Move to tighten market power misuse law

It will be easier to prove market heavyweights are misusing their power to squeeze out competitors under new recommended reforms.

Two words can make all the difference when it comes to proving big business is throwing its might around too much.

The competition watchdog is delighted the Harper review released on Tuesday - the biggest review of the Competition and Consumer Act in more than 20 years - recommends removing the words "take advantage" from the misuse of market power provision.

Australian Competition and Consumer Commission chairman Rod Sims said misuse of market power was the hardest allegation to prove and the key to making the provision effective was deleting those two words.

"The way the courts have interpreted it is you can only be held to have taken advantage if you've done something that a firm without market power could not have done," he told AAP.

"It really renders the clause not very useful because most of the things big firms do to exclude small firms from competition are things that smaller firms could have done ... (but) it wouldn't have had the effect."

Mr Sims said another significant recommendation was to outlaw concerted practices, whereby competitors - banks and petrol retailers, for instance - can exchange information about pricing and won't get into trouble provided they don't reach an explicit agreement.

The ACCC has taken federal court action against petrol giants including Caltex and retailers such as Coles, alleging they regularly exchange information that could be used to signal a price increase.

Master Grocers Association chief executive Jos De Bruin said the need for competition law reform was urgent.

"We don't want it to be just another review that sits on the shelf and is waiting for someone to act upon it," he told reporters in Perth.

"We are very fearful that our politicians do not take this review as seriously as they should.

"The public want competition law reform, they want the ACCC to have more power to adjudicate that.

"We need action as soon as we can get it."

If there was no change, there was a risk consumers would lose choice, prices would go up and the quality of goods would fall.

"We as a community are at risk of small business losing confidence, losing the incentive to ... create business, to create productivity and create employment.

"We can't let big business rule.

"We say to government `please, stop the rhetoric that small business is the backbone of the economy. It's now time to act'."


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Source: AAP


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