The Turnbull government will legislate to fix competition policy in Australia through implementation of the Harper Review’s recommendation to amend Section 46 of the Competition and Consumer Act - the misuse of market power provision.
The Harper Review into competition policy found Australia’s current misuse of market power provision is not reliably enforceable and permits anti-competitive conduct.
The Harper Review recommended that Section 46 be replaced by a new provision, which is better able to deal with harm to competition in Australian markets. Section 46 currently puts the onus on the business claiming anticompetitive conduct to prove that this was the intention of the business which it sees as damaging its business. The proposed new legislation will rely of the effect of the larger business' practices on the smaller business.
Following consultation the Government has decided to repeal the current Section 46, and adopt the changes recommended by the Harper Review in full. This will result in a new provision that prevents firms with substantial market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition.
A press release issued by the Government states: 'Conscious of the needs of business, the change is deliberately designed to reduce the uncertainty associated with amending a law. It uses existing legal concepts from within the competition law – such as ‘substantially lessening competition’ – and ensures the focus of the provision remains only on those firms that have substantial market power.
This reform represents a commercially and legally robust law, preventing firms with market power engaging in behaviour that harms the competitive process. It places Australia’s competition law on the right footing to encourage economic growth and innovation.
An effective misuse of market power provision is an important and necessary part of competition law, particularly for Australia’s more than two million small businesses which make up more than 97 per cent of all businesses. '
The changes the Government has announced will more effectively focus on the long-term interests of both small businesses and consumers, improving the law’s clarity, effectiveness and force.
The Government’s response will directly benefit small businesses through:
access to remedies, with the Government supporting the Australian Competition and Consumer Commission to take steps to improve its communications with small business and to more actively connect small businesses to alternative dispute resolution schemes;
improving the collective bargaining regime under the competition law, to provide more flexibility and increased information for small businesses, to help improve their bargaining position;
encouraging state, territory and local governments to review their competitive neutrality guidelines, to ensure that their commercial operation do not negatively affect commercial businesses; and
reviewing the anti-competitive impact of regulations, including standards and licensing, freeing up trading restrictions that apply to many businesses.