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.