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New laws to help ACCC target predatory pricin -

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New laws to help ACCC target predatory pricing

The World Today - Monday, 28 April , 2008 12:19:00

Reporter: Peter Ryan

ELEANOR HALL: Big businesses which try to squeeze out smaller competitors through what's know as
predatory pricing will now be reined in by tough new laws that were announced today.

In the biggest reform to the Trade Practices Act in 35 years, the consumer watchdog will be given
sharper teeth to crack down on businesses which abuse their market power.

The Competition and Consumer Commission, which has been conducting inquiries into supermarket and
petrol pricing, now has a greater chance of winning when it takes predatory pricing cases to court.

The ACCC's chairman Graeme Samuel has been speaking to our business editor Peter Ryan.

PETER RYAN: Graeme Samuel, will these new laws put an end to predatory pricing in Australia?

GRAEME SAMUEL: Yes they will. They're a very important suite of amendment that reflect the
recommendations that the ACCC made to a Senate committee, examining the application of the Trade
Practices Act to small business, which conducted hearings in 2004.

I think they deal with a series of amendments that we considered were appropriate and indeed
necessary to make section 46 of the Trade Practices Act, which deals with misuse of market power by
dominant businesses and deals with predatory pricing, but to amend the section of the Act in a way
to make it operable.

For the past 35 years, it's been clearly evident the section has not been achieving the purposes
that were intended by Parliament when it was enacted back in 1974 and decisions of the court, the
Federal Court and the High Court have largely rendered that section inoperable.

PETER RYAN: In tactical terms, what will you be able to do now that you weren't able to do before?

GRAEME SAMUEL: Litigate. Frankly, we will be able to take matters to court that in the past we have
simply following extensive investigation formed the conclusion that we had no chance of success in
the court. This will enable us to take matters to court and to bring to heal what are clear cases
of predatory pricing or misuse of market power by big business in dealing with small business.

PETER RYAN: So do you have a number of cases lined up ready to go, once the new laws are passed?

GRAEME SAMUEL: Look we don't talk about our investigations, but what I can say to use it that we
have had a number of matters that we've been investigating over the past three or four years which
frankly, following completion of investigation, we have had to put into the bottom drawer because
our legal advice, best legal advice was that they had no chance of success in the courts.

Now, these are matters that may be able to be brought out of the drawer, but certainly current
investigations that we might be dealing with at present will be dealt with in a different light in
regard to the laws that we are now having to look at.

PETER RYAN: So you'll be re-opening the files on a number of cases you've been examining over the
last few years?

GRAEME SAMUEL: It may be difficult to re-open the files because the legislation of course will not
retrospective, but certainly where there exists any continuing conduct by business that would
breach the laws as they'll be enacted, if these amendments are passed into law, then we'll of
course be able to address those.

PETER RYAN: A lot of this is focused in the supermarket sector where we have two very big players
who would be the focus of your attention. Do you have any messages for them?

GRAEME SAMUEL: We've been investigating both bear operations and the operations of a number of
another players in the grocery industry as part of the grocery inquiry. I don't want to pre-empt
the findings of that inquiry, I think we'll see a number of very interesting revelations when we
produce our report on the inquiry which is due on the 31 July.

PETER RYAN: So this is all very timely for the release of that grocery inquiry report?

GRAEME SAMUEL: Again, I think for me to make comment on that would be to pre-empt that report.
Let's wait and see what the report reveals. Suffice to say, in a range of areas, not just
groceries, where we discover any evidence of predatory pricing or misuse of market power, then I
think we're confident that the amendments proposed by the Government will enable us to take those
matters to court in circumstances where in the past we've simply had to put the matters onto the
shelf or into the bottom drawer, as being highly unlikely to ever succeed if they were litigated.

PETER RYAN: Could these new powers extend to petrol pricing, which you've also been taking a very
close look at?

GRAEME SAMUEL: You will note that in our petrol report, we indicated that we were concerned with
some aspects of misuse of market power, provisions in the Trade Practices Act, and in particular,
the Birdsville amendments.

Now I'm pleased to see that the Government are addressing the recommendations contained in the
petrol report, so far as the Birdsville amendments are concerned. And that I think will be
important in removing confusion and uncertainty that may have been created by those amendments when
they were brought into law last September.

ELEANOR HALL: That's the chairman of the ACCC, Graeme Samuel, speaking to our business editor Peter
Ryan.