John Durie: Government to outlaw unfair contracts this year, as ACCC grapples with how to tackle merger laws

In a boon to small business, new rules outlawing unfair contract terms should be introduced into federal Parliament this year, according to Assistant Minister for Treasury Andrew Leigh.

The exact timing of the move is still uncertain but it is a key reform promised by the government in the last election, along with substantially increased fines for competition breaches of $50 million or 30% of turnover.

The government has already circulated a draft amendment for the penalty charges and plans to tweak legislation introduced by the previous government on unfair contract terms.

The present law simply voids the term of the contract in question, allowing the other terms of the potentially heinous contract to continue.

The reform will hit big companies that try to impose harsh terms on small business suppliers, including by changing terms in the middle of the contract without discussion.

Former competition boss Rod Sims championed the push to outlaw unfair contract terms, and the movements by the Albanese government come as ACCC chief Gina Cass-Gottlieb prepares to unveil her agenda at the annual Law Council conference on September 9, six months after she took the helm at the ACCC.

Leigh, who has long bemoaned the concentration of Australian businesses, is due to speak at the Sydney conference immediately after Cass-Gottlieb.

However, lawyers hoping for a definitive view on merger reform from the ACCC chair and other changes may be disappointed.

We already know the ACCC wants changes to the present rules on the energy market, including giving the Energy Minister more time to review remediation measures and powers to intervene when gas companies are in deficit. This means they have already committed all their gas supplies.

Cass-Gottlieb has argued the export control mechanism needs to be reviewed, more flexible and fit for purpose. She has also said the heads of agreement need specific commitments from LNG exporters to supply gas domestically on terms users can actually accept and to be enforceable.”

Telecommunications is also in focus. The NBN is expected to hand its revised access undertaking to the ACCC in September and it is hoping to mark its ruling early in the new year ahead of the March deadline.

The variable CVC access charges are unlikely be accepted if presented again, given the focus on price certainty and need to constrain future price increases.

Communications Minister Michelle Rowland is keen to focus on NBN service quality, which means the ability to invest further in the network.

The importance of “fast, reliable and affordable internet to enable businesses to take up advanced digital technologies” is highlighted in the Productivity Commission’s report on ‘Australia’s data and digital dividend’, published on Tuesday.

“We do well in Australia on basic aspects of technology and data use, like internet coverage, but are falling behind in more advanced areas such as business uptake of analytics and artificial intelligence,” said commissioner Dr Stephen King in the report. 

Cartel, greenwashing concerns ahead of merger reforms

At the Sydney law conference Cass-Gottlieb is expected to say she sees the need to amend merger laws, but so far has stopped short of detailing the changes she wants.

A revamp of the merger laws is unlikely to be unveiled this year with other matters taking priority.

Her agenda will talk of continuity on key priorities of the Sims era, including cartel and immunity provisions, along with an emphasis on cracking down on greenwashing claims by companies.

Cass-Gottlieb has flagged the need for additional powers to crack down on digital platforms but again has stopped short of detailing the provisions which await her report on the issue due to be handed to Government at the end of September.

She rejects labels applied to US administration of competition rules saying the Australian law already applies a wider perspective on prices, service and innovation.

The US debate is over the consumer welfare model, which says competition law should aim to deliver lower consumer prices as the first, second and third priorities.

New US anti-trust boss Lina Khan has argued wider issues should be considered and has launched an aggressive campaign against the big digital platforms.

Google has argued Australia should monitor offshore developments before proceeding with increased controls.

Cass-Gottlieb is still mulling the issues.

She is committed to enforcement with a strong pipeline of cases, including the action launched in May against Mastercard for alleged anti-competitive action in the debit card space.

A review of the failed ANZ cartel case is ongoing and unlikely to be completed by year’s end.