Competition and Consumer Amendment (Tougher Penalties for Supermarket and Hardware Businesses) Bill 2024

High-Level Summary

Amends the Competition and Consumer Act 2010 to enable the court to order the divestiture of assets in certain cases of misuse of market power by supermarket and hardware businesses.


Summary
The bill affects the Competition and Consumer Act 2010 by introducing new section 80B, which allows courts to order the divestiture of assets when large supermarket and hardware businesses are found to have misused their market power, contravening section 46. This amendment aims to promote fair competition by enabling the courts to require the sale of certain assets to address anti-competitive conduct effectively. Divestiture orders can only be made if they are in the public interest, considering factors such as employment impact, access to products or services, and shareholder interests. The bill also limits the standing for divestiture orders to parties involved in a section 46 action and provides the option for voluntary undertakings as an alternative to court-ordered divestiture. From the explanatory memo:
"The introduction of divestiture powers in the Bill creates significant opportunities for new market entrants, fostering a more competitive and dynamic retail environment."

Argument For
Normative Bases
  1. Competition Policy
  2. Consumer Protection

The bill should be supported because it addresses significant competition issues in the supermarket and hardware sectors, which have been identified as oligopolistic. By introducing divestiture powers, the bill provides a structural remedy that can lead to a more competitive marketplace, benefiting consumers through increased choice and potentially lower prices. This intervention is aligned with global best practices, as similar measures have been effective in enhancing competition in other jurisdictions [Judgment]. Additionally, the bill includes a public interest test, ensuring that any divestiture orders consider employment impacts, access to services, and shareholder value, thereby balancing competition with broader societal and economic outcomes.


Argument Against
Normative Bases
  1. Propertarianism
  2. Legal Principle

The bill should be opposed because it grants significant powers to the courts to enforce divestiture, which could be seen as an overreach into private enterprise and property rights. The possibility of forced asset sales might deter investment in the affected sectors, as companies may fear future divestiture actions. Moreover, there are concerns about the courts' capacity to make informed decisions on complex market dynamics, which are usually the domain of competition tribunals or specialized agencies [Judgment]. While the bill includes a public interest test, the subjective nature of these assessments could lead to inconsistent application and uncertainty in the market.


Date:

2024-11-04

Status:

Not Proceeding

Sponsor:

TAYLOR, Angus, MP

Portfolio:

Unspecified

Categories:

Competiton Policy, Consumer Protection, Competition Policy, Trade Policy

Timeline:
04/11/2024
28/03/2025

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