Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

Regardless of Senator Brandis’s interjection I am regarding it as a package that is building on the amendments that came in last year and is aimed at being more effective in preventing the misuse of market power and predatory pricing. The aim of both what Senator Joyce tried to do with the Birdsville amendment and what is being attempted here today is to try and make section 46 more effective, and that is something that the Greens definitely support.

Apart from some of the other matters in the bill, the key issue is the debate between market power and market share. Essentially that is the key difference between what the government is putting forward here today and what the Birdsville amendment sought to do. We note that small business believe that market share provides a better test, given the previous narrow interpretation of market power. We also understand the frustration of small business, given the inability of section 46 to provide adequate protection from anticompetitive behaviour. But we remain to be convinced that market share is the answer to a more effective section 46. We note that the ACCC and other commentators do not accept that market share is easier to demonstrate and they argue that market power is a more appropriate concept for the purposes of the section. I note in particular that that is the view put forward by the ACCC. Since that is the body responsible for the act and, of course, the body most likely to prosecute under section 46, I think it is worth listening to what the ACCC had to say. In the speech by Graeme Samuel to the National Small Business Summit on 11 June this year he said:

The reforms announced recently by the government to section 46 and section 155 of the TPA continue the process of providing the regulator with the tools it needs to vigorously protect competition, while not falling into the trap of protecting competitors from the impact of that competition.

He went on to say:

However, in practice the concept of market share is no clearer than the concept of market power—particularly when the goal is to ensure the forces of competition operate effectively, rather than simply protecting small firms against larger firms.

How does a court determine what constitutes a substantial share of a market—particularly in the context of competition?

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The current government has recognised there is a concern in the community about the specific issue of predatory pricing. Accordingly, the government is proposing to keep section 46(1AA) as a specific predatory pricing provision but to couch it in terms that are familiar in section 46, and on which there is a significant body of case law …

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With these changes in place the ACCC considers that the balance has been adequately struck between ensuring that businesses are exposed to the rigours of competition—with all the associated economic benefits—while being protected from the possible anti-competitive consequences associated with firms gaining power from that competitive process.

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But what it does mean is when firms that have market power are using that power for an anti-competitive purpose the ACCC will be well placed to act.

The submission and evidence from the Consumer Action Law Centre to the Senate inquiry supported the government’s position. Given that the key purpose of the act and the section is to protect the interests of consumers the Greens also take the centre’s views into account. The Consumer Action Law Centre said specifically that they strongly supported many of the proposed amendments and supported the proposed amendments in the bill to section 46 of the Trade Practices Act. I note that the Council of Small Business on 3 July put out a media release stating their support for the government’s amendments but then, more recently, changed their position. They did not really say why they changed. It was done in a media release saying that the debate about market share versus market power had come up since their July press release. I find that a bit difficult to believe since it has been fundamentally the issue of debate for some considerable period of time.

Many speakers tonight have referred to the 2003 Boral case and the High Court’s narrow interpretation and so on without acknowledging that there have been some amendments in the intervening years, notably last year, which have given more clarity and more direction in relation to a definition of market power—in particular, section 46(3C). It says that a firm can have market power even though it does not substantially control a market and that a firm can have market power even though it does not have absolute freedom from constraint from the conduct of its competitors, its suppliers or its customers. Furthermore, under section 46(3A) a court can consider any market power that results from agreements entered into by the firms. So there have been a number of changes since 2003 which have tried to define more clearly what market power might mean for the purposes of a legal interpretation.

The other amendments made by this bill extend the jurisdiction to the Federal Magistrates Court. We appreciate that the government is trying to make court processes more accessible. Anything that encourages greater accessibility for small business in a less highly charged environment that may mean getting to mediation is a much better way to go. We will see whether it works. It is probably logical that most cases will go straight to the Federal Court because they do involve complicated issues of law, particularly with the new amendments. I note that the Law Council is not supporting this move to the Federal Magistrates Court. However, we think that it is worth a try. It may not do anything; it may do so. Let us see whether it can make a difference. We as parliamentarians ought to be supporting processes that try to make courts more accessible rather than less so.

The removal of the price thresholds on prohibition of unconscionable conduct implements a recommendation of the 2004 Senate report which we endorse. We also think that it is important for the ACCC deputy chairperson to have knowledge of or experience in small business. While we recognise that some commentary to the Senate Economics Committee suggested that this was putting the interests of small business ahead of the consumer, I do not think that this will be the case. Getting someone onto the ACCC who has specific expertise in small business must be a good thing. It will help clarify issues and so on.

As to the extension of the information-gathering powers of the ACCC under section 155, we certainly support that. We want to have a situation where the—