John Durie
The Australian
May 07, 2012
Consumer Commission boss Rod Sims describes it more as a coincidence than a co-ordinated campaign, but somewhere between some published musing by former commissioners and his own actions, the petrol industry is in the firing line.
Just how is not yet determined, in part because Sims is not as sure as his predecessor, Graeme Samuel, that he needs new laws to counter any price fixing in the industry.
But it looks like he will get the power whether he wants it or not, because Opposition spokesman Bruce Bilson has already promised to support any move to extend existing price-signalling rules to the petrol industry or, more to the point, to ensure the ACCC has the power it needs.
The key political pressure points for the ACCC have always been petrol and supermarkets and, being a wily regulator, Sims ensures the politicians know he is on the job, which explains last week’s announcement of a new inquiry into petrol pricing.
Far better to have the matter handled professionally and on the commission’s own terms.
Globally, three industries have always been the centre of cartel activity – construction, chemicals and concrete.
Sure enough, Sims confided in a speech on the weekend that he has just written to 2500 executives in the construction industry, reminding them about the cartel laws.
The ACCC has found it better to drum up activity than wait for the industry to dob itself in.
A recent survey by the University of Melbourne’s Caron Beaton-Wells was disturbing in finding that while 42 per cent of businesses knew cartel conduct is now a criminal offence, one in 10 admitted that if offered the chance to join one, they would hop in undeterred.
As outlined before in recent musings published on The Conversation website, former ACCC boss Graeme Samuel criticised the government’s decision to restrict the new price signalling laws to the banking industry and said in any case they were so badly drafted they would be ineffective.
In his weekend speech, Sims agreed with Samuel on the stupidity of restricting the price signalling rules to banking.
The laws can be extended at the stroke of a pen, and Bruce Bilson has made clear he would support its extension to petrol where, of course, the law was originally intended.
Recent court cases have been interpreted as saying that in order to prove price-fixing, you need to prove that not only did competitors discuss prices but there was an understanding that in doing so there would be action on the discussion.
Most of the competition aspects of the law involve some sort of collective behaviour.
The price signalling rules centre on unilateral action so if one bank chief says we will only increase prices if everyone else does then that is per se against the law.
Sims agrees with many lawyers who think the ACCC already has the power to combat price fixing in the petrol industry but, lo and behold, within weeks of Samuel and his former colleague Stephen King publicly musing about price fixing, there is an ACCC inquiry into the issue.
Whether this is just to keep the politicians at bay remains to be seen.
But there is a real danger that Sims will end up with a new power, which, he says he doesn’t need, and which his predecessor says is unworkable as presently drafted.
That would be a classic case of dumb regulation.
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