Labor rejects competition effects test

The federal opposition says a new competition 'effects test' would have businesses constantly worrying about being taken to court and hurt consumers.

The federal opposition says a competition 'effects test' would risk pushing up the price of goods. (AAP)

Shadow treasurer Chris Bowen says the introduction of an "effects test" would risk pushing up the price of goods such as groceries.

The federal government is considering the competition test, which its backers say would limit the market power of retail giants and help smaller businesses get ahead.

"This is bad for business, bad for confidence, bad for investment and bad for Australian customers and families," Mr Bowen told reporters in Sydney.