I acknowledge the Gadigal people of the Eora nation, and pay respects to all First Nations people present. Thank you to Ashurst for hosting us today. It’s a pleasure to join Australian Competition and Consumer Commission chair Gina Cass‑Gottlieb for this important conversation.
Around the world, proponents of open markets are having to argue our case again.
For much of the postwar era, the case felt almost self‑evident. Economies that traded, competed and welcomed new ideas tended to become richer. Countries that turned inward tended to fall behind. Australia’s own experience fits that pattern. Our prosperity has been built in large part by opening up: to trade and investment, to talent and technology, to the discipline of competition.
Australia once sheltered behind high tariff walls and ‘protection all round’. Then we became more outward‑looking and more competitive. The reforms of the 1980s and 1990s asked Australian firms to compete more vigorously at home and abroad. That transition carried real pressure. It also boosted productivity and raised living standards.
Today, advocates of open markets are on the back foot. In Australia and around the world, populism is on the march. On the far left, that emerges as a critique of big business and foreign investment. On the far right, it manifests as calls for increasing tariffs and slashing skilled migration.
In the general public, the scepticism is partly because the benefits of openness have often been large, but the distribution has sometimes been uneven. Some communities have experienced dislocation faster than renewal. Some workers have seen insecurity rise while asset owners have done well. Young people are finding it harder to buy a home.
Some of the scepticism comes from market conduct itself. People lose faith in markets when they feel the game is rigged: when prices are obscured, when contracts are one‑sided, when dominant firms entrench their position, when workers are restrained from taking better jobs, when new entrants are bought before they become serious rivals.
The answer is neither nostalgia nor retreat. Australia gains from open markets. But open markets need rules that keep them open.
That is where competition policy comes in.
There is a long tradition of economists supporting competition. Adam Smith understood that markets work best when rivalry serves the public interest. He was also sharply aware that the interests of producers and the interests of the public can diverge.
Former ACCC chair Rod Sims once put this tension in a particularly memorable way. He contrasted Adam Smith, the great figure of economics, with Michael Porter, the great figure of corporate strategy. Porter’s 5 forces framework is a neat description of how firms think about profit: reduce rivalry, raise entry barriers, limit supplier power, limit buyer power and reduce the threat of substitutes.
That is a perfectly rational perspective for a firm. A business that faces fewer rivals, weaker suppliers, more loyal customers and fewer substitutes will generally earn higher margins.
But what is rational for the firm can be costly for the economy.
Sims captured the point with a cute equation: Corporate strategy = Competition policy x (−1).
The joke works because it contains an economic truth. Competition policy aims to keep fierce rivalry alive. Corporate strategy often seeks a cosier arrangement. Competition policy aims to keep entry possible. Corporate strategy often seeks to raise barriers.
As Chicago University economists Raghuram Rajan and Luigi Zingales put it, sometimes capitalism has to be saved from the capitalists. As they note, a pro‑market agenda is different from a pro‑incumbent agenda. Competition policy should reward productive entrepreneurship – better products, lower costs, improved service and genuine innovation – while limiting the returns to unproductive entrepreneurship: lobbying for protection, locking in customers, restraining workers or buying future rivals.
We shouldn’t exaggerate the argument. Most businesses create value by cutting costs, improving quality, investing in new products and serving customers well. That is why market economies work.
But competition policy should be realistic. Firms pursue profit. Sometimes profit comes from innovation and efficiency. Sometimes it comes from market power, opacity, exclusion and lock‑in. The role of competition policy is to tell the difference.
Competition law is best understood as a pro‑market institution. It keeps the profit motive pointed towards productive ends.
The alternative is an economy in which the gains from markets are captured too narrowly. If we want Australians to retain faith in open markets, competition policy must serve the many (customers, employees) rather than preserve monopoly rents concentrated among the few.
The goal is to ensure that success remains earned, and that today’s winner can still be challenged by tomorrow’s better idea. Competition policy gives entrants room to test incumbents. It gives customers a chance to reward better ideas. It gives capital a reason to back challengers. It gives workers a path to join firms that are growing because they are more productive.
When that process works, productivity is lifted twice. New firms bring new ideas into the economy. In response, incumbents improve their own performance. The entrant changes the market for the better.
When that process is blocked, the economy becomes cosier for incumbents and less rewarding for innovation.
Given that, the decline in dynamism should concern us. Across advanced economies, and here in Australia, firm churn has slowed and new job creation has softened. Labour and capital appear to be moving more slowly towards more productive firms.
A dynamic economy is one where better firms can grow, weaker firms feel pressure to improve, workers can move to better matches and new ideas diffuse. Competition and consumer policy is one of the ways we keep that system humming.
Drip pricing is a good example. It distorts comparison. If one firm displays the full price upfront while a competitor reveals mandatory charges late, the comparison is contaminated. That rewards opacity. It puts honest firms at a disadvantage. Over time, the market can shift away from transparent competition and towards a contest over who can disclose latest.
Subscription traps raise a similar problem. Subscriptions can be valuable. They can reduce transaction costs and support new services. The concern arises when businesses earn retention through design friction rather than continuing value. ‘One click to join, half an afternoon to leave’, is no way to treat your customers.
This is why the Albanese government is acting with strong unfair trading practices reforms – addressing practices that manipulate or distort consumer decision‑making and cause harm. They are about making sure firms compete on price and quality, rather than confusion and inertia.
This is good for consumers. It is also good for businesses that compete fairly. A firm that shows its real price, provides a clean cancellation pathway and treats customers with respect should not be undercut by a rival that turns opacity into margin.
Labour markets are another focus of competition policy.
Workers are suppliers of labour. For labour markets to allocate well, workers need the ability to move. Job mobility is one of the main ways people obtain wage gains, build skills and find better matches. It is also a channel through which knowledge spreads across firms.
Restraint clauses and collusive labour arrangements are one way that large firms wield monopsony power. Even where they are legally unenforceable, non‑compete clauses can still have a chilling effect on worker mobility.
From 1 January 2027, our government is banning non‑compete clauses for workers earning below the high income threshold in the Fair Work Act, currently set at $183,100, and capturing about 9 in 10 workers.
Our reforms in this area are designed to keep labour markets functioning as markets. Businesses should protect genuine confidential information and legitimate client relationships. But excessive restraints protect incumbency at the expense of opportunity. Ordinary workers should be able to pursue better opportunities, and firms should compete for talent through wages and conditions.
The government’s merger reforms, which took effect on 1 January 2026, are also aimed at boosting economic dynamism.
Mergers can create efficiencies by supporting investment and capability. A well‑designed merger regime should allow low‑risk transactions to proceed quickly and with clarity.
But some mergers change the competitive structure of a market in detrimental ways. They can remove a close rival, absorb a potential entrant, strengthen a dominant position, or make future entry harder.
For start‑ups, this is especially significant. Acquisition can be a legitimate exit path. Many founders and investors build with that possibility in mind. But if dominant firms can routinely buy emerging rivals that might otherwise challenge them, the economy can lose the very pressure that makes markets productive.
Australia’s merger reforms are designed to give the ACCC better visibility over transactions that warrant scrutiny, while creating a clearer pathway for transactions that pose limited concerns. The aim is a system that is faster, stronger, fairer and better targeted.
A competition regime that permits creeping consolidation, strategic foreclosure or the quiet purchase of future rivals will eventually weaken faith in markets. People will still hear the language of competition, while experiencing the reality of concentration.
Corporate strategy, à la Michael Porter, often helps firms reduce competitive pressure. That can be lawful and rational. But the public interest, à la Adam Smith, asks a different question: does the conduct benefit the whole economy?
Competition policy works best when it is honest about incentives. It should respect risk‑taking and profit. It should also recognise the recurring temptation to convert profit into protection from rivalry.
Open markets have delivered enormous benefits to Australia. They can keep doing so. But openness is sustained by confidence, and confidence depends on people believing that markets work for them.
That means customers seeing real prices. It means workers having genuine mobility. It means new entrants getting a fair chance to grow. It means mergers being judged with proper attention to future rivalry. It means enforcement that makes misconduct an unprofitable strategy rather than a manageable cost.
Our government’s competition and consumer reforms are designed to ensure that open markets remain genuinely open: to customers, workers, start‑ups and better ideas.
The goal is an economy in which firms win by creating value, rather than by shielding themselves from competition.
That is how we build faith in open markets: by making sure they serve the many.
