ACCC to keep close eye on market power

New ACCC chairman vows to keep close watch on market power in a number of sectors, including the supermarket chain

October 11, 2011

The new chairman of the Australian Competition and Consumer Commission (ACCC) has vowed to "keep the competition torch burning" and to rein in anti-competitive practices.

Rod Sims used his address to the Melbourne Press Club to put a number of sectors on notice, including the supermarket chains, telecommunications and major airports.

He says the ACCC will sometimes be a "noisy proponent" of pushing for greater competition into new areas to benefit consumers.

"We are the major Federal Government agency with the word ‘competition’ in our title. So I believe it is part of our job," Sims says.

He told the Press Club many smaller suppliers feel they lack real ability to negotiate supply arrangements due to the power of the two supermarket majors, Coles and Woolworths.

"ACCC can and will watch closely to ensure any such dealings do not involve unconscionable conduct by the supermarkets," he says.

"Telecommunications, particularly the National Broadband Network, and the operation of our major airports are sectors where ACCC oversight will be vigilant in the interests of both consumers and access seekers."

Sims expressed particular concern about the rollout phase of the National Broadband Network where service providers will continue to be reliant on Telstra’s copper network.

"During the transition it is crucial that there is equivalence of outcomes, that there is a level playing field so that the competitive landscape is not distorted as the NBN is rolled out," he says.

With the ACCC previously raising concerns about the monopolistic practices of Australia’s major airports, Sims suggested the use of commercial negotiations between airports and their users, free of the use of market power.

"When airport users are negotiating with the airports, they can have access to an outcome arbitrated by the ACCC if required. This is part of our most recent submission to the Productivity Commission on the subject," he says.

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