Thought piece on root and branch review

Dr Martyn Taylor and Josh Buckland at Norton Rose Fulbright have just published an excellent thought piece on the proposed ‘root and branch‘ competition review (still awaiting final terms of reference and panel!). Headed ‘The greatest Australian competition reforms in 20 years‘ the piece works through the political context to the Review, the ‘extraordinary’ breadth of the review, the panel and timing of the review, the ‘likely apetite for further deregulation’, possible agency reforms, possible ‘trimming’ of the laws, small business issues and more – it runs for eight pages and is well worth reading. It can be downloaded from CCH’s law chat page.

Shopper docket undertakings

The ACCC has accepted s 87B undertakings from Coles and Woolworths to ‘cease making fuel saving offers which are wholly or partially funded by any part of their business other than their fuel retailing business’ and to ‘limit fuel discounts which are linked to supermarket purchase to a maximum of 4 cents per litre.’ The undertakings note (in part) that while ‘[Woolworths/Coles] does not accept that any of its fuel savings offers have adversely affected competition, [Woolworths/Coles] has voluntarily and without admissions offered to provide this Undertaking to address the matters raised by the ACCC’.The undertakings also contain a meeting competition exemption.

• ACCC press release
• Woolworths undertaking
• Coles Group undertaking

This has (rightly) attracted some criticism.  For example, the team at ‘The State of Competition‘ (Issue 15) refer to this as a ‘backdoor deal which has removed a clear benefit for Australian consumers’ and suggest that any such deal brokered by someone other than the ACCC would constitute a ‘straight-forward hub and spoke arrangement’.  Similarly, Blair Speedy over at the Australian believes ‘the ACCC’s decision to deny shoppers the opportunity to save a few dollars – and even at 45c a litre the savings on the average fill of 28 litres is just $12.60 – in the name of supposed competition seems bloody-minded at best.’ (Discount dockets no hurdle for rivals, 14 December 2013) and, more to the point, the Australian Financial Review points out that iIf the two big supermarket retailers had met secretly to jointly limit the amount of petrol discounts they offer shoppers, they could find themselves hauled before the courts for anti-competitive price fixing’ (Putting a brake on shopping competition, 11 December 2013, page 38) and notes that the ACCC has ‘not released evidence’ to back their claims that supermarkets are using market power to subsidise fuel discounts.  See also Simon Evans and Marianna Papadakis, ‘Seniors disadvantaged by fuel docket limit, says lobby group‘ (Australian Financial Review, 11 December 2013)

ACCC releases new Compliance and Enforcement Policy

The ACCC’s new Compliance and Enforcement Policy was released today, outlining ‘the ACCC’s priority areas for the year and sets out the factors to be taken into account when deciding whether to pursue matters.’ The document itself runs to 5 pages (including a cover page). View press release. View Sims’ speech, launching the new policy, at a CEDA function in Sydney. There is nothing much new on the competition law front, other than Sims’ repeated promise that we can expect ‘an increase its rate of intervention in competition matters’ by the ACCC. Reference to prioritising concentrated sectors, particularly supermarkets and fuel also came as no surprise.

In his speech Sims spoke a bit about mergers (there is not a single reference to mergers in the Policy document itself). He noted that ‘ACCC has responded to calls by   the trade practices and business community for increased transparency   and engagement with the ACCC during the course of merger reviews’, but also noted that the ‘increased level of transparency and engagement must, however, slow the process down’ (it has been widely observed tha the process has slowed since the Metcash decision; see, for example, ‘Howzat! The War on Mergers‘ from the crew at State of Competition).  In his speech he went on to say that the ACCC is revising its Informal Merger Process Guidelines and will be consulting with stakeholders on a revised draft in the coming months.

Submissions on price signalling bills due Friday

Late yesterday the Government announced that submissions to the House Standing Committee on Economics on both the opposition and the government price signalling bills (the Competition and Consumer (Price Signalling) Amendment Bill 2010 and the Competition and Consumer Amendment Bill (No.1) 2011 respectively) were due THIS FRIDAY 20 MAY … yes, they’ve given interested parties less than three days to make a considered submission.

This hopelessly inadequate time frame for considered submissions is all the more farcical given the criticisms of government bill raised first by the Senate Economics Committee in their Banking inquiry Report (chapter eight) and more recently by the Senate Standing Committee for the Scrutiny of Bills, which raised concerns about the fact that the ‘scope of the prohibitions introduced by this bill are to be determined entirely through delegated legislation.’ (see Senate Standing Committee for the Scrutiny of Bills Altert Digest 4 (pages 19-20)).

For those interested in the issue and in making a submission I also recommend reading the op-ed on page 63 of today’s Fin Review by Caron Beaton-Wells and Brent Fisse, who have been the most vocal commentators on the Government’s proposed price signalling laws. You may also wish to read the submission made by Caron and Brent to the Treasury following the release of their initial exposure draft bill – other submissions relating to that draft can be found here (there may have been more considered submissions on that draft had the submission period not been over the Christmas/school holiday period!)

View the Inquiry home page.

Welcome

This blog will soon contain my thoughts on current competition law and policy in Australia and related trade practices developments.