Home Page / Reports / / MMP 2016 / Subs

Options to Strengthen the Misuse of Market Power Laws: Submissions

Treasury consultation following Harper Report recommendations

 

Submissions overview

Submissions were due by 12 February. Seventy submissions were received; 7 were confidential. All non-confidential submissions can be downloaded from the Review website

Submissions responded to the draft report which presented six options

  • Option A
    Making no amendment to the current provision
  • Option B
    Amend the existing provisions by removing the words 'take advantage'
  • Option C
    Amend the existing provision by removing the words 'take advantage', including a 'purpose of substantially lessening competition' test, making authorisation available, and the ACCC issuing guidelines regarding its approach to the amended provision
  • Option D
    Amend the existing provision by removing the words 'take advantage', including a 'purpose of substantially lessening competition' test, including mandatory factors for the courts' consideration, making authorisation available, and the ACCC issuing guidelines regarding its approach to the amended provision
  • Option E
    Amend the existing provision by removing the words 'take advantage', including a 'purpose, effect or likely effect of substantially lessening competition' test, making authorisation available, and the ACCC issuing guidelines regarding its approach to the amended provision
  • Option F
    Amend the existing provision by adopting the full set of changes recommended by the Harper Panel (different from Option E in that it incorporates mandatory factors for the court to have regard to when assessing effects)
    (see Harper Recommendation)

The discussion paper also invited other suggestions.

The sixty-three* non-confidental submissions were published on 16 February 2016. These can be broadly categorised as follows:

  • 36 submissions supported Options E, F or an effects test generally
    Option E = effects test (almost full Harper recommendation) and Option F = full Harper recommendation
    Of the 36 in this category, 20 supported option F (full Harper), 7 supported Option E (effects test - almost full Harper but without mandatory factors to consider) and the remaining nine expressed general support for an effects test without making any express reference to the discussion paper options
  • 15 submissions supported Option A
    (no change to current law)
  • 13 submissions did not support a specific option
    These ranged from submissions that either proposed an alternative option or made general observations without identifying a preferred reform option.

* Note, this amounts to 64 submissions; the Law Council of Australia submission incorporated submissions by both the Competition and Consumer Committee of the Business Law Section and the SME Business Law Committee of the Business Law Section; as each committee supported a different option I've listed them separately.

 

Submissions received

Treasury received seventy submissions; seven of which were confidential. Below I've indicated broadly whether or not the submissions supported (in green) or opposed (in red) an effects test and have indicated, where the submissions refer to specific options, which ones are supported or opposed. In some cases specific options are not referred to or alternative options are presented; these are indicated in blue.

A | B | C | D-F | G-I | J-L | M-N | O-R | S-Z |

From Option(s) supported

A

 
AGL Support Option A (no change)
Opposes options B, C, D and E
Arnold Bloch Leibler Support Option A (no change)
Support no change other than removal of s 46(1AA)
Ashurst Recommends no change other than removal of ss 46(1AA), (1AB) and (1A)
Atom Industries Support effects test
(no specific reference to options)
Australia Marketing Support effects test
(no specific reference to options)
Australian Competition and Consumer Commission (ACCC) Supports Option E (effects test)
Australian Convenience and Petroleum Markets Association (ACAPMA) Support Option F (effects test - full Harper)
Would also support option E, but prefer option F
Does not support options A-D
Australian Dairy Farmers Support effects test
Closest suitable option is Option E, but opposes inclusion of purpose element. Believes legislative guidance is unnecessary.
Specifically opposes options A to D as untenable because they exclude an effects test
Australian Day Hospital Association Support Option E (effects test)
Australian Newsagents' Federation Supports 'the intent of the Harper Panel consultations' and 'suitable reform of the misuse of market power law'. No indication of the specific reform supported.
Australian Small Business Commissioner Supports effects test
Agrees 'broadly with the Harper Review's recommendation relating to misuse of market power'; no reference to specific options in discussion paper.

 

 

B

 
Big Bargain Bottleshop Support Option F (effects test - full Harper)
Boral Support Option A (no change)
Business Council of Australia Support Option A (no change)
(86 page submission)

 

 

C

 
Carroll, Loretta Support Option F (effects test - full Harper)
Cattle Council of Australia Support Option F (effects test - full Harper)
CBH Group Support Option A (no change)
Chamber of Commerce and Industry Queensland (CCIQ)

Support Option F (effects test - full Harper)

Chi-X Support effects test (should 'adopt the recommendations of the Harper Review')
Also suggests consideration be given to incorporating a 'special responsibility obligation' in the law (referencing the European position on abuse of dominance)
CHOICE Support Option F (effects test - full Harper)
Would support Option E as an alternative
COSBOA Believe Harper proposals do not go far enough. Suggest better definition of market place or removal of SLC and take advantage from section 46.
Failing such a change, support Harper recommendations.
Cunningham, Michael Supports change to section 46, but believes Harper Panel recommendations are inappropriate and would lead to overreach. Supports inserting the words 'substantially lessening competition', retaining 'take advantage' and retaining para's (a), (b) and (c) (current purpose elements)

Supports repeal of subsections (1AAA) and (1AA) . Amended section 46 should be 'appropriately designed to cover predatory pricing in addition to other forms of unilateral anticompetitive conduct that involve misuse of market power.'

 

 

D

 
Deakin, Murray Focuses on threshold issue of the level of market power required - argues it should be changed to 'substantial power in a market'. No reference to discussion paper options.
Drakes Supermarkets Support Option F (effects test - full Harper)

 

 

E

 
Energy Networks Australia In principles supports simplification objective outlined in Harper Report, but need to ensure any s 46 amendments do not 'unintentionally discourage conduct that promotes vigorous competition'. No other view on discussion paper provided. Most of the submission relates to other aspects of arising from the Harper Report.

 

 

F

 
Foxtel Support Option A (no change)
Fresh Markets Australia (FMA) Support Option E (effects test)

 

 

G

 
Gilbert, RS Does not agree with any options presented in discussion paper - proposes alternative.

Opposes effects test, but recommends 'substantial lessening of competition' should replace 'harm to a competitor' test and that take advantage be removed and that authorisation be available. Suggests adoption of 'purpose AND effect' test (referencing Canada.

Section 46 should be re-drafted to outlaw 'specifically defined conduct that most people would regard as unacceptable or "unfair"'.

If this alternative option not adopted, then support is offered for Option C.
Growcom Support Option F (effects test - full Harper)
Alternatively would support 'an amended version of Option E to include the 'take advantage of' provision.

 

 

H

 
Heerey, Peter No specific support/opposition to specific recommendations. This submission focuses on the word 'likely' and the author expresses concern that if this is interpreted as 'real chance' that could set a very low threshold for satisfying the effects test.
Hodge, Michael Supports Option F (effects test - full Harper) subject to qualifications:
*
mandatory factors should only be used if they have general application across Part IV
* consideration should be given to a defence
* consideration should be given to whether the phrase 'any other market' should be 'limited to a market in which the corporation, or a related entity, supplies or acquires, or is likely to supply or acquire, goods or services.
Housing Industry Association Support Option A (no change)

 

 

I

 
Independent Contractors Australia Supports Option F (Full Harper)
Independent Grocers Australia (IGA) Appears to support effects test
Submission is in the form of a presentation and does not specifically refer to the options in the discussion paper. Submission headed with the 'Let's Compete: Change the Law' logo; this campaign clearly advocates effects test
Institute of Public Accountants Supports Option F (Full Harper)
Also recommends retaining modified purpose-based test as additional prohibition
Insurance Australia Group (IAG) Support Option A (no change)
Expresses 'strong view that section 46 is well understood and works as intended'
Insurance Council Australia Support Option A (no change)

 

 

K

 
Kemp, Katharine Recommends alternate approach to the options presented in Discussion Paper
Recommends 'Objective Anticompetitive Purpose' approach
Kettle John Supports effects test (no specific reference to Discussion Paper options)
Notes: 'Despite what Australian competition lawyers may say, the effects based test in assessing abuse of dominance never had a chilling effect on competition'
King, Stephen and Samuel, Graeme Oppose Harper recommendation - in particular, removal of 'take advantage' 'link'
Suggest that 'if there is felt to be a need to strengthen the section' the authors suggest an alternate provision, incorporating reference to 'misuse that power' which is then defined.

 

 

L

 
Law Council of Australia - Business Law Section (Competition and Consumer Committee) Support Option A (no change)
Oppose options B to F which all remove the 'take advantage' element
[Note this is part of a single submission from the Law Council of Australia - Business Law Section]
Law Council of Australia - Business Law Section (SME Business Law Committee) Support Option E (effects test)
Further recommends inclusion of guidance factors.
[Note this is part of a single submission from the Law Council of Australia - Business Law Section]

 

 

M

 
Matthews Law NZ No specific reference to options
Suggests, however, that concerns about effects-based teest may be 'overstated' and that a test 'focussing on materially adverse competitive effects' rather than purpose would be the logical starting point.
Motor Trade Association South Australia

Supports Option F (effects test - full Harper)

Motor Trades Association Queensland Supports Option F (effects test - full Harper)

 

 

N

 
National Farmers' Federation Supports Option F (effects test - full Harper)
Alternatively, would consider support for an amended Option E, to include the 'take advantage of' provision.
NSW Office of the Small Business Commissioner No specific support for Discussion Paper options:
'The OSBC encourages the Treasury to consider the merits of an approach that amends the existing provision by retaining the words 'take advantage', and includes a 'purpose or effect of substantially lessening competition' test, making authorisation available, and the ACCC issuing guidelines regarding its approach to the amended provision.'

 

 

O

 
Oxley Island Dairies Support effects test
Position on discussion paper options unclear. Recommends various other changes specific to supermarket sector, including forced divestiture

 

 

Q

 
QBE Support Option A (no change)
Queensland Dairyfarmers' Organisation Support Option E (effects test) as the 'closest preferred option'
However, does not support inclusion of purpose element and is concerned about 'the removal of the prohibition of predatory pricing and price discrimination'
Options A to D are 'absolutely untenable'
Queensland Law Society Supports Option F (effects test - full Harper) subject to addition of a defence
   

R

 
Rea, Joanne Supports Option E (effects test) as preferred discussion paper option
Does not, however, support authorisation option.
Retail Guild Supports Option F (effects test - full Harper)

 

 

S

 
SA Independent Retailers Supports Option F (effects test - full Harper)
Small Business Development Corporation WA (SBDCWA) Supports Option F (effects test - full Harper)
Spier Consulting No specific reference to discussion paper options.
However, supports change - 'policy and processes behind section 46 could comprise of the following':
* 'Those with market power should not engage in conduct to prevent or deter others from engaging in competitive activity'
* Take advantage element should be removed 'unless the previous Court interpretations can be countered'
* Prohibited conduct should be 'for the purpose, effect or likely effect'
* List of factors to consider should be contained in legislation but should not be mandatory
* There should be no private action for three years from date of any law change
* There should be no monetary fines imposed by Courts, 'but all other orders such as injunction and damages'
* Compliance notices should be able to be issued by ACCC
* ACCC should issue draft guidelines explaining the provision 'before the bill becomes into effect'
* Authorisation should be possible but with strict time limits
Sydney Airport Support Option A (no change)
   

T

 
Terceiro Legal Consulting Support Option F (effects test - full Harper)
(No specific reference to options, but expressly embraces 'Harper's proposed section 46')

 

 

V

 
Victorian Automotive Chamber of Commerce (VACC)

Support Option F (effects test - full Harper)

Vodafone Hutchison Australia Support Option E (effects test) as the most appropriate of the six DP options
Submission notes some reservations about the 'taking advantage' amendments

 

 

W

 
Wesfarmers Support Option A (no change)
Western Australian Farmers Federation No specific reference to the options presented in discussion paper
Expresses concern about impact on cooperative organisations - concludes: 'WAFarmers supports market power measures that curb the capacity for organisations to manipulate the market and other competitive forces to improve their own business position. However allowances should be made for organisations that work to benefit the users of the product or service, as well as organisations that implement cost reductions through efficiency gains to benefit the user.'
Winemakers Federation of Australia Support effect test
No specific reference to options, but notes that the Harper Recommendation is important to 'shift the current focus from damage to competitors to the competitive process itself and behaviours that substantially lessen competition' and further notes that an effects test would bring Australian competition law into line with international practice.
Woolworths Support Option A (no change)