ACCC Chair Rod Sims delivered a keynote address to the RBB Economics Annual Conference in Sydney today, debating whether competition law’s purpose should be expanded in light of the “hipster anti-trust” movement.
“For the last few decades there has been a broad consensus among those in the antitrust community around the world that competition law should promote some concept of “consumer welfare”; that competition law is primarily about making markets work for consumers,” ACCC Chair Mr Sims said.
“This has also been the position in Australia.”
Mr Sims said the foundations of competition law, or “antitrust law” as it is called in the United States, were now being called into question, with some commentators calling for its objectives to be broadened to public policy issues such as income inequality, protection of democracy, financial stability or promotion of environmental outcomes.
“At its heart, the hipster antitrust movement is a critique of the consumer welfare standard,” Mr Sims said.
Mr Sims spoke at length regarding the history of competition law, and his opposition to introducing broader public interest considerations into the core of competition law enforcement.
“In my view, it is inadvisable and counterproductive to import these considerations into the core of competition. Competition law and policy should be first and foremost about protecting and promoting competition for the welfare of consumers.”
“Just because an instrument is targeted at one objective, however, does not mean it cannot benefit other objectives. I strongly believe, for example, that properly applied competition law can greatly assist income distribution; but this is a significant side benefit. We are not solving for income distribution and there are much better instruments to use to do this (such as the tax and welfare systems),” Mr Sims said.
Other public policy issues should be addressed with their own policy instruments, Mr Sims said. “It is bad public policy to attempt to achieve these goals with the single instrument of competition or consumer policy.”
Mr Sims said the debate about competition law was valuable, but would not change the ACCC’s approach. “We at the ACCC believe in the power of competition to deliver good outcomes for consumers and for the Australian economy. Virtually all of what the ACCC does fits neatly within a framework of promoting consumer welfare and making markets work for consumers,” Mr Sims said.
“If consumers are to be harmed by laws we can enforce, we will act, and strongly.”
“The current debate about the foundation of competition law is valuable and intellectually important, but it will not change what we at the ACCC do.
“This does not mean we will not be vocal advocates for any need for change in the law given evolving circumstances or judicial interpretation. It does mean that our objective is clear,” Mr Sims said.
The full transcript of the speech is available on the ACCC website.