Gas Week

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Former ACCC chair attacks Fed Govt reforms of predatory pricing laws: swinging pendulum too far in favour of small business

Posted by gasweek on 28 September, 2007

The former chair of the Aus­tralian Competition and Consumer Commission, Allan Fels, attacked the Federal Government’s reforms of predatory pricing laws, and said they have swung the pendu­lum too far in favour of small business and may drive up con­sumer prices, wrote Steven Scott in The Australian Financial Review (25/9/2007, p.8). Big lobbying: And he said big business lobby groups, such as the Business Council of Australia, should take the blame for the reforms because their reac­tions to previous modest reform models were so extreme. But the tax law academic who drafted the amendments that the government adopted and passed through parliament last week, Uni­versity of NSW Associate Professor Frank Zumbo, has hit back at criticism of the reforms. “This provision is clearly pro-small business protection rather than pro-competition. There’s a big differ­ence between harming competition and harming competitors. Just about all competition harms competitors.”

Polar position: When he headed the ACCC, Professor Fels proposed the preda­tory pricing laws be amended to mirror US and European Union laws that allowed consideration of whether slashing prices had the effect of harming competition. “There was a hysterical reaction by the business community,” he said. “As a result, by opposing minor change, they left a huge void. There was no middle ground, so they have now been left with [Nationals Sena­tor] Barnaby Joyce’s provisions.”

The Australian Financial Review, 25/9/2007, p. 8

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