Australia’s Competition and Consumer Commission (ACCC) is now arguing that reform is needed to put the regulator’s antitrust toolkit in line with international counterparts.
Speaking at a competition law and economics workshop hosted by the University of South Australia this week, ACCC chair Rod Sims highlighted a number of rising challenges facing the regulator.
Specifically, he drew attention to the limitations of current merger control standards.
“If we are serious about protecting competition in this country, we must ensure our merger control regime works as effectively as possible, and that it is consistent with international best practice,” he said.
Arguing that the future innovation, productivity and welfare of Australians depends on there being an adequate level of competition in the economy, Mr Sims warned that existing policy tools risk falling short of new challenges.
“Merger control is critical to protecting and promoting competition. It is the gatekeeper, protecting us from the negative effects of increases in concentration,” he said.
Pointing to recent issues caused by the ACCC’s requirement to prove the likely future state of competition in merger cases and cases involving anti-competitive conduct, Mr Sims argued that the existing legal test is problematic because it confines the regulator to what is currently known and provable about the future.
“The fundamental issue is that when applying our ‘substantial lessening of competition’ test in merger cases and other competition cases, the approach taken by the courts currently requires the ACCC to prove what is likely to happen in the future, rather than considering the overall interference to the competitive process which will be caused by the acquisition of a key player by its closest competitor or by other anti-competitive behaviour,” he explained.
Mr Sims also noted that the ACCC faces increased practical difficulties when it comes to getting the information needed to conduct merger assessments.
“We are also put under inappropriate time pressure, and we face threats to complete. We are also hearing of more mergers only shortly before they are to complete,” he said, going so far as to call the approach of companies to Australia’s merger process “contemptuous”.
During his speech, Mr Sims touched on the role of local regulators like the ACCC within the wider global debate around the regulation of digital platforms.
“Around the world, there is growing recognition among relevant authorities that existing antitrust laws have not held up well to the challenges posed by digital markets,” he said.
Mr Sims revealed that the ACCC is currently considering the need for sector-specific regulation to address the competition and consumer concerns within digital platform markets.
He said that formal advice on the matter is expected to be included in the regulator’s next report to the federal government as part of the Digital Platform Services Inquiry.
“In my view, the effectiveness of our competition laws is at stake,” Mr Sims said.
