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Price Signalling: long history, Labor inaction

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The Hon Bruce Billson, MP Shadow Minister for Small Business, Competition Policy and Consumer Affairs

Member for Dunkley

Price Signalling - Long History, Labor Inaction


The Coalition’s Private Members’ Bill to give the ACCC new powers to tackle ‘price signalling’ is real action to address a gap in the competition policy tool kit after years of Government talk and inaction.

The ACCC’s 2007 Report into the price of unleaded petrol identified how the current trade practices law was unable to deal with the co-ordination of pricing between competitors in the absence of an arrangement or understanding to act on this information.

The Commission recommended changes to the law to redefine ‘understanding’ and in its March 2008 response, the Labor Government said it would give careful consideration to the ACCC’s proposed amendments to the Trade Practices Act.

In early 2009, Treasury produced a Discussion Paper on the meaning of ‘Understanding’ in the Trade Practices Act and 15 submissions were received by the end of March.

Inadequate powers to tackle price co-ordination and the absence of US or EU-style competition tools which treat price signalling as cartel-style behaviour was again identified by the ACCC as a concern when the Commission opposed Caltex’s mid-2009 plan to purchase more than 300 Mobil retail outlets.

The ACCC again pressed for ‘price signalling’ powers in its December 2009 Monitoring of the Australian Petroleum Industry Report.

Considerable media commentary and scholarly examination of the calls by the ACCC for additional powers has been published in recent years. Most favour a more direct approach to tackling anti-competitive ‘price signalling’ behaviour over expanding what a cartel-style ‘understanding’ could include.

As recently as August this year, ACCC Commissioner Dr Jill Walker was still making the case that this ‘gap in the law’ needed to be addressed by ‘a European-type prohibition against facilitating or concerted practices to directly target the practices of concern’.

This is what the Coalition’s considered approach and Private Members Bill will do by giving the ACCC new powers to investigate ‘price signalling’ concerns where the private exchange of information between competitors and public disclosure of information with the purpose or effect of lessening competition.

The Gillard Government’s refusal to act was designed to protect its over-blown boast that it had ‘already undertaken the most comprehensive reform of the (Trade Practices) Act’ and false claim that

there is no scope to improve the competition framework and ‘tool kit’ in response to the Coalition’s election commitment for an independent review of current trade practices laws and their application.

The Government failed to take any real action to equip the ACCC with the powers it needs to tackle anti-competitive ‘price signalling’ needs and this is why the Coalition is doing the hard work to support consumers and small business people Labor refuses to do.