‘Root and branch’ review underway - Terms of reference released and review panel appointed

OVERVIEW

On 27 March 2014, the Hon Bruce Billson MP, Minister for Small Business, announced the terms of reference and the review panel for the independent ‘root and branch’ review of the Competition and Consumer Act 2010 (Cth) (Act), Australia’s competition and consumer law.

The Government indicated a ‘root and branch’ review of the Act would be undertaken during last year’s federal election campaign.  The announcement of the review panel and the release of the terms of reference (which have not changed significantly since a draft was released in December 2013), has been long awaited. 

The terms of reference are very broad and present a herculean task for the review panel to deliver their final report with the twelve months allowed.  While the terms require a comprehensive review of the Act, the focus to date, both by the Government and in public commentary (including by the ACCC), has been on the review’s consideration of the protections offered to small business, the operation of misuse of market power provisions, and specific industries. 

The review panel is well credentialed and provides the expected balance between specialist competition law expertise, policy nous, and large and small business perspective.  The first task of the panel is to prepare an issues paper, which will no doubt provide useful guidance to business in understanding the approach that the panel will take in tackling the terms of reference, and how best to participate in the review.

Terms of reference

The review panel has been given a broad mandate “to inquire into and make recommendations on appropriate reforms to improve the Australian economy and the welfare of Australians”. 

Broadly, the review is to focus on:

• assessing whether the Act and regulatory agencies are operating effectively, having regard to a number of specific factors, including the regulatory balance between the Commonwealth and the States and Territories, best international practice and changing market and social structures;
• considering whether appropriate changes to legislation and institutional arrangements need to be made, having regard to the impact on long-term consumer benefits and Australian businesses’ ability to compete domestically and internationally;
• examining whether efficient businesses, both big and small, can compete effectively, and have incentives for investment and innovation, as a result of the competition provisions and special protections for small business in the Act;
• considering whether there are any other impediments to competition including regulation, policies and regulatory agencies; and
• considering government business activities, and the efficacy of separating government funding of services from service provision, privatisation and price regulation.

In examining the Act, the review panel is to consider whether the Act appropriately protects competitive processes and facilitates competition, including whether:

• the current provisions of the Act operate as intended;
• the prohibition against misuse of market power effectively prohibits anti-competitive conduct and is able to sufficiently address the required breadth of matters, capture all behaviours of concern and support the growth of efficient business regardless of size;
• uncertain or rarely used areas of the Act could be framed differently or administered more effectively;
• the framework for industry codes of conducts, and protections against unfair and unconscionable conduct, encourage reasonable business dealings, particularly in relation to small business;
• existing exemptions from competition law and/or sector-specific arrangements remain warranted; and
• the National Access Regime (in Part IIIA of the Act) is adequate.

The terms of reference also identify that the review panel should consider industries with “natural monopoly characteristics ... including, but not limited to, groceries, utilities and automotive fuel”, concentrated and vertically integrated industries and government enterprises.

The final terms of reference can be found here.

Review panel and next steps

The review panel comprises a chair and three members.  Ian Harper, an economist and partner at Deloitte Touche Tohmatsu, has been appointed as chair.  Su McClusky, Chief Executive Officer of the Regional Australia Institute, Michael O’Bryan SC, Senior Counsel at the Victorian Bar with extensive experience in the area of competition law, and Peter Anderson, recent Chief Executive of the Australian Chamber of Commerce and Industry, have been appointed as panel members.

As a first step, the review panel is to publish an issues paper for comment.  There has not yet been an indication of when this will occur.  The review panel will subsequently hold public hearings and receive written submissions.  

The review panel is required to publish a draft report for comment.  Following publication of the draft report, further public consultations will be held.

The final report is to be provided to the Government within 12 months of the appointment of the review panel.

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