Louise Pratt (WA, Australian Labor Party) Share this | Hansard source

He has highlighted that:

Many corporations have a substantial share of a market; however, few firms have substantial market power.

He highlights that having a substantial share of the market tells us little about whether there is a problem that warrants attention. So market share is meaningless, as the key question is whether a firm acting on its own has what is called discretionary power. That is whether it is able to take account of the competitive reaction of other firms. It might have 100 per cent of the business but still not be able to raise its prices because of the threat of a new entry into the market if it does. So market share is indeed an inadequate test. It is disappointing that the coalition seems intent on voting down important elements of this legislation. It is time for a provision that will serve to assist the regulator to bring cases against big companies that abuse their market power, and the Birdsville amendment as enacted about 12 months ago just does not cut it and will not do the job.

The Consumer Action Law Centre have highlighted the complexity of predatory pricing versus competitive pricing and they have supported a new proposed subsection 46(1AB). They said:

As noted above, proceedings alleging predatory pricing have been particularly difficult to prove. One of the reasons for this is that, in order to find that a firm had substantial market power, the courts have required the firm to be able to recoup the losses it had incurred by under-pricing. In our view, the requirement for recoupment of loss in every case of predatory pricing is misguided. The ability to recoup losses after eliminating competitors through sustained price-cutting conduct may be relevant to determining whether the conduct was predatory or simply competitive, but it is not determinative of such. Indeed, it has been suggested that the upshot of the Boral decision, in which the High Court dismissed the allegations of—

Debate interrupted.