A post-pandemic economic reform agenda that included laws against unfair trading practices, new rules for dominant digital platforms, infrastructure reform and changes to privacy and merger laws would improve the prosperity of all Australians and restore faith in the market economy, ACCC Chair Rod Sims said today.
In his final National Press Club address as ACCC Chair, Mr Sims observed that Australia’s effective competition and consumer laws meant that its market economy was widely accepted. But perceptions of unfairness and inequality were placing this at risk.
Changes to competition and consumer laws would strengthen the economy and underpin consumers’ confidence that a market economy and strong competition worked for them, Mr Sims said.
“Right now, our governments must focus on the pandemic. Only once it settles can our economy function properly,” Mr Sims said.
“When COVID-19 is under control I am convinced that early and important movement on these issues and challenges will do much to improve our economic prosperity.”
Mr Sims pointed to 10 issues and challenges ahead for the Australian economy in sectors including energy, aviation and financial services.
New rules were needed to cover dominant digital platforms to protect consumers and promote competition, Mr Sims said, while in infrastructure, he urged governments to ensure that asset sales would not include conditions that restricted future competition.
Mr Sims also reiterated his call for reforms to Australia’s merger laws.
“In my view, and the view of many others, the Australian economy suffers from high levels of market concentration to the detriment of consumers and productivity. The most important tool to prevent this is our merger laws and they are not up to the task,” Mr Sims said.
“Australia is currently facing supply and logistic challenges. I think these are made worse by our market concentration in so many areas and infrastructure bottlenecks. We need to address this through competition law, to tackle anti-competitive abuses of market power, and through general infrastructure reform.”
Important changes were also needed to the Australian Consumer Law, Mr Sims said, including a general safety provision, penalties for unfair contract terms and a law against unfair practices.
But he noted that changes to competition and consumer laws were often opposed by large incumbent businesses, to the disadvantage of their own long-term interests.
“There are law change proposals at various stages of consideration to address these issues, but progress is slow and large business resistance is often strong and effective,” Mr Sims said.
“I believe these law change proposals would make our market economy work better and would avoid the need for more specific and intrusive legislation.”
Reflecting on highlights during his 10 years-plus stint as ACCC Chair, Mr Sims pointed to the ACCC’s strong consumer enforcement record, which included creative wins against Trivago and Google, and court-imposed penalties for breaches increasing from $1 million being seen as high to recent penalties of $50 million against Telstra, $125 million against Volkswagen and $153 million against education provider AIPE.
“In my first speech as Chair of the ACCC in late 2011, I said the ACCC needed to take on more cases where the outcome is less certain, and we have done that. I said I wanted to make full use of the new consumer law provisions, and we have also done that. I also said we needed to advocate and contribute more broadly to debates where we have a useful voice to add, and we have done that,” he said.
“The ACCC is a more sophisticated agency, we have improved our enforcement model, we are a recognised world leader in consumer enforcement and product safety as well as on digital platform issues, we are now more often seen as the competition champion in Australia, and we have strong staff commitment to the agency and its objectives.”
