Competition policy review - Issues Paper

30 April 2014 | By Mark McCowan (Partner)

On 4 December 2013, the Australian Government formally announced its ‘root and branch’ review of competition law and policy (Review).  The Review’s final Terms of Reference and the Review Panel were announced by the Hon Bruce Billson MP, Minister for Small Business, on 27 March 2014.  The Review Panel has been given a very broad mandate “to inquire into and make recommendations on appropriate reforms to improve the Australian economy and the welfare of Australians.

See here for our earlier article about the Terms of Reference and Review Panel.

On 14 April 2014, the Review Panel released its Issues Paper, stating that the overarching objective of the Review is to:

identify competition-enhancing microeconomic reforms to drive ongoing productivity growth and improvements in the living standards of all Australians.”[1]

A copy of the Issues Paper is available here.

The key focus of the Review, as set out in the Issues Paper, is:

  • how to introduce competition more broadly across all sectors of the Australian economy;
  • what institutional arrangements can best support an ongoing reform agenda;
  • whether the current competition laws are “fit for purpose”; and
  • whether the regulators are as effective as possible. 

In seeking views on these matters, the Issues Paper:

  • outlines six focus areas;
  • poses eight ‘high level’ questions consistent with the overall purpose of the Review; and
  • poses over 50 additional more specific, but broadly framed, questions elaborating on the input sought.  

Competition Policy Principles

Key Question 1: What should be the priorities for a competition policy reform agenda to ensure that efficient businesses, large or small, can compete effectively and drive growth in productivity and living standards?

The Terms of Reference directs the Review Panel to consider Australia’s competition policy as a means of delivering competitive markets and enhancing the welfare of Australians.  As such, the Review Panel encourages stakeholders to consider whether the National Competition Policy continues to be ‘fit for purpose’ for the current and emerging economy.

Regulatory Impediments to Competition

Key Question 2: Are there unwarranted regulatory impediments to competition in any sector in Australia that should be removed or altered?

The Review Panel has identified several forms of regulatory restrictions including:

  • restrictions arising from the granting of intellectual property rights; and
  • restrictions on land sale and use (planning, zoning and development laws).

In particular, the Review Panel requests submissions on whether there are any restrictions arising from IP laws that have an unduly adverse impact on competition, and whether the objectives of these IP laws can be achieved in a manner more conducive to competition.

In relation to regulation of land use, the Review Panel seeks submissions on whether there are planning, zoning or other land development regulatory restrictions that have an adverse impact on competition and whether the objectives can be achieved in a manner more conducive to competition.

Government-Provided Goods and Services and Competitive Neutrality

Key Question 3: Are government-provided goods and services delivered in a manner conducive to competition, while meeting other policy objectives?

Key Question 4: Is there a need for further competition-related reform in infrastructure sectors with a history of heavy government involvement (such as the water, energy and transport sectors)?

The Review Panel states that there appears to be scope for further reform in the transport, water and telecommunications sectors as well as finalising reforms in the energy sector.  These sectors have been identified as having significant government involvement.  As seen with the Hilmer Review (in 1993), the Review Panel is concerned with issues broader than those related to the Competition and Consumer Act 2010 (CCA) and intends this Review to cover microeconomic reform in a range of specific sectors of the economy.

Additionally, the Review Panel also seeks comments on the effectiveness of the current competitive neutrality policy and whether it applies to appropriate government business activities.

Potential Reforms in Other Sectors

Key Question 5: Would there be a net public benefit in encouraging greater competition and choice in sectors with substantial government participation (including education, health and disability care and support)?

Again, the Review Panel has identified areas with significant government involvement and is seeking submissions on whether competition should be increased in those areas.

Competition Laws

Key Question 6: Are the current competition laws working effectively to promote competitive markets, given increasing globalisation, changing market and social structures, and technological change?

This chapter involves the examination of a range of aspects of the CCA, including:

  • whether the definitions of ‘market’ in the CCA operate effectively;
  • how should misuse of power be dealt with under the CCA given the structural changes in the economic over time;
  • whether existing unfair and unconscionable conduct provisions work effectively to support small businesses;
  • whether recommendations in the Productivity Commission’s report on the National Access Regime be adopted;
  • whether cartel, horizontal agreements and primary boycotts provisions in the CCA operate effectively;
  • should price signalling provisions be retained;
  • whether joint venture, third line forcing, resale price maintenance and secondary boycotts provisions of the CCA operate effectively;
  • whether merger provisions of the CCA operate effectively and are being applied effectively by regulators and the courts;
  • whether statutory exemptions, exceptions and defences, authorisation and notification provisions operate effectively;
  • the accessibility of the collective bargaining process for small businesses;
  • whether the code framework (for both mandatory and voluntary codes) is effective;
  • whether enforcement powers, penalties and remedies are effective. In particular, whether other remedies or powers (such as those used in other jurisdictions) should be introduced;
  • more generally, are there any factors that make it difficult for small businesses to enforce their rights; and
  • whether there are any competition concerns in key markets not currently addressed by competition laws.

Administration of Competition Policy

Key Question 7: Are competition-related institutions functioning effectively and promoting efficient outcomes for consumers and the maximum scope for industry participation?

Key Question 8: What institutional arrangements would best support a self-sustaining process for continual competition policy reform and review?

The Review involves looking at whether the current competition related institutions are functioning effectively and what can be done differently.  Institutions identified include:

  • the Australian Competition and Consumer Commission;
  • the Australian Competition Tribunal;
  • the Australian Energy Regulator;
  • the Australian Securities and Investments Commission;
  • the Foreign Investment Review Board; and
  • each state and territory competition regulator such as the Independent Pricing and Regulatory Tribunal in New South Wales.

Next steps

The Review Panel has sought to manage expectations at the outset of its sweeping review.  It acknowledges that, given the broad Terms of Reference, it will need to prioritise its analysis and recommendations.  The Review Panel has indicated that any proposals for change will most likely be made where the issues at stake have previously been “tested and debated”. 

The purpose of the Review is to look at the competition policy, not the competitiveness of individual sectors in the Australian economy.  As such, the Review is forward looking and aims to establish a competition policy that would form the foundation for competition and economic growth in Australia for the next 20 years.  The Review is not intended to recommend in detail, specific legal reforms, rather it would serve as a “catalyst for ongoing reform”.[2]

Submissions on the Issues Paper are due by 10 June 2014.  The Issues Paper will be followed by a Draft Report, and a Final Report will be provided to the government within 12 months.

  [1] Issues Paper, page 1

  [2] Issues Paper, page 3

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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Eddie Scuderi

Partner. Brisbane
+61 7 3228 9319


Mark McCowan

Partner. Melbourne
Partner. Sydney
+61 3 9672 3335