Andrew Murray (WA, Australian Democrats) Share this | Hansard source

I move Democrat amendment (10) on sheet 5324 revised:

(10)  Schedule 2, page 6 (after line 12), after item 3, insert:

3G  After section 81A

Insert:

81B   Divestiture for abuses of market power

• (1)The Court may, on the application of the Commission, if it finds that a corporation has contravened section 46, by order, give directions for the purpose of securing the reorganisation or division of the corporation into separate and distinct entities including directions for the disposal or divestiture of all or any of the shares in or assets of the corporation to facilitate the reorganisation or division of the corporation.

This amendment relates to divestiture provisions for the abuse of market power. It has been drafted to deal with section 46 because that is the direction taken by the majority Senate report which I referred to earlier. The chamber is well aware, because it has heard me on the matter before, that I do in fact admire the general intent of the American antitrust and divestiture provisions. As a reserve power, they have been extremely effective and act to allow for circumstances where great power, used for anticompetitive or monopolistic purposes, can be reduced. I think that is an appropriate tool for the ACCC to have. The Senate committee report stated:

Divestiture powers are powers which enable a Court to order that a dominant corporation be broken up into several smaller corporations in order to prevent the anticompetitive domination of a market by one player.

Such powers are currently available under s.81 of the Act, but cannot be applied to creeping acquisitions, nor to offences under s.46.

I remind the chamber that my amendment deals with section 46. The report continues:

The Committee considers that the application of s.81 should be expanded, so that divestiture becomes a remedy for other breaches of the Act, including section 46 (Misuse of market power) and any new section introduced in line with the Committee’s recommendation 12 (relating to the regulation of creeping acquisitions).

As divestiture is a quite severe remedy, it is appropriate to provide “warning mechanisms” to ensure that a corporation which is expanding its business is able to comply with its obligations under the Act. A suitable warning mechanism could be based around a “trigger” market concentration.

This trigger should not operate as a de facto cap on market share. Rather it would require companies proposing acquisitions in concentrated industries to notify the ACCC. The Commission would then assess whether the acquisition would result in a substantial lessening of competition. The Committee notes that this already occurs in the retail grocery industry.

The recommendation of the committee was as follows:

The Committee recommends that s.81(1) of the Act be amended so that s.81 can be applied where a corporation is found to have contravened section 46, section 46A, or any new section introduced to regulate creeping acquisitions.

I have attempted to move towards fulfilling the legislative environment which that recommendation anticipates.