Australia must do all it can to align the interests of business and society through sound laws that address some of the more damaging consequences of market power, ACCC Chair Rod Sims said today.
Speaking at the National Press Club in Canberra on ‘Tackling Market Power in the Covid-19 Era’, Mr Sims said it was crucial for Australia to tackle the issue of market power as it sought to recover economically from the pandemic and deal with the implications of an ever-growing digital economy.
“A strong recovery will depend on a competitive economy so we want the innovation, efficiency and restructuring our economy needs, without the damaging consequences from market power being leveraged to the detriment of competition and consumers,” Mr Sims said.
“The issue comes down to whether we want an economy benefitting consumers and allowing small business to thrive, or one that allows the strong to grow stronger by whatever means.”
Mr Sims said more could be done with consumer law and regulation to deal with the most damaging consequences of market power. This included making unfair contract terms illegal.
A law against unfair practices was also needed.
“In my view there is no place for unfair contract terms. And there is no place for unfairness that sees significant detriment from highly questionable business practices,” Mr Sims said.
To emphasise the importance of these issues for small business, Mr Sims said the Australian Consumer Law should be renamed the Australian Consumer and Fair Trading Law.
There were also gaps in the law with little or no regulatory restraint on the market power of some infrastructure, for example monopoly privately-owned ports.
“The ports were sold, usually with no control over their pricing, in order to maximise the proceeds of sale,” Mr Sims said.
Mr Sims said the digital economy has seen significant accumulations of market power in some cases, and may require new regulation.
“While we have all benefitted from the innovations of the main digital platforms, we must ensure their market power doesn’t stifle the future innovation of others,” Mr Sims said.
“We all benefit greatly from a market economy, and companies pursuing maximum profit can deliver significant benefits to society, but we must keep asking whether our market economy favours the producers too much at the expense of the consumers,” Mr Sims said.