ACCC releases initial comments on Harper Review

The Australian Competition and Consumer Commission today provided some initial comments in response to the draft report of the Harper Competition Review.

At the University of South Australia’s Annual Competition and Consumer Workshop, ACCC Chairman Rod Sims supported the Panel’s focus on both opening as many sectors as possible up to the disciplines of competition, and getting the settings of the competition law right.

“The Harper Panel’s draft report identifies a considerable amount of micro economic reform,” Mr Sims said.

In relation to the Competition & Consumer Act, Mr Sims noted that “pleasingly, the panel has given the core elements of Australia’s merger laws a stamp of approval.”

The recommendation regarding ‘concerted practices’ also responds to the ACCC’s longstanding concerns that there is a gap in the law relating to collusive or coordinated behaviour between firms that should be competing vigorously.

Another important recommendation involves section 46, the misuse of market power provision.

“The Harper Review’s recommendations seek to make this section workable and more focused on the competitive process, rather than the protection of individual competitors,” Mr Sims said.

“Clearly, given the ACCC’s submissions on this issue, this is an approach we welcome.”

Mr Sims did, however, raise some high-level questions about the review panel’s proposal to split the ACCC into two bodies.

“The Harper Panel recommends a separate access and pricing regulator that would, in essence, undertake the roles currently performed by the AER, as well as the ACCC’s functions in relation to telecommunications access, transport and water.”

“The panel sees benefit in both our current competition and consumer work, and our energy and infrastructure work, having their own separate focus and culture.  We will be discussing further with the panel exactly what problems they are seeking to solve with this split.”

Mr Sims said the recommendation raises questions about the benefits of having narrowly focussed decision makers, dealing with overlap, as well as the loss of the current synergies and scale economies.

The Chairman also discussed a recommendation by the Harper Review Panel to change the ACCC’s decision-making structure.

“The panel floats two ideas for the ACCC gaining a wider range of business, consumer and academic viewpoints, in addition to that provided by the current seven Commissioners who are themselves from very different backgrounds,” Mr Sims said.

“One idea is for an Advisory Board, either in addition to or to replace our many current advisory structures.”

“The second idea is to replace the current Commission with a Board comprising executive members and non-executive members with business, consumer and academic expertise.”

In discussing comparisons with the Reserve Bank of Australia Board, Mr Sims said several questions arise.

“To participate in the ACCC’s decision making processes non-executives would need to be involved on a weekly basis and quite heavily; is this intended? If not, which decisions will they be involved in and which not, and why?”

Other questions arising include how conflicts of interest would be managed.

Mr Sims said the ACCC intends to make detailed submission in response to the Draft Report.