ACCC Chairman discusses competition law and economics

23 October 2015

Australian Competition and Consumer Commission Chairman Rod Sims today delivered the opening address at the 13th Annual Competition Law and Economics Workshop in Adelaide.

This year the ACCC and the University of South Australia are co-hosting the two-day event for the first time. The workshop will bring together local and international experts to discuss the practical application of competition law and economics.

Introducing the workshop theme, Mr Sims discussed issues confronting the ACCC when applying Australia’s competition law, the importance of the Harper Review and the reality of increasing globalisation.

“There is a criticism that competition agencies, are either overly legalistic in the way they interpret the law, or overly theoretical in the way they apply the law,” Mr Sims said.

“An example arises with the emergence of many peer-to-peer business models, which the ACCC strongly welcomes. The ACCC is keen to ensure incumbent firms, with substantial market power, do not attempt to thwart new business models, and indeed, the potential for creative destruction.”

“Some have said we are adopting a theoretical approach, out of touch with the real world; we should simply stand back and observe.”

Citing the recent ihail draft decision, Mr Sims dismissed such claims. He said the ACCC is acutely aware of the profit maximising incentives and strategies of commercial firms, and that this approach is inherent in the ACCC’s competition assessments.

Mr Sims also spoke about the importance and challenges of making evidence based decisions, often in the face of speculative predictions of parties with vested interests.

In the second part of the speech, Mr Sims said the ACCC is very supportive of the vast majority of the Competition Review Panel’s findings, both as they relate to the Competition and Consumer Act and policy settings more broadly.

“The Harper Review’s recommendations on competition law showed a desire to both take a real world view, and a desire to bring our law into line with that applying overseas,” Mr Sims said.

“Harper’s recommendations on mergers and concerted practices illustrate this, as does the Panel’s recommendation on the misuse of market power.”

Mr Sims said other Harper recommendations do not get the focus they deserve.

“I believe Harper’s recommendations on collective bargaining, which could more readily allow collective boycott, can improve the bargaining power of small businesses and farmers in particular circumstances.”

“Another important recommendation, that does not get enough attention, is to ensure the CCA’s treatment of commercial activities by governments is consistent with those of private sector players.”

In the final part of his speech, Mr Sims discussed the reality of increasing globalisation and the response from competition agencies.

“Economic globalisation has resulted in an increasing number of reviews of mergers and investigations into cartels and unilateral conduct that transcend jurisdictional boundaries. This reality requires competition agencies, including the ACCC, to act cooperatively and collaborate,” Mr Sims said.

“Our engagement with other competition agencies has also helped us understand the significance of competition advocacy and impressed on us the value of market studies as a tool for analysing complex competition and consumer problems.”

“We are now more actively using the market studies tool with studies currently focussing on the Eastern Australian gas market as well as petrol markets in particular regional cities.”

Read the Chairman's speech

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