
Impact of Review on other Services
Areas that have been prioritised by the panel for reform include:
- Human services;
- Transport;
- Intellectual property;
- Imports;
- Planning and zoning;
- Energy and resources; and
- A myriad of other areas.
The panel’s overall recommendation seems to be an unwavering insistence on the “presumption of choice”. The thought behind this is that consumer choice creates diversity and innovation in delivery of services. In areas such as health services, the panel acknowledged the current trend in this area which has focused on providing consumer choice and encouraging innovation. This has been particularly evident in the aged care and disability care areas.
The panel’s take on intellectual property law focuses instead on the idea of deregulation. The panel recognises that some IP rights have a negative effect on competition and lead to decreased choice and increased prices for consumers. The panel recommended a large scale independent review of intellectual property in Australia with a focus on competition law policy issues in relation to developing technologies and markets. Furthermore, to ensure that IP rights do not hinder competition, the panel has agreed with the ACCC submission and recommended the removal of the IP licensing exemption found in s 51(3) of the Competition and Consumer Act 2010 (Cth).
Criticism of Draft Report Recommendations
Senior Lecturer at the University of Sydney, Damien Cahill, criticises the report for elevating consumer choice above all other public policy considerations. He argues that, by doing so, the result could have far-reaching implications on the way the Australian governments provide its public services:
“The review does not view access to high-quality public services as a right of citizenship. Rather, it wants to ration social services through the market, where access is determined by an individual’s ability to pay."
Cahill identifies that the element of the “public” is completely absent from the draft report.
“In its place is the ideology of individual choice. Public provision is relegated to a residual category - a safety net available for those who fall out of the market system."
TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.
