Andrew Leigh

Labor Will Give Consumers and Small Businesses a Powerful Voice

The competition regulator must formally respond to ‘super complaints’.

A Shorten Labor Government will allow recognised consumer and small business advocacy groups the power to make ‘super complaints’ to the consumer and competition watchdog. The Australian Competition and Consumer Commission would be obliged to investigate and publicly respond to such complaints.

The case for change

• Recent analysis shows that more than half of Australia’s markets are concentrated – meaning that the four largest firms control a third of the market or more.
• Some industries are exceptionally concentrated. In petroleum wholesaling, department stores, banking, health insurance, supermarkets, newspapers, domestic airlines, internet service providers and iron ore mining the four largest firms control more than 80 per cent of the market.
• Increased concentration is often associated with reduced competition, resulting in higher prices and higher inequality, and lower productivity, innovation, investment, quality and consumer choice.
• Concentrated industries have had a range of competition and consumer scandals in recent years, including in banking, insurance, supermarkets, agriculture and fuel retailing.
• The Australian Consumer and Competition Commission has fought and won many court cases. Although the regulator will have constructive relationships with advocacy groups, some issues can get log-jammed for a variety of reasons.
• The most useful element of a super complaints function is the time-limited nature of the process, allowing advocates to kick start issues that may be stuck, including forcing a response from government on matters of public importance.
• Super complaints are a feature of the United Kingdom’s competition framework, and regulators there are required to respond within 90 days to such complaints.
• In the United Kingdom, a number of super complaints have been received by regulators, including about banking, beer supply to pubs, and grocery pricing. Super complaints can lead to enforcement action, enforceable undertakings or agreements in an industry, market studies, or policy advice to government. An example of this is the super complaint and response about bank transfer scams.

What Are Labor’s proposals? How will they work?

• Labor will implement a “super-complaint” function within the Australian Competition and Consumer Commission, based on the mechanism used by the UK Competition and Markets Authority.
• Super complaints confer a right on specified consumer or small business organisations to make a ‘super complaint’ to the regulator.
• The regulator is obliged to investigate the matter and publicly respond to the complaint (including proposed actions as a result) within a specified period of time, which can be extended if warranted by the investigation. Labor will consult stakeholders on appropriate timeframes.
• In order to constitute a super complaint, a reference must relate to widespread concern or conduct in a market and must meet other thresholds in relation to information provision.
• The other thresholds would be: evidentiary (such as incidents of anti-consumer conduct), consumer harm or safety risks, anti-competitive conduct, and/or evidence of widespread concern in the public.
• Only consumer or small business organisations designated by a Treasury Minister, or by Memorandum of Understanding between the Australian Competition and Consumer Commission and an organisation, can make a super complaint.
• The Minister would have the ability to withdraw that designation if an organisation was found to be using the power inappropriately.
• This function is absorbed into the Australian Competition and Consumer Commission’s budget, and complements the significant competition reforms proposed by Labor.

Labor’s record

In Opposition, Labor has announced significant competition measures, including:

• Introducing Access to Justice reforms to Parliament, which helps small businesses take court cases to address anti-competitive conduct.
• Make unfair contract terms illegal to protect small businesses with less than 20 employees or $10 million in revenue, and fines of up to $10 million for breaches.
• Your Car, Your Choice – require car manufacturers to share technical information with independent mechanics on commercially fair and reasonable terms, with safeguards, to ensure independent mechanics can compete on a level playing field, and car owners get the best deal on repairs and servicing.
• Auto Dealership Code - an industry-specific code under the Competition and Consumer Act to deliver clear rules to better regulate negotiations between manufacturers and dealerships.
• Transparent remittance pricing – full fee disclosure on remittances so people can ensure more money is being received by family and friends, rather than skimmed by banks.
• Double the competition regulator’s litigation budget and amend the Competition and Consumer Act to give a truly independent market studies function to the regulator to explore public interest issues such as pricing discrepancies and increased market concentration.