John Durie: Can the ACCC’s new chair fix Australia’s competition policy vacuum?

The new face of US antitrust, Federal Trade Commission boss Lina Khan, will address the Australian market on Thursday amid a policy vacuum in Australian competition law that has serious implications for SMEs.

Outgoing ACCC boss Rod Sims has met Khan and is highly regarded in the US for his work on digital platforms, but the views of his successor, Gina Cass-Gottlieb, are not yet known.

The Department of the Treasury, which is meant to drive reform, has, outside of payments reforms, been absent from the debate.

The highly regarded big business lawyer Cass-Gottlieb has not played a high profile role in Law Council campaigns, although she was a strong advocate against Sims’ successful push for a tougher Section 46 anti-market power provision back in 2012.

In contrast, US President Joe Biden has appointed a raft of high-profile new wave competition regulators with strong anti-digital platform records.

They include the 32-year-old Khan, as head of the powerful Federal Trade Commission, former News Corp lawyer Jonathan Kanter as head of the antitrust division in the Justice Department, and Tim Wu as a White House adviser.

Sims steps down at the end of March and begins his farewell tour with a National Press address on February 23, entitled “Much done, much more to do”. 

The speech will look at, among other issues, the policy challenges ahead for small business and the farm sector on issues like better unfair contract laws.

It will also cover the NBN, and his own policy recommendations, which are similar to those under consideration in the US. This includes a reversal of the onus of proof so big companies have to show why their merger won’t affect competition.

Prevailing wisdom has been that the impact on consumer prices is the sole test for competition policy, but Google, Amazon, Apple and Facebook have used their dominance to charge business consumers more, and lock out competition and innovation.

Khan has argued: “As consumers, as users, we love these tech companies. But as citizens, as workers, and as entrepreneurs, we recognise that their power is troubling. We need a new framework, a new vocabulary for how to assess and address their dominance.”

She has noted the US has “a sweeping market power problem” in which large firms have been allowed to become too dominant.

As such, the US has launched a new inquiry “designed to ensure that our merger guidelines accurately reflect modern market realities and equip us to forcefully enforce the law against unlawful deals”. 

Sims has urged a similar review be undertaken Australia, but ahead of an election in May, he has received scant regard in government circles.

Opposition spokesman Andrew Leigh has flagged changes under a Labor government noting “uncompetitive markets are hurting the nation’s growth prospects”.

“Over recent decades, the business startup rate has fallen, while market power has risen. When a few big firms dominate the market, they’ve got less incentive to innovate. Instead, the temptation is to run a mass marketing campaign, and buy up any pesky rivals that get big enough to pose a threat. The result is slower productivity growth, since the big companies are focused on moat-building, not research and development.”

Khan will be delivering the annual Bannerman lecture, dedicated to Australia’s first competition regulator Ron Bannerman, and will outline her views and changes in the US.

The hope for business in Australia is that incoming ACCC boss Cass-Gottlieb shares her views on the wider parameters than simply consumer prices in setting competition policy.