Government response on Harper ‘effects-test’ recommendation

In its initial response to the Harper Report the Government ‘noted’ the Harper Panel’s recommendation to introduce an effects test into the misuse of market power laws.

They indicated that there would be ‘further consultation’ which took the form of consultation on a Treasury discussion paper over late 2015/early 2016.

Today the Government has announced that the Government will amend s 46 in line with the Harper Recommendations.  Prime Minister, Malcolm Turnbull, stated:

“… Last night, the Cabinet has agreed that we will move to amend s.46 in line with the recommendations of the Harper review.”

“What this will do is ensure that our competition law works better to enable competition, to enable smaller businesses, emerging businesses, to be better able to compete. We know that while larger firms are often very innovative and very often very competitive, they are more innovative if the hot breath of competition is coming down their neck.”

“It is subtly different from the existing one because it seeks to protect competition. When you protect the competitive process, when you protect competition, you are not protecting one firm or another, you’re protecting consumers overall.”

This has been the most controversial of the Harper recommendations and earlier consideration of the issue had split the coalition.  There was little expectation that the change would be endorsed by the Government with the result that today’s announcement came as a surprise to many.

Full details are not yet available, but the reference to any amendment being ‘in line with’ the Harper recommendations suggests that, at the very least, the substance of those recommendations will form part of any reform bill.  However, it is not expected that any changes will be introduced prior to the election.

For more information on the existing law and how it compares to the proposed law, see my misuse of market power reform page.