Merger laws ‘fall short’, says Rod Sims in valedictorian speech

Outgoing ACCC chief Rod Sims used his farewell address to the National Press Club to stress the need for better laws to help small businesses and merger control.

Sims, who will step down at the end of March, will be replaced by prominent lawyer Gina Cass Gottlieb, who, while saying nothing publicly since her appointment as a private practitioner, has dismissed the need for more merger reviews as unnecessary.

In his Wednesday speech, Sims cited the plight of farmers.

Typical Australian farmers have no say in what prices concentrated downstream buyers pay them, and then generally face the risk of a downward adjustment in international prices that they are least placed to manage,” he noted.

Small businesses are “another group whose voice is often underheard,” says Sims, who has led the ACCC since 2011 and is the commission’s longest-serving chair.

They suffer badly from unfair contract terms in standard form contracts and a range of unfair practices that an unfair practice provision would prevent,” Sims said.

“Small businesses may be faced with contracts for critical inputs, which mean prices may be raised unilaterally mid-contract, or see automatic contract extensions coupled with punitive termination clauses,” he said. -he adds.

At the same time, Sims said small businesses are at the mercy of arbitrary algorithm changes that can destroy their business, and zero-delivery platforms entering their market to lure their customers to whom they charge big commissions just because they are usually a useless middleman.”

Sims noted that while some small businesses want protection from competition, “often they’re just looking for a level playing field that they can compete on.”

“Failing to address the latter reinforces shouting for the former, which isn’t helpful.” Changes to the CCL [Competition and Consumer Act] would, I think, make Australian small businesses more productive.

According to Sims, the Australian economy “suffers from high levels of market concentration” which has a detrimental effect on consumers and productivity. The country’s merger laws are the most important tool to prevent this, Sims argued, but “they are not up to the task.”

However, he noted that changes to competition and consumer laws were often opposed by big business incumbents, to the detriment of their own long-term interests.

Sims listed shortcomings in the existing law, noting practices that escape scrutiny such as “breach consumer warranties, provided that you do not tell the affected consumer that they do not have that right; put conditions in standard contracts that, for example, allow the big selling company to unilaterally increase the price you have to pay during the term of the contract; and large corporations abusing their position of power by treating their customers unfairly”.

Problems with merger laws, Sims explained, included that the ACCC has to prove “if a case goes to court, there will be future negative consequences that can only be speculated against the so-called real-world evidence of the necessarily interested merging parties on what will happen in the future” .

Sims pushed his attack on government privatizations that don’t focus on competitive aspects, meaning consumers and small businesses are the losers.

“In Australia, almost uniquely, we seem to be focused on the price at which we can sell infrastructure assets, rather than ensuring that our infrastructure benefits our wider economy,” he said.

“Such behavior can significantly affect existing users and could be seen as a continued tax on the community.”

Sims noted that while the merger law reforms would be opposed by big business and their advisers, “I suspect well over 90% of Australians would support them”.

In his filing with the ACCC, Sims noted that the commission creative winsagainst Trivago and Google, as well as the change in perception of the sanctions imposed by the courts of 1 million dollars considered “high”, following much higher sanctions imposed on Telstra (50 million dollars), Volkswagen (125 million dollars) and education provider AIPE ($153 million).

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