What Do Australian Businesses Really Think of the ACCC, and Does it Matter?
| Date | 01 June 2007 |
| Author | Christine Parker,Vibeke Lehmann Nielsen |
| DOI | 10.22145/flr.35.2.2 |
| Published date | 01 June 2007 |
| Subject Matter | Article |
WHAT DO AUSTRALIAN BUSINESSES REALLY THINK OF
THE ACCC, AND DOES IT MATTER?
Christine Parker* and Vibeke Lehmann Nielsen†
INTRODUCTION
There is no doubt that the Australian Competition and Consumer Commission
('ACCC') has provoked very strong opinions among big business in Australia. This
criticism reached its height in 2002 and 2003, at the end of Professor Allan Fels' period
as Chairman of the Commission.1 At this time, the Chief Executive Officers of a
number of Australia's biggest companies regularly and publicly criticised the ACCC,
and Professor Fels himself, for being 'unfair, unjust and immoral', and having no 'line
of accountability at all.'2 The ACCC's behaviour was criticised for being 'a corruption
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* Australian Research Fellow, Faculty of Law, The University of Melbourne.
† Associate Professor, Department of Political Science, University of Aarhus. The authors
wish to thank John Braithwaite and DataCol International (especially Malcolm Mearns) for
helping set up and administer the empirical research on which this article is based. Thanks
also to Natalie Stepanenko for assisting with most of the qualitative interviews for this
research and other research assistance, and also to Zoe Jackson for research assistance and
to Julia Black and John Braithwaite for comments on an earlier draft. We also thank the
ACCC (through its support for the Centre for Competition and Consumer Policy,
Australian National University), the Australian Research Council and the Regulatory
Institutions Network, Australian National University for funding this research. Substantial
parts of the original research for this article were completed while both authors were on
secondment at the Regulatory Institutions Network, Australian National University and
later while Dr Christine Parker was a Visiting Fellow at the Centre for Socio-Legal Studies,
University of Oxford.
1 The business complaints resulted in the federal government commissioning an extensive
independent review of the Trade Practices Act 1974 (Cth) ('TPA') and the way it had been
administered by the ACCC: Trade Practices Act Review Committee, Review of the
Competition Provisions of the Trade Practices Act (2003) ('Dawson Review'). It also may have
led to the federal government offering Professor Fels a shorter second term as Chair of the
ACCC: see Fred Brenchley, Allan Fels: A Portrait of Power (2003) 214–15. Professor Fels
himself, however, commented that, given the amount of business lobbying against him, he
was surprised that he had lasted as long as he did: 'Allan Fels Surprised He Lasted So Long
at the ACCC', Australian Associated Press Financial News Wire (Sydney), 29 June 2003.
2 Quotations from Dick Warburton, Chairman of Caltex, and Roger Corbett, CEO of
Woolworths, respectively: reported in Ross Gittins, 'Perhaps This is Why Big Business is
Ganging Up on Allan Fels', The Age (Melbourne), 10 July 2002, 13. See also Brenchley, above
n 1, 22, 143, 211–36 for further instances of private and public business lobbying of
government against Professor Fels and the ACCC. For allegations by business leaders that
188 Federal Law Review Volume 35
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of administration of the Trade Practices Act', 'false and misleading behaviour on the part
of the cop', and for using publicity 'in a way that damages companies before they are
proven guilty'.3 One chief executive said that 'Fels' use of the media … smacks of the
Gestapo.'4 Another called Fels a 'smiling assassin' who had inflicted 'irreparable harm
to the Australian economy.'5 Professor Fels was described as 'a maverick autocrat
whose overzealous application of merger law retards companies' ability to grow big
enough at home to compete in a globalised marketplace';6 and big business argued that
the ACCC needed to give Australian businesses much more freedom to merge with
one another in order to achieve 'scale' so that they could export overseas, and Australia
could avoid the fate of becoming a 'branch economy'.7
On the other hand, according to Professor Fels himself, big business will always
criticise an effective regulator: 'There is always deep resentment when we prosecute or
block mergers or cut prices, no matter how strong the justification.'8 According to him,
the ACCC was merely bringing competition and consumer law enforcement strategies
'into line with North American standards', and debate should be less about 'the
restrictions that should exist to protect business against an allegedly zealous regulator'
and more about 'the greater danger that there are few safeguards for business or the
public against a tame regulator.'9 Indeed, at previous times in its history, the ACCC's
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the ACCC used 'its position of strength to "bully" business into complying with its
directives without necessarily sticking to the formal legal process', see House of
Representatives Standing Committee on Economics, Finance and Public Administration,
Parliament of Australia, Competing Interests: Is There Balance? Review of the Australian
Competition and Consumer Commission Annual Report 1999–2000 (2001) 41.
3 David Murray, CEO of the Commonwealth Bank, and Geoff Dixon, CEO of Qantas,
reported in Gittins, above n 2.
4 Damon Kitney and Katharine Murphy, 'Big Business Steps Up Attack on ACCC', The
Australian Financial Review (Sydney), 13 May 2002, 1, quoting a 'leading Australian chief
executive, who declined to be named'.
5 Gerry Harvey, CEO of the Harvey Norman chain of retailers, quoted in Christian Catalano,
'Gloves Off as Retailer Hits Out', The Age (Melbourne), 30 June 2003, 2. Harvey went on to
say: 'I think he is egotistical, I think he is a megalomaniac … I think that he is the most
powerful man in Australia … In the years to come he will be judged, and others that are
intimidated at the moment will speak out and say what they really think.'
See also Richard Gluyas, 'A Last Mauling for Retiring Watchdog Fels', The Australian
(Sydney), 30 June 2003, 29.
6 Cameron Stewart, 'Making Markets Add Up', The Weekend Australian (Sydney), 8–9 June
2002, 21.
7 Brenchley, above n 1, 220. See criticisms of the ACCC's approach to mergers at 220–9; Trade
Practices Act Review Committee, above n 1, 43–71; Toni O'Loughlin, 'Process Slow But Not
Too Tough', The Australian Financial Review (Sydney), 17 April 2003, 5. Cf Alan Dignam,
'The Role of Competition in Determining Corporate Governance Outcomes: Lessons from
Australia's Corporate Governance System' (2005) 68 Modern Law Review 765.
8 Professor Fels in Malcolm Maiden, 'The Bell Tolls for Fels at ACCC Kennel', Business and
Money, The Age (Melbourne), 21 June 2003, 1. Elsewhere Professor Fels was reported as
having commented about Gerry Harvey's criticisms of him (quoted above): 'Professor Fels
said Mr Harvey had been "totally uncooperative" during every step of the ACCC's
proceedings against his company, and had dragged the inquiry to exhaustive lengths':
Catalano, above n 5.
9 Allan Fels, 'ACCC Needs Support From the Top', The Australian Financial Review (Sydney),
30 June 2003, 55. Professor Fels was also quoted as saying: 'Some business people are
2007 What do Australian Businesses Really Think of the ACCC? 189
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predecessor, the Trade Practices Commission, was more frequently, and justifiably,
criticised for being too lame than too game.10
After Professor Fels' retirement in the middle of 2003, big business was looking
forward to a 'less aggressive and more conciliatory' ACCC under the Chairmanship of
Graeme Samuel.11 The Australian Chamber of Commerce and Industry welcomed the
announcement of the appointment of Mr Samuel as someone who had 'a deep
understanding not just of how business works, but also of the kind of institutional
environment which businesses need if they are to operate successfully.'12 A year after
Mr Samuel's appointment, The Australian Financial Review was citing reports that the
ACCC had 'gone soft'.13 Mr Samuel himself said that 'the ACCC had backed away
from litigation as the main means of enforcing the law' and that 'education and
publicity programs were a much more effective way of protecting consumers from the
anti-competitive behaviour of major companies.'14 By 2006, the Business Review Weekly
reported that there had been a 58 per cent decrease in the number of court cases
brought by the ACCC over the previous four years.15
This paper reports systematic, representative quantitative evidence collected from
mid–2004 to mid–2005 on how large Australian businesses perceive the ACCC as a
regulator. Is it seen as wielding a credible deterrent threat? Is the Commission seen as
fair, flexible and accommodating, or rigid and stigmatising? Is it seen as strategically
sophisticated? And why would it matter?
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throwing a trial-by-media slogan at practices that are quite normal in the field of law
enforcement': Kitney and Murphy, above n 4.
10 See, eg, Robert Baxt, 'Thinking About Regulatory Mix — Companies and Securities, Tax
and Trade Practices' in Peter Grabosky and John Braithwaite (eds), Business Regulation and
Australia's Future (1993) 117, 118; Peter Grabosky and John Braithwaite, Of Manners Gentle:
Enforcement Strategies of Australian Business Regulatory Agencies (1986) 91; Stuart Simpson,
'Keeping Business Honest: Trade Practices Commission Runs Lame', The National Times
(Sydney), 17–23 October 1982, 41; V G Venturini, Malpractice: The Administration of the
Murphy Trade Practices Act (1980).
11 Miranda McLachlan, 'Section 46 to be Samuel's Big Test', The Australian Financial Review
(Sydney), 4 July 2003, 15. See also 'Use it Properly', The Newcastle Herald (Newcastle), 2 July
2003, 8. One of our survey respondents commented in their answer to an open-ended
question at the end of the survey (see below n 60):
With the appointment of a new head of the ACCC, I believe businesses are reassured
that the approach of the ACCC is more reasonable and less media hungry or keen to
grab headlines. A more considered and conciliatory approach seems to be evident
which in turn encourages openness by business.
This sentiment was repeated in several other comments.
12 Laura Tingle and Mark Skulley, 'ACCC Posting Signals Policy Shake-Up', The Australian
Financial Review (Sydney), 11 October 2002, 10.
13 Toni O'Loughlin, 'Competition Regulator Has Lost its Hard Edge: Dossier', The Australian
Financial Review (Sydney), 4 June 2004, 29.
14 But he also pointed out that the ACCC was investigating up to 40 cartels, among other
things: Toni O'Loughlin, 'ACCC Boss Backs Away from Litigation', The Australian Financial
Review (Sydney), 4 June 2004, 1. See also Graeme Samuel, 'Heal Thyself: Voluntary
Compliance is Much Better than Prosecution', BRW (Melbourne), 9 October 2003, 50.
15 Adele Ferguson and Kristen Le Mesurier, 'The Red-Tape Stranglers', BRW (Melbourne), 7
September 2006, 42, 44. Chair Graeme Samuel was reported as saying that 'he is litigating
less but with "sharper" force': at 44.
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