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senate vote 2017-08-14#5
Edited by
mackay staff
on
2023-11-03 10:11:14
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Title
Bills — Competition and Consumer Amendment (Misuse of Market Power) Bill 2017; in Committee- Competition and Consumer Amendment (Misuse of Market Power) Bill 2017 - in Committee - Agree with the bill
Description
<p class="speaker">Peter Whish-Wilson</p><p>I move Australian Greens amendment to the Competition and Consumer Amendment (Misuse of Market Power) Bill 2017 on sheet 8190:</p><p class="italic">(1) Schedule 2, page 8 (line 1) to page 13 (line 8), omit the Schedule, substitute:</p><p class="italic">Schedule 2—Telecommunications industry</p><p class="italic"><i>Competition and Consumer Act 2010</i></p><p class="italic">1 Paragraph 151AJ(3)(a)</p><p class="italic">  Omit "45B, 46,".</p><p class="italic">2 Subsections 151AJ(4) and (5)</p><p class="italic">  Omit "45B, 46,".</p><p class="italic">3 Paragraph 151AJ(5)(a)</p><p class="italic">  Repeal the paragraph, substitute:</p><p class="italic">  (a) the assumption that subparagraphs 45(3)(a)(ii) and (b)(ii) had not been enacted;</p><p class="italic">4 Paragraphs 151AJ(5)(c) and (d)</p><p class="italic">  Repeal the paragraphs.</p><p class="italic">5 Subsection 151AJ(7)</p><p class="italic">  Omit "45B, 46,".</p><p class="italic">6 Paragraph 151AJ(7)(d)</p><p class="italic">  Repeal the paragraph.</p><p class="italic">7 Subsections 151BC(4) and (5)</p><p class="italic">  Repeal the subsections.</p><p>There is one amendment to this bill. It relates to schedule 2, on the telecommunications industry.</p><p>Just a little bit of background: the Competition and Consumer Act currently includes an effects test for the telecommunications industry, as well as giving the ACCC greater powers of intervention and the ability to issue competition notices against misuse of market power in the telecommunications industry. The bill before us tonight proposes to remove both these existing provisions on the grounds of duplication. Our amendment retains these powers.</p><p>Let me explain a little more about the existing provisions that are currently in place and why we wish to retain these. Division 2 of part XIB sets out the telecommunications-specific competition rule which prohibits a carrier or carriage service provider—called a CSP—from engaging in anticompetitive conduct. Essentially, this is an effects test applying only to the telecommunications market. Let's make this point very clear: we have, for all intents and purposes, an effects test in the telecommunications market right now. And let me make this point clear: stakeholders in the telecommunications industry have been knocking on our door, as I am sure they have on other senators' and MPs' doors, asking us to maintain the effects test as it stands—and I will call it an effects test—because it works for them and they have confidence in it.</p><p>My third point, to make it very clear, is that, if you support the Greens amendment tonight to retain this because you recognise that the telecommunications industry likes what's in there now and thinks it works, on principle you support an effects test—a broader effects test for other industries. Let's make that very clear.</p><p>What we have at the moment is an effects test applying only to the telecommunications market. Division 3 of part XIB grants the ACCC power to issue competition notices in respect of a contravention to the competition rule. That's called division 2. There are two types of competition notices, part A and B notices, that differ with regard to the particulars of the contravening conduct that the ACCC must include. The issuing of a competition notice requires a carrier or CSP to cease engaging in the identified anticompetitive conduct subject to high potential fines. Division 3 also allows for a person to apply to the ACCC for an order exempting specified conduct for the scope of the anticompetitive conduct provisions in division 2. Overall, by providing for the issuing of competition notices, division 3 enables the ACCC to respond quickly to anticompetitive conduct in the sector.</p><p>It is interesting to note also tonight, that Telstra is the only body that is calling for the removal of the ACCC's current intervention powers. We believe they should be retained because not only is the industry firmly of the view that they have worked and they are very confident in them but they give the ACCC the capacity to intervene early in the piece should they see potential misuse of market power. Further, given the rapidly-developing and asymmetrical nature of the telecommunications industry, the retention of the existing provisions is prudent.</p><p>I will finish by saying that I hope the Senate can support this amendment. I understand the government will be supporting our amendment tonight, and I thank them for this. I understand that Senator Xenophon will be supporting the amendment. I'm not sure about the other crossbenchers and I'm not sure of Labor's position. I'm guessing they won't be supporting this because this is an effects test—an effects test that seems to work and has the industry engaged and out there lobbying for it to be retained. I thank the government for their flexibility on this. We were working very closely with the telecommunications industry. This was a sticking point for them and for some senators in the Greens, and we thank them for keeping this in place. It's a very powerful symbol that an industry, like the telecommunications industry, believes that an effects test is effective, hence the logic for us transferring this more generally to section 46 for other industries' potential misuse of market power. It's what the ACCC have been asking for.</p> <p class="speaker">Mathias Cormann</p><p>The government will indeed be supporting this Greens amendment. This amendment will replace schedule 2 in the bill with a new schedule. The new schedule will retain the telecommunications-specific anticompetitive conduct provisions in part XIB but stop the new broader section 46 flowing through to that part. As introduced, the bill sought to repeal the anticompetitive conduct provisions in part XIB in light of the introduction of the broader and stronger general misuse of market power law in section 46. With the strengthening of section 46, it would not have been necessary to apply part XIB because section 46 effectively supersedes the competition law rule in XIB. It would also be inappropriate for section 46 to flow through unimpeded to part XIB because of the unique and heavy-handed enforcement mechanisms in part XIB.</p><p>Competition notices, which can result in significantly higher pecuniary penalties and the reversal of the onus of proof, are designed for a completely different legal trigger. Our view is that a strengthened section 46 will be able to address any misuse of power in the telecommunication industry. In addition, the Australian Competition and Consumer Commission continues to retain other targeted powers to deal with competition concerns in telecommunications. However, it has also become clear that the repeal of the part XIB rules is not supported by all senators. Given this, the government will support the alternative approach developed by the Greens. This retains the part XIB provisions but stops the new section 46 flowing through to part XIB. This approach will leave part XIB largely in place as it stands, with its own additional enforcement provisions but linked to the existing lower effects test. However, the new section 46 will not be enforceable using the disproportionate enforcement mechanism in part XIB. The amendment does not change the new section 46, which will apply to all sectors of the economy.</p> <p class="speaker">Katy Gallagher</p><p>Labor will be supporting the Greens amendment despite the very ungenerous speech by Senator Whish-Wilson. Coming from a party that just reversed its position on the amendment that Senator Xenophon moved around access to justice compared to their position last week, it was very ungenerous to then stand up and start attacking Labor when we are prepared to support your amendment, Senator Whish-Wilson—despite our overall concerns about the bill as a whole, and which we remain opposed to.</p><p>To just pick up on your argument, I would pose this question. If the amendment that you are moving is accommodated in the bill that the government has introduced, and extrapolating your argument that by supporting your amendment we obviously support the effects test, then my question would be: why are you moving this amendment? If this is dealt with under the government's bill, then why the need for the specific amendment that you are moving, Senator Whish-Wilson? It is entirely reasonable for Labor to support this amendment, as you yourself have recognised. You drafted this amendment and you have done a deal with the government, which forced you to oppose the access to justice provisions that you supported last week. Be up-front about it; don't then come swinging at us when we have legitimate reasons to be supporting this amendment as it deals with safeguards in the telecommunications sector, a very specific issue, rather than the much broader application of the section 46 amendment. We are happy to support it. Our position is consistent. By doing so, by supporting it, it does not mean that we will be supporting the broader application of section 46, which we remain opposed to.</p> <p class="speaker">Peter Whish-Wilson</p><p>I can't let that go unchallenged.</p> <p class="speaker">Katy Gallagher</p><p>You can actually.</p> <p class="speaker">Peter Whish-Wilson</p><p>It's interesting—</p><p class="italic">Senator Gallagher interjecting—</p><p>You're screaming blue murder because we didn't support Senator Xenophon's amendment. If you think that's really important, why did you bring your private member's bill in here in the first place? You were trying to put up a smokescreen so you didn't have to vote for section 46. We all know why you didn't vote for section 46, a very comprehensive reform that we have been campaigning on for years. Why bring the private member's bill and waste the Senate's time and money if you thought we were going to get this amendment here tonight? I didn't hear from Senator Xenophon before tonight about his amendment on costs. If I had, we may have had a different considered position. All I know is that we voted on Labor's private member's bill a couple of days ago but that no-one came to see the Greens to support this amendment. Don't accuse us of being hypocrites.</p> <p class="speaker">John Williams</p><p>The question is that Australian Greens amendment (1) on sheet 8190 be agreed to.</p><p>Question agreed to.</p><p>The CHAIR: The question is that the bill, as amended, be agreed to.</p> -
- The majority voted in favour of a [motion](https://www.openaustralia.org.au/senate/?gid=2017-08-14.196.6) to agree with the bill, as amended. This means they can now vote on whether to pass the bill in the Senate.
- ### What does this bill do?
- According to the [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1617a/17bd087) (a document put together by the parliamentary library):
- > *The purpose of the Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 (the Bill) is to amend the Competition and Consumer Act 2010 (CCA) to reflect the Government’s acceptance of certain recommendations of the Competition Policy Review (the Harper Review). Specifically, the Bill introduces changes to section 46 of the CCA which relates to the misuse of market power, namely:*
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- > * *removing the ‘take advantage’ and ‘proscribed purposes’ aspects of the current law*
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- > * *removing explicit references to predatory pricing*
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- > * *introducing a ‘conduct’ test and a ‘purpose, effect, or likely effect’ test*
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- > * *introducing a ‘substantially lessening competition’ test*
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- > * *amending the scope of the markets that misuse of market power is to be subject to*
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- > * *introducing a set of pro-competitive and anti-competitive mandatory factors for courts to apply.*
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- > *The Bill also repeals Divisions 2 and 3 of Part XIB of the CCA which deal with telecommunications-specific anti‑competitive conduct, as a consequence of amending section 46.*
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