Peter Costello

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Review of the Competition Provisions of the Trade Practices Act 1974

NO.023

REVIEW OF THE COMPETITION PROVISIONS OF THE TRADE PRACTICES ACT 1974

The Treasurer today announced the membership and terms of reference of the Committee of Inquiry into the competition provisions of the Trade Practices Act 1974, and their administration.

The Inquiry implements the commitment made by the Government in its Securing Australia's Prosperity policy during the last Federal election.

The Terms of Reference will allow the Committee to undertake a wide-ranging and comprehensive review of the competition provisions (Part IV) of the Trade Practices Act 1974, and their administration. While there have been reviews of specific provisions and Parts of the Act in recent years, there has not been a comprehensive review of Part IV since the Hilmer Committee reported in 1993.

Now is an opportune time to conduct a broad review of Part IV because there has been an extended public debate about the merits of various provisions of the Act. There has been particular concern with the mergers regime, the misuse of market power provision and the authorisation process.

Committee Membership

The Committee will be chaired by Sir Daryl Dawson, AC KBE CB, former Justice of the High Court of Australia from 1982 to 1997. Sir Daryl is currently a Professorial Fellow at the University of Melbourne, an Adjunct Professor at Monash University and recently served on the Longford Royal Commission. I am particularly pleased that such an eminent a lawyer will chair the Inquiry.

The Members of the Committee are Ms Jillian Segal and Mr Curt Rendall.

Ms Jillian Segal is currently the Deputy Chair of the Australian Securities and Investments Commission, and as such brings business experience and regulatory experience in consumer protection to the Inquiry. Given her appointment to this Committee, Ms Segal will shortly be resigning her position with ASIC.

Mr Rendall has considerable experience in the small business sector. He is currently Chairman of the Commonwealth Government's Small Business Consultative Committee. He is a member of the Institute of Chartered Accountants National Small to Medium Enterprises Committee, and a partner of Rendall-Kelly Chartered Accountants.

The membership of the Committee provides an appropriate balance of legal, business and public policy expertise to undertake a considered assessment of the range of competing views likely to be presented to the Inquiry. I welcome the high calibre of the Committee's membership, given the importance of the issues before it.

Terms of Reference

The terms of reference enable the Inquiry to consider whether the Act provides sufficient recognition for globalisation factors and the ability of Australian companies to compete globally. At the same time, the review will consider whether the Act is sufficiently flexible to respond to the transitional needs of certain industries, and specifically those in rural and regional Australia. The review will also consider whether the Act provides an appropriate balance of power between small and large businesses.

The Inquiry is intended to cover most of the provisions of Part IV of the Act, and to consider Part VII of the Act, dealing with authorisation and notification of conduct.

The review will examine the administration of the Act, and particularly whether the Act provides sufficient protection to the position of individual businesses. While the Inquiry will consider whether the ACCC deals fairly with the affairs of individual companies, this will involve a forward looking assessment of the law under which the ACCC operates and the processes it adopts, rather than reviewing its conduct in past individual cases.

Other sections and Parts of the Act were the subject of recent reviews. It is not necessary to again review those provisions, which include Parts IIIA (national access regime), X (international liner cargo shipping), XIB (telecommunications specific anti-competitive conduct rules) and XIC (telecommunications access regime), and sections 51(2) and 51(3).

The review Committee will be asked to identify and justify possible improvements to the Act. In doing so, the Committee will consult with key interest groups, call for submissions from the public, and take into account overseas experience. The Committee will be asked to seek the views of State and Territory Governments.

The terms of reference are attached.

The Inquiry will be supported by a secretariat located in the Department of the Treasury.

The Inquiry will report to the Government in November 2002.

CANBERRA
9 May 2002

Contact: David Alexander
02 6277 7340

TERMS OF REFERENCE

REVIEW OF THE COMPETITION PROVISIONS OF THE TRADE PRACTICES ACT 1974

Effective competition laws contribute to the productivity, efficiency and growth of an open, integrated Australian economy.

The Government considers it is timely to review some key provisions of the Trade Practices Act 1974 (`the Act') in view of the significant structural and regulatory changes that are occurring in Australia that impact on the competitiveness of Australian businesses, economic development and affect consumer interests.

In establishing a review, the Government is aware of concerns, among other things:

  • that Australian businesses increasingly face global competition and need to compete locally and internationally;
  • that excessive market concentration and power can be used by businesses to damage competitors; and
  • the need for businesses to have reasonable certainty about the requirements for compliance with, or authorisation under, the Act.

1. The Committee is to review the operation of the competition and authorisation provisions of the Act, specifically Parts IV (and associated penalty provisions) and VII, to determine whether they:

(a) inappropriately impede the ability of Australian industry to compete locally and internationally;

(b) provide an appropriate balance of power between competing businesses, and in particular businesses competing with or dealing with businesses that have larger market concentration or power;

(c) promote competitive trading which benefits consumers in terms of services and price;

(d) provide adequate protection for the commercial affairs and reputation of individuals and corporations (in this regard, the Committee may examine the processes followed by the ACCC and the laws under which the ACCC operates, but is not to reconsider the merits of past individual cases);

(e) allow businesses to readily exercise their rights and obligations under the Act, consistent with certainty, transparency and accountability, and use compliance or authorisation processes applicable to their circumstances; and

(f) are flexible and responsive to the transitional needs of industries undergoing, or communities affected by, structural and/or regulatory change and to the requirements of rural and regional areas.

2. The Committee is to identify, where justified, improvements to the Act, its administration and/or additional measures to achieve a more efficient, fair, timely and accessible framework for competition law.

3. The Committee may consider other aspects of the Act and the recommendations of reviews currently underway or previously completed where relevant; but is not to include in this review a direct consideration of Ss 45D-45EB, ss. 51(2) and (3) of Part IV, or Parts IIIA, X, XIB or XIC.

4. In performing its functions, the Committee is to advertise nationally, consult with key interest groups and affected parties, receive public submissions, and take into account overseas experience. As the States and Territories each apply the competition provisions of the Act as their own laws, the Committee should seek the views of the State and Territory Governments.

5. The Committee is to protect the confidentiality of the affairs of individuals and companies during the course of its deliberations.

The Committee is to report by end of November 2002.

9 May 2002

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