ACCC flags larger fines
COMPETITION cop Rod Sims wants bigger penalties for rogue businesses, saying existing punishments neither distinguish between the size of offenders’ businesses nor act as a deterrent.
The Australian Competition and Consumer Commission chairman says changes to penalties are a “huge priority” for the regulator this year.
“We have seen penalties in different competition law cases that have barely distinguishedbetween the size of the contravening businesses,” Mr Sims said at an event hosted by the Committee for Economic Development of Australia in Sydney.
In a speech outlining the watchdog’s priorities for this year, Mr Sims also said a landmark study into the impact of digital platforms such as Facebook and Google, on traditional media would kick off next week as part of a wider study into the net economy.
Mr Sims said the “fundamentally important” inquiry would examine the impact of search engines, social media and aggregators on competition in markets for media and advertising services.
The ACCC is set to release an issues paper next week, kicking off the 18-month inquiry.
It comes amid rising concerns over the influence of digital platforms on the supply of news and journalistic content and their implications for media content providers, advertisers and consumers.
The probe is among the ACCC’s priorities for this year, with inquiries into retail energy markets, gas supply, NBN speeds, motor vehicle retailing, commercial construction, insurance and the dairy industry all under way.
It will also be the first full year for the ACCC to use its new authority over the misuse of market power flowing from the competition law review led by Ian Harper, with the ACCC establishing a new unit to investigate cases of “substantial lessening of competition”.
Mr Sims said new ACCC powers flowing from the Harper Review were potentially the most significant changes since the introduction of the Trade Practices Act of 1974.
The ACCC would also seek changes to penalties, to provide a better deterrent.
Cabcharge was hit with fines of $14 million for three breaches of section 46 of the competition law concerning market power, Mr Sims noted.
Yet Visa Worldwide, part of the much bigger Visa international credit card business, was fined $18 million for breaching section 47 provisions on exclusive dealing, he said.
“We believe this does not adequately send a message of deterrence to the much largerbusinesses that end up paying proportionately much smaller penalties than small and medium-size businesses,” Mr Sims said.
He pointed to a report due from the Organisation for Economic Co-operation and Development in March, on Australian sanctions for antitrust offences compared with those in other developed economies, as an important marker in the push for stronger penalties. “Put simply: large businesses should bear penalties which are commensurate to their size,” Mr Sims said.