The Treasurer, Scott Morrison, yesterday released the long-awaited exposure draft of proposed amendments to Australia’s competition laws.

Although the draft bill covers many areas and is almost exactly in line with the Harper Review recommendations following its “root and branch” review of our competition laws last year, most of the media attention has, as expected, focused on the proposed tightening of the current misuse of market power law found in section 46 of the Competition and Consumer Act.

For a recap of the current misuse of market power law, the Harper Review recommendations and a discussion of the possible implications of the proposed changes, see here the note published by my colleague, Andrew Vinciullo and I in March 2016.

The considerations for business (big and small) discussed in our note have not, in my view, been satisfactorily addressed in the exposure draft, and I suspect that the real impact of the mooted changes to the misuse of market power law will only become clear after they have been tested in court.

Those issues are for another day.

What I want to talk about is the rationale for the proposed move from a “purpose” test to an “effects” test in section 46.

It is evident from the statements by the Prime Minister and Treasurer yesterday that the Government sees the proposed changes as consistent with its broader economic narrative surrounding jobs, growth and economic reform.

Indeed, the exposure draft states that our current misuse of market power law “creates a barrier to the entry and expansion of new and innovative firms, delays the development of new technologies in Australia and hinders productivity growth in the long term” – a statement which aligns with the Prime Minister’s push to encourage innovation and the development of new technologies.

However, opponents of the proposed changes argue that they will create uncertainty for all businesses big or small and have a “chilling effect” on innovation.

They both can’t be right, can they? Either the changes will drive innovation and growth or they won’t.

I am not convinced that the proposed changes to section 46 are necessary. What is often forgotten by proponents for the changes is that Australia’s competition laws are designed to protect competition as a whole (the so-called “level playing field”), not individual competitors. If the changes come in, we will have to rely on the good sense of judges to adopt an interpretation that is consistent with the overriding objective of Australia’s competition laws, which is consumer welfare.