Former ACCC head calls on government not to target big business in competition review

The former Australian Competition and Consumer Commission chairman Graeme Samuel has called on the federal government not to target big businesses like the supermarkets in its review of competition laws, saying it’s not the best way to help small business.

In a new report published by the Monash Business Policy Forum think tank, Samuels and former ACCC commissioner Stephen King proposed 12 areas of competition law which the federal government should look at in a “root and branch” review of competition laws.

The upcoming federal government’s review of competition laws will be the first comprehensive examination in 10 years, and small business owners are keen to see the competition watchdog’s powers tightened against big businesses like Coles and Woolworths.

But Samuel and King say in the report that targeting big business is the wrong approach.

“Attempts to meet the needs of small business through policies that aim to harm the ability of large business to compete are wrong-headed and are not in the long-term interests of small business,” they say.

“The Review should consider how the laws prohibiting unconscionable conduct can best assist the legitimate interests of small business.”

In October, the ACCC delayed a decision regarding any legal action against the supermarket giants until 2014.

Samuel and King say the current unconscionable conduct laws have failed to meet the needs of small business and suggest the definition of unconscionable conduct needs to be redrafted.

The report identifies small business as one of the 12 key areas for review, and also suggests considering whether or not to extend parts of Australian Consumer Law, such as unfair contract provisions, to small business.

Other areas of focus include: Whether or not Australian competition laws are consistent with international best practice, a review of part IV of the act, exclude reviews of specific industries such as telecommunications, analyse the interaction between laws regulating competitive conduct and authorisation procedures and red tape creating barriers to competition.

It also recommends looking at how to promote competition policy reform, the timeline for advancing competition policy and urges the government to test its reforms against effects to labour mobility, movement of goods and services and barriers to entry and exit.

As part of a review of institutional structures, the pair is also calling for the ACCC to be split up, creating a new body which would deal with consumer responsibilities.

“The Review should consider whether the consumer law functions of the ACCC and ASIC should be jointly administered by a single separate body,” they say.

“It should also consider whether this body should take over the function and operations of the various state consumer protection agencies.”

Samuel and King also suggest creating an institutional ‘gatekeeper’ at a state and federal level to provide a “competitive check” on anti-competitive regulations and to carry out reviews on competition policy.

The functions of the competition regulator have increased in recent years and the regulator is now estimated to be running in the red by $25 million a year.

Federal Treasurer Joe Hockey said on ABC Radio last week the ACCC would run out of money by April next year.

“I’ve not only been told the ACCC has been running operational losses for the last four years, I’ve been advised that this financial year – because the previous government didn’t give it any money – the ACCC will run out of money in April,” he says.

“In a meeting with the ACCC they tell me…. they are under-funded for the next four years by $100 million.”