Australian Competition and Consumer Commission Chairman (ACCC) has announced small businesses will enjoy greater protection against predatory pricing and misuse of market power, following proposed legal reform.
According to the ACCC, the government is preparing to remove blockages in the Trade Practices Act that would allow the regulator to take more effective action on behalf of small businesses. The amendments include:
- Reforms to section 46 to clarify the concept of "take advantage" and to remove the need to demonstrate a capacity for recoupment.
- Reforms to section 155 to allow the ACCC to better use its information gathering powers.
In his speech taking a holistic approach to assisting small businesses delivered on 11 June 2008 at the National Small Business Summit, ACCC chairman Graeme Samuel said Australia's 1.9 million small business owners would benefit in the increasingly competitive economy.
According to Mr Samuel, the proposed laws follow decades of inconsistent interpretation of the Trade Practices Act, predatory pricing and misuse of market power provisions by the courts.
"Protecting their welfare means dealing with a number of issues, from scams to cartels, to bullying by other businesses," he said. "As spending contracts, businesses are likely to feel this pressure and are increasingly looking to the Trade Practices Act to ensure they are being adequately protected from unfair trading practices.
The chairman alluded to ACCC's recent litigation preventing Telstra from misleading its customers about the extent of coverage on its Next G mobile network, which he said was a "win" for small businesses and consumers in rural and regional Australia.
"The small business community is...rightly concerned about big businesses misusing their market power and engaging in predatory pricing," Mr Samuel said. "Cartels and unconscionable conduct have the potential to be equally as damaging."
Mr Samuel highlighted that strengthening the laws against the misuse of market power and predatory pricing means the ACCC:
- is well placed to further assist small businesses; and
- give them an even better opportunity to grow and prosper
"The result of more cases now being able to proceed will be a win for all those who look to the Trade Practices Act 1974 to protect the competitive process," Mr Samuel said.