Submission: Competition Policy Review Issues Paper

Consumer Action has made a submission on the Competition Policy Review Issues Paper.

The key points and recommendations are outlined below:

  • While effective competition generally ensures market outcomes that benefit consumers, competition is not an end in itself. Competition is only desirable to the extent that it creates benefits for consumers or improves Australia’s wellbeing.
  • There are a number of markets in which competition is not, and may not ever, improve consumer wellbeing. In these markets, we are better off using tools other than competition to improve consumer outcomes.
  • The National Competition Policy framework should focus not only on the supply side but also on how the demand side can drive competition. Some options might include:
    • funding consumer advocacy and dispute resolution mechanisms to identify competition issues, including a super-complaints process;
    • empowering consumers to participate in markets, for example, by making their purchase data available to them;
    • developing intermediaries or technological innovations which assist consumers to make informed choices or maximise their market power.
  • Competition policy should serve not just the majority of Australians, but all Australians. This is particularly important in key markets like utilities, banking and insurance. The panel should consider how competition policy can not only grow the economy but improve outcomes for the most disadvantaged and vulnerable Australians.
  • Consumer protection must be a core consideration in any plans to open up new markets to competition in areas traditionally dominated by governments.
  • Regarding impediments to competition, we have suggested:
    • the Regulatory Impact Assessment process could be improved to ensure regulation facilitates consumer empowerment and effective competition;
    • a ‘market study’ regulatory power could identify and respond to impediments to competition; and
    • minimum standards relating to health, safety and environmental protection will not necessarily create an impediment to competition.
  • Regarding the Competition and Consumer Act (CCA), we believe the panel should:
    • consider reform to the misuse of market power provisions in section 46;
    • consider extending the prohibition on unconscionable conduct to unfair conduct;
    • consider reform to the prohibition on third line forcing in section 47;
    • recommend that the provisions relating to secondary boycotts be removed from the CCA except where they involve unfair commercial practices by a competitor. Should this not be adopted, we recommend that the legislation be updated to clarify that the provisions are not intended to apply to social or political conduct that is in the public interest;
    • consider whether section 50 is capable of preventing significant concentration in key markets;
    • consider whether a higher standard should be set for approval of voluntary industry codes;
    • consider whether the CCA should be amended to allow a court to order compensation for loss or damage suffered by non-party consumers.
  • We strongly oppose any proposal to separate the competition and consumer protection functions of the Australian Competition and Consumer Commission (ACCC) into separate regulatory bodies. We also oppose splitting the Australian Energy Regulator from the ACCC.
  • The Australian Competition Tribunal needs to be made more accessible to consumers if it is to be in a position to make fully informed decisions on the matters coming before it.

The panel should consider whether state regulators in key markets have the necessary compliance and enforcement powers to be effective.

A full copy of our submission is available by clicking: Competition Policy Review Issues Paper.

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