ACCC Chairman says better media and intellectual property regulations can boost innovation

5 November 2015

Australian Competition and Consumer Commission Chairman Rod Sims today provided insights on media laws, intellectual property and recent ACCC competition activities at the RBB Economics Conference in Sydney.

Mr Sims focussed on the current innovation debate.

“As someone with a long interest in this debate, I hope most focus will be on the “three Rs” of innovation: appropriate tax, industrial relations and competition policies,” Mr Sims said.

“Improving our tax, IR and competition policies will make the biggest contribution to promoting innovation in Australia.”

In Australia currently the main vehicle for improved competition policy is the Harper Review.

“Very little has been said, however, on two areas of Harper focus that can boost innovation. One is the need for all governments to review regulations to remove unnecessary restrictions on competition, and the other is in relation to intellectual property.”

“Under the first heading, I think our media laws would be an excellent place to start. Flowing from our analysis of the media market in our assessment of the Foxtel/Network Ten transactions, the ACCC is well placed to have views on these issues,” Mr Sims said.

“The 2 out of 3 media ownership rules may be preventing efficient delivery of content over multiple platforms and should be reviewed to see if they are still relevant for the preservation of diversity.”

“Surely laws that restrict acquisitions need clear justification. Changing technology may have made the initial justification for the 2 out of 3 rule, from 30 years ago, redundant.”

“The 75 per cent reach rule has been undermined by the ability of commercial free-to-air television to stream their content nationally via the internet,” Mr Sims said.

“Both the 2 out of 3 rule and the 75 per cent reach rule were introduced before the emergence of the internet.”

Mr Sims said some form of anti-siphoning regime continues to be required.

“The concern is that, without the anti-siphoning regime, Foxtel could acquire exclusively all premium sport and reduce competition in the television viewing market.”

“If the trend of streaming live sport is replicated in Australia, particularly via paid subscription models, the anti-siphoning regime may need revisiting, but we are not there yet.”

Mr Sims said intellectual property goes to the heart of innovation.

“The ACCC strongly supports the Harper panel’s recommendations in relation to IP, and the government’s early response in launching a more in-depth review by the Productivity Commission.”

“One issue the Productivity Commission may look at is whether intellectual property should be outside the scope of the national access regime in Part IIIA of the CCA.”

He said the ACCC agrees with the recommendation to remove a complex exemption of certain IP-related activities set out in section 51(3) of the Act.

As part of the wide-ranging speech, Mr Sims said the ACCC is dealing with a huge array of competition issues.

“We are pleased to have achieved some recent notable successes. This includes resolution of the Cabcharge, Visa and Little Company of Mary matters.”

In the area of mergers, Mr Sims said the ACCC has experienced an increase in the number and complexity of merger reviews.

“An unusually high proportion of these are cross-border mergers with high transaction values which appear to be fuelled by pre GFC levels of liquidity and business confidence.”

“This has meant it has been a busy time for merger regulators all over the world…the number of reviews in which the ACCC has released a Statement of Issues is at an all-time high,” Mr Sims said.

Read the Chairman's speech

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