ACCC bares its legal teeth

THE Australian Competition and Consumer Commission (ACCC) has shown its mettle against unfair business practices over the past year, initiating a wide range of court cases, strong review action on mergers and acquisitions review, and new market studies.

ACCC chairman Rod Sims outlined the commission’s performance to at the recent Law Council of Australia workshop in Sydney, saying with Australia’s first criminal cartel charges now before the court, the ACCC wanted to lay strong foundations for a continuing program of cases. 

“We have 10 to 12 in-depth criminal investigations and we are aiming for a steady stream of one to two criminal cases per year,” Mr Sims said. “Hopefully, this will send a clearer signal on cartel conduct; there is too much of it occurring in Australia today to the considerable detriment of the Australian economy.”

In the broad area of competition and consumer law, Mr Sims said there were also many important cases and appeals before the courts.

He named the Cement Australia penalty appeal, the secondary boycott allegations against the CFMEU, the Nurofen penalty appeal, the pending Flight Centre High Court decision and the unconscionable conduct allegations against Medibank Private Limited as some of the major cases.

In a year featuring many significant and challenging transactions, Mr Sims said the ACCC’s merger review record has been very pleasing.

Key transactions included the Qube/Brookfield acquisition of Asciano, Metcash’s acquisition of the Home Timber and Hardware Group, Iron Mountain’s acquisition of Recall Holdings, the undertakings given by Primary Health Care concerning its completed acquisition of Healthscope and TPG’s acquisition of iiNet.

The ACCC considered 319 mergers and conducted 31 public reviews during 2015/16.

“Significantly, and in accordance with our stated objectives, we cleared 90 percent of mergers without the need for a public review,” Mr Sims said.

“We believe we are getting the right balance in ensuring our focus is on the more complex or contentious end of the merger spectrum while non-contentious mergers are cleared expeditiously.”

Mr Sims said market studies were now part of ‘business as usual’ for the ACCC.

“We have had a very resource intensive market study into the east coast gas market, and we have had studies into petrol prices in Darwin and Launceston, with Armidale and Cairns to follow,” he said.

“We currently have market studies into the beef cattle sector … we also have an important market study underway in relation to motor vehicle retailing,” and he has also announced a major market study into communications.

Mr Sims said market studies were useful when concerns exist but there was no clear breach of the Competition and Consumer Act.

“It is not wise to imply, as some do, that where there is no clear breach, the market must always be working well. We think market studies can, in appropriate cases, be an important safety valve enabling the credible concerns of stakeholders to be examined.”

Mr Sims said market studies can also lead to policy recommendations, enforcement investigations and help identify whether other tools may address market ‘failures’ such as information asymmetry concerns.

www.accc.gov.au

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ACCC chairman Rod Sims’ speech is available at https://www.accc.gov.au/speech/chairmans-address-to-the-law-council-workshop

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