The head of the ACCC says competition in Australia faces big challenges.

ACCC chair Rod Sims says that innovation, productivity and the welfare of Australians depends on there being an adequate level of competition.

In a recent speech, Mr Sims said three main competition issues needed to be addressed: merger law reform, the need to prove the future in competition cases, and the role of new regulation for digital platforms.

“Merger control is critical to protecting and promoting competition. It is the gatekeeper, protecting us from the negative effects of increases in concentration,” Mr Sims said.

“If we are serious about protecting competition in this country, we must ensure our merger control regime works as effectively as possible, and that it is consistent with international best practice.”

He said many issues are caused by the ACCC’s need to prove the likely future state of competition in merger cases and cases involving anti-competitive conduct.

“The fundamental issue is that when applying our ‘substantial lessening of competition’ test in merger cases and other competition cases, the approach taken by the courts currently requires the ACCC to prove what is likely to happen in the future, rather than considering the overall interference to the competitive process which will be caused by the acquisition of a key player by its closest competitor or by other anti-competitive behaviour,” Mr Sims said.

The problem with the existing legal test is that it is being confined to what is currently known and provable about future developments.

Mr Sims also outlined certain challenges the ACCC faces when reviewing merger cases on a day to day basis.

“Increasingly we are having difficulty getting the information we need to conduct our merger assessments. We are also put under inappropriate time pressure, and we face threats to complete. We are also hearing of more mergers only shortly before they are to complete,” Mr Sims said.

“Indeed, ACCC Commissioners observe that the approach of companies to Australia’s merger processes is sometimes contemptuous.”

Mr Sims then outlined global developments in the “hotly debated” area of ex ante regulation of digital platforms.

“The ACCC is in the thick of this debate,” Mr Sims said.

“Around the world, there is growing recognition among relevant authorities that existing anti-trust laws have not held up well to the challenges posed by digital markets.”

The ACCC will consider the need for sector-specific regulation to address the competition and consumer concerns in digital platform markets as part of its five year digital platform services inquiry.

“Our advice will be provided in a report of the Digital Platform Services Inquiry which is due to the Treasurer in September 2022. Importantly, we will seek industry views on this crucial question, and we will liaise closely with the Commonwealth Treasury” Mr Sims said.

A full copy of the speech is accessible here.