The review of the competition provisions of the Trade Practices Act 1974 was a major opportunity for everyone to air their views on the Act and to have them assessed by an independent committee, Australian Competition and Consumer Commission Chairman, Professor Allan Fels, said today.
"The review provides a major opportunity for Australian law to come into line with best practices internationally", Professor Fels said today. "More and more, Australian companies are looking to international trade for growth; it's only right that they work under similar law in their home country as that of overseas.
"To a degree the Act contains compromises that were made with big business in an earlier era when governments were feeling their way and when the political muscle of big business was greater.
"The Act's limitations particularly impact on consumers, including small business. The ACCC will be looking to the review for changes that will assist this important area of the economy.
"The ACCC has already flagged that the Government may have to look to introducing jail sentences for hard-core, high-level collusion. Last week's penalties in the transformers case* show that the Court is prepared to punish not only companies, but also directors, involved in collusion and price-fixing.
"Financial penalties are not enough. The behaviour in the transformers cases from 1993-1999 seems to have been completely unaffected by the publicity about penalties of $21 million on building companies around 1995 and of $15 million on freight express companies around 1993.
"In the United States, Canada and Britain, for example, collusive behaviour would carry a very great risk of a jail sentence for the directors who went along with the cartel.
"The mis-use of market power by big companies against smaller rivals is another area the ACCC believes should be a focus of the Review, with a view to strengthening the law to better protect competition.
The ACCC believes this can be done best through the introduction of an 'effect' test – i.e. whether the mis-use of market power had the effect of harming competition to complement the current test that the company concerned had an anti-competitive 'purpose'.
"The ACCC is confident that safeguards can be written into the Act that ensure genuine, pro-competitive behaviour would not be caught by such a change.
"The ACCC looks forward to working with the Review to enhance the workings of the Trade Practices Act and through it, the Australian economy".
*Federal Court Orders $14.5 Million Penalties Against Cartel Participants, and Orders Major Penalties For Managing Directors