ACCC chairman outlines priorities in enforcing competition law

5 May 2012

Australian Competition and Consumer Commission chairman Rod Sims has described the challenges of the digital and online economy as posing one of the biggest regulatory challenges of a generation.

Speaking to the 2012 Competition Law Conference in Sydney, Mr Sims detailed the priorities of the ACCC’s engagement with the online world.

“The ACCC must strive to ensure consumers enjoy the same protections in the digital and online economy as they do elsewhere,” Mr Sims said.

“The ACCC must also ensure that the digital and online economy produces the large benefits of increased competition that it promises,” Mr Sims said.

The Ticketek case, which concluded late last year, serves as a reminder to all businesses that illegal anti-competitive behaviour, of any type, will not be tolerated. The court imposed a penalty of $2.5 million against Ticketek, for taking advantage of its market power following action by the ACCC.

“Ticketek’s behaviour was anti-competitive and was found by the court to be unacceptable. The outcome of the case will benefit consumers who will have access to discount ticket deals that are increasingly accessible online.”

“Online technology is revolutionising competitive dynamics and promises enormous benefits. But attempts to capitalise on the uncertainties of that change – in order to damage the competition - is not an acceptable business strategy.”

Mr Sims also raised the issue of price signalling, which will be included in the Competition and Consumer Act 2010 from June 6. The new provisions will initially apply only to the banking sector, and only in relation to the taking of deposits and making advances or loans.

“Under the law taking effect in June, it will be unlawful for a banking firm to disclose prices to competitors in private where doing so is not in the ordinary course of business.”

“But the ACCC thinks that statements that genuinely describe market reality are unlikely to raise concerns of anti-competitive conduct.”

However, Mr Sims was quick to clarify what conduct would raise concerns with the ACCC.

“The ACCC’s attention would be attracted where a bank offers its support for a change in pricing strategy, effectively tipping that strategy to competitors and testing how they might respond, without committing itself to action.”

“Further, we would be concerned if an Australian banking executive announced that he or she would be reluctant to lift rates beyond that of the Reserve Bank cash rate or introduce new fees, but they would follow if other banks did so.”

“I think the banks will do everything they can to comply with these new laws. They have strong systems and cultures that support strict compliance with the law. But the ACCC will of course take action if we see unlawful conduct.”

The ACCC will provide further advice and support to the banking community in the coming months.

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NR 089/12
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