Small business focus

As expected, the Review Panel will only consider consumer protection laws to the extent they relate to protections for small businesses. 

As reported on In Competition, the review will consider extending the unfair contract provisions that currently apply to consumers to small business.  However, other elements of the terms of reference also emphasise the Government’s objective of ensuring that both small and big business have a level playing field.  These include:

  • whether the misuse of power provisions effectively prohibit anti-competitive conduct and support the growth of efficient businesses “regardless of their size”,
  • whether the framework for industry codes of conduct and protections against unconscionable conduct provide an adequate mechanism to encourage reasonable business dealings across the economy—particularly in relation to small business, and
  • whether enforcement and redress mechanisms can be effectively used by people (and small businesses in particular) to enforce their rights.

Structural change

By including a number of “guiding principles” for the review, the terms of reference make clear that the Review Panel is to look beyond the terms of the competition legislation to identify and recommend the removal of impediments to competition. 

A number of the terms of reference are indicative of this, including the requirements that the Review Panel examine:

  • whether government businesses serve the public interest, with the possibility of further privatisation, corporatisation or price regulation,
  • whether key markets, such as fuel, groceries and utilities, are sufficiently competitive or whether legal reform is required, and
  • whether markets exhibiting tendencies of a natural monopoly should face increased competition.

A model for simplicity?

The terms of reference also reflect the views of some commentators that Australia’s “highly codified” competition laws are not sufficiently certain, effective or responsive.  This view, most recently expounded by the Monash Business Policy Forum (read more here), supports a more simplified approach to competition law along the lines of that in the United States and European Union, which contain a small number of broadly drawn prohibitions. 

However, this question will have to be weighed against other terms of reference that tend to suggest a continuing detailed approach, such as that requiring the Review Panel to consider whether areas of law that are currently uncertain or untested could be framed and administered more effectively.

A few surprises

As always with processes of such national import, there were a few surprises amongst the tasks set for the Review Panel.  By way of example, the inclusion of the National Access Regime as contained in Part IIIA of the CCA was unexpected given the fact that the Productivity Commission’s report is yet to be released by the Government.  Similarly, the review of specific exemptions for the likes of liner shipping conferences had not been previously identified as requiring review as part of a general process of this nature.

Next steps

The upcoming review is being likened to that led by Professor Fred Hilmer in 1993, which established the competition law framework largely in place today.  Like the Hilmer Review, the root and branch review is to be headed by a business person, with former CSL CEO Brian McNamee widely touted as a likely chair.

The Government is currently seeking comment on the draft terms from the States and Territories.  The Review Panel will be requested to provide a final report to the Government within 12 months.

The full draft terms of reference can accessed here.