Anti-competition laws need to be simplified as Australia’s economy comes under pressure from the rise of Asian economies, an ageing population and new technologies digitally disrupting the way we do business.
The Competition Policy Review Panel, formed by the Coalition government to conduct a root and branch investigation into Australia’s competition polices, today delivered its draft report.
Both the world and the Australian economy have changed significantly since the last review in the 1990s.
Among the panel’s recommendations is to replace the National Competition Council with a new body, the Australian Council for Competition Policy, an independent entity to be an advocate and educator in competition policy.
The ACCC (Australian Competition and Consumer Commission), which the panel says is a well-regarded and effective body, would retain its competition and consumer functions.
The panel also recommends changes to laws governing the misuse of market power to focus on protecting competition and not competitors.
The central element of “taking advantage of market power” is difficult to interpret and apply in practice.
“We recommend that the provision be reformulated so that it targets anti-competitive conduct that has the purpose, effect or likely effect of substantially lessening competition,” the panel says in its report recommendations.
The panel also recommends the cartel provisions be simplified.
The price signalling provisions should be removed and replaced by all practices which have the effect of substantially lessening competition.
And merger approval processes should be streamlined. “We recommend changes to other approval processes, both authorisation and notifications, in order to reduce costs for business, particularly small business,” the panel says
This report identifies three major forces affecting the Australian economy and influencing competition policies:
- The rise of Asia and other emerging economies provides significant opportunities for Australian businesses and consumers but also challenges. A heightened capacity for agility and innovation will be needed to match changing tastes and preferences in emerging economies with our capacity to deliver commodities, goods, services and capital. We need policies, laws and institutions which enable us to take full advantage of the opportunities offered.
- An ageing population will give rise to a wider array of needs and preferences among older Australians and their families. Extending competition in government provision of human services will help people meet their individual health and aged care needs by allowing them to choose among a diversity of providers.
- New technologies are digitally disrupting the way many markets operate, the way business is done and the way consumers engage with markets. The challenge for policy makers and regulators is to capture the benefits of digital disruption by ensuring that competition policies, laws and institutions do not unduly obstruct its impact yet still preserve traditional safeguards for consumers.
Professor Ian Harper, Chair of the Review, says Australia’s competition policy needs to be fit for purpose, and updated for the economic opportunities and challenges Australia will face in coming decades.
“We face forces for change from increased globalisation, population ageing and new technologies, which are rapidly changing the way our markets operate,” he says.
The panel’s assessment draws on nearly 350 submissions and close to 100 consultation meetings with stakeholders.
Consultation on the Draft Report is now open, and will run for eight weeks until November 17.
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