Competition has a critical role to play in getting the economy running efficiently again post the COVID-19 pandemic and economic crisis, ACCC Chair Rod Sims said today.
Mr Sims was speaking via the Australian Financial Review’s special edition Banking & Wealth crisis webcast on the challenges to competition in the current crisis.
Mr Sims said the ACCC was working with businesses across the economy to authorise cooperation between competitors to enable them to support the community and survive this crisis.
The ACCC has allowed the ABA to coordinate its response to small business debt relief packages, supermarkets to ensure supply chains and logistics are working efficiently to ensure shelves are stocked, and medical suppliers to expand capacity to produce urgently needed equipment.
“At a time of crisis such as in war or with a pandemic, where there is a common enemy to fight for the nation’s survival, and so a sense of national purpose, co-ordination is both efficient and carries little or no downside,” ACCC Chair Rod Sims said.
“But in normal times, without a common enemy, co-ordination leads to complacency, inefficiency and higher prices.”
“It is important that these short-term measures do not give rise to long-term structural damage to competition, market concentration or long-term arrangements that make it more difficult for businesses to enter and compete into the future,” Mr Sims said.
Mr Sims also discussed the ACCC’s COVID-19 Taskforce which is monitoring and gathering daily intelligence about emerging issues, and working to ensure consumers understand their rights when dealing with cancelled events, travel or services.
“We have already contacted numerous businesses including gyms, travel companies, and event payment processors, just to name a few, to change their approach in relation to refunds or fees to postpone or delay a service, without fanfare but with great success in getting better outcomes for consumers,” Mr Sims said.
The Government’s Consumer Data Right, that the ACCC is leading, is a key reform that Mr Sims says will help to stimulate competition for financial services when the Australian economy emerges post COVID-19.
“We may not know when the gains from Consumer Data Right will kick in, but we can be certain they will be profound. Competition, consumers, and the economy will be benefit considerably,” Mr Sims said.
“But it’s important to recognise that newer entrants and smaller businesses are often hit hardest in a crisis, and they will need support to survive.”
“We will work with fintechs and start-ups to understand the challenges they face and take them into account as this crisis unfolds.”
“If ever there was a time to expedite digital innovation, this is it,” Mr Sims said.
“Post this crisis we will get the competition our financial sector needs.”