Trade act review causes concern

Blake Dawson Waldron's competition and consumer protection partner Aldo Nicotra believes that the Australian Prime Minister John Howard has been “very careful” with the wording of his announcement. He said only that his coalition government will, if re-elected, hold an independent review of the competition provisions and administration of the act. This falls some way short of the overhaul many are expecting.
The review will examine whether the legislation and its administration continue to encourage an environment in which Australia can compete internationally. It will also look at whether they provide adequate protection for the balance of power between small and large businesses, and whether they support the growth of businesses in regional Australia and deal fairly with the affairs of individual companies.
Nicotra said that the ACCC has been effective and successful for the coalition, in particular when it assumed responsibility for policing price exploitation following the introduction of the controversial Goods and Services Tax. He says it is unlikely that the government, which recently renewed Fels's term for a third time, will clamp down on the power of one of its greatest allies.
Nicotra said: “Do I personally think the review is going to make a huge difference? No. Do I think Fels will lose any power? No. Do I think the act will be amended so that it becomes less effective or less powerful? No. Quite the contrary. I actually think that, rather than getting less power, if Howard is re-elected – and indeed if the opposition wins – there's a real prospect that Fels will get more power.”
Of key concern is the market dominance test, which big business claims is inhibiting domestic takeovers and preventing Australian companies from expanding offshore. Many believe that the ACCC has been too narrowly focussed on markets in Australia, and has not taken appropriate account of globalisation, prompting fears that Australia could become little more than a branch office economy.
Nicotra said it is possible that, following a review, the ACCC will be issued with new guidelines requiring it to take certain factors into account, but it is unlikely that the act will alter significantly.