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Market monopolies: Democrats secure inquiry to focus on regional market competition in Australia.

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Senator Andrew Murray

Australian Democrats’ Business & Corporate Affairs Spokesperson

9 August 2001 MEDIA RELEASE 01/462

MARKET MONOPOLIES Democrats secure inquiry to focus on regional market competition in Australia Issues affecting competition in regional markets will be the focus an inquiry by the Senate Legal and Constitutional Affairs Committee.

Australian Democrats’ Business and Corporate Affairs spokesperson, Senator Andrew Murray, secured a ‘green light’ for the inquiry that would consider whether the Trade Practices Act 1974 should be amended to increase the power of Australian Competition Consumer Commission (ACCC) when dealing with competition issues in regional markets.

Senator Murray said the committee would examine whether the Act should be amended to:

(a) provide for a reversal of the onus of proof under section 46 in actions brought by the ACCC where it can be first shown that the corporation has a substantial degree of market power and has taken advantage of that power; and

(b) give the ACCC a power to order divestiture when an ownership situation exists that has the effect of substantially lessening competition.

“It’s pretty dry stuff, but it’s important as it effects every household in Australia,” Senator Murray said.

“Proving that there has been abuse of market power by a dominant business has always been notoriously difficult because of the problems in obtaining evidence. The ACCC has agreed that there is merit in considering a reversal of the onus of proof in limited circumstances. The inquiry will investigate that proposal.

“Competition is essential in the retail sector. An example is Cooma in New South Wales. Evidence to an inquiry was that Woolworths was able to buy its only competitor in the regional town. Prices went up after Woolworths secured a monopoly - and that hit every home in Cooma.

“That’s when the ACCC should be able to step-in and order Woolworths to sell one of its stores. It ensures competitive markets are protected.

“I have often expressed my alarm at the diminishing size of the independent retail sector and the implications it has for competition and ultimately, the consumer.

“The Democrats success in securing this inquiry is another step towards the goal of restoring and protecting competition in the Australian marketplace.”

To interview Senator Andrew Murray please contact Ainslee McCallum on (02) 6277 5747 or 0414 957 649.