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Competition law in times of crisis—tackling the COVID-19 challenge: Australian Competition and Consumer Commission

Competition law in times of crisis—tackling the COVID-19 challenge: Australian Competition and... The COVID-19 pandemic has completely changed the economic landscape in Australia and the focus of the Australian Competition and Consumer Commission (ACCC). In recent weeks, I have often been asked ‘will competition survive the current crisis’? I have stated that it must and it will, as it is fundamental for the recovery phase of the crisis. An open, well-functioning economy is essential to the prosperity of all Australians, and such an economy depends completely for its success on robust competition. This short note explores the ACCC’s response to the challenges posed by COVID-19, which have led to many ‘crisis collaborations’ across sectors in the Australian economy. I. THE ACCC’S RESPONSE: TIMELY, TARGETED, AND TEMPORARY Australia’s whole-of-government response to the COVID-19 pandemic has been to adopt timely, targeted, and temporary measures to support the economy. This general approach is also the guiding principle of the ACCC’s response. All the ACCC’s measures in response to the crisis are temporary; they will cease with its passing. We hope and expect that most households and businesses can, with the assistance being provided by government, get through the period ahead, and quickly resume business and life as usual, post-crisis. The ACCC’s immediate response to the crisis is two-fold; authorization of crisis collaboration between competitors when this is necessary and the establishment of the ACCC’s COVID-19 Taskforce to tackle immediate harmful consumer problems arising from the crisis. II. INTERIM AUTHORIZATIONS First, the ACCC is working to process applications from competing businesses to authorize collaborative activity that would ordinarily be anticompetitive. The ACCC has the ability to do this under Australia’s national competition legislation, where the likely public benefit from the activity outweighs the likely public detriment.1 In normal times, of course, co-ordination leads to complacency, inefficiency, and higher prices. At a time of crisis such as in war or the present pandemic, co-ordination can generate a net public benefit, being both efficient and carrying little or no risk of public harm. The ACCC has, for example, authorized banks to jointly provide debt relief to borrowers, supermarkets to coordinate supply to ensure that their shelves are stocked with groceries, and medical equipment manufacturers to boost the supply and manufacture of equipment.2 This work has become a priority of the ACCC and has required the agency to adjust its staffing and work streams accordingly. Numerous applications have been lodged with the ACCC from all sectors of the economy, including telecommunications, airlines, and electricity generation. Where they are an appropriate response to this crisis the ACCC is working with companies to shape their applications, and approving them generally within one to two days on an interim basis. The ACCC may review and revoke these interim authorizations at any time, including in response to industry feedback and public consultations. There are many benefits to these authorizations. Competitors have been able to co-operate as they need to, almost immediately. Businesses are free from any risk of legal action from both the ACCC and private parties; the ACCC views general statements of regulatory forbearance as much less certain for both businesses and consumers. Under Australia’s authorization regime, the ACCC can ensure price-fixing and other anticompetitive activities remain outside the scope of any authorized activity. When the crisis is over, these authorizations can be revoked. Importantly, the crisis collaborations are transparent and for this reason, the ACCC can actively monitor their unwinding after the crisis. III. THE ACCC COVID-19 TASKFORCE While the ACCC continues to deliver on pre-existing priorities or essential work, like so many organizations, there has been a reprioritizing of work and resources. We also have over 97 per cent of employees working from home each day, utilizing and building on our pre-existing ‘work from home’ protocols. The ACCC established a COVID-19 Taskforce to rapidly respond to a large number of issues impacting Australian consumers and businesses as a result of the pandemic. This includes responding to the thousands of phone calls, emails, and social media reports from consumers and businesses seeking information. The COVID-19 Taskforce is focusing on early intervention by engaging directly with businesses, relevant state and federal government agencies, and consumer and other representative groups. The ACCC is working to address immediate problems facing consumers due to the cancellation of services and failure of many businesses to provide refunds and remedies. The COVID-19 Taskforce has contacted numerous businesses, including gyms, travel companies, and event payment processors to advise of their obligations and, if necessary, change their approach. Additionally, the ACCC has been providing warnings about the inevitable scams and misinformation appearing online. The agency has also been addressing poor behaviour, including price gouging through advocacy as, understandably, we have no powers of enforcement in this area. While the ACCC has no role in setting prices, we can act where we find the conduct to be unconscionable, or where statements regarding prices are misleading. The COVID-19 Taskforce has also contacted major platforms to encourage them to take down ads for excessively priced hand sanitizer, toilet rolls, and other essential products, and found a willingness to cooperate. IV. CONCLUSIONS It remains unclear how long this crisis will last. The ACCC views its role as providing assistance through sensible but clearly temporary measures to ensure that critical goods and services are available, and that industries provide appropriate relief measures. Once health experts recommend the relaxation of restrictions, there will be a much-needed increase in demand across the economy and all temporary measures can be removed. I believe that the ACCC’s work during this crisis will limit the damage to businesses and people and ensure competition is restored so the recovery is as swift as possible. Acknowledgement The author thanks Connor Hogg and Alex McGregor for their helpful assistance. Footnotes 1 Competition and Consumer Act 2010 (Australian Commonwealth). 2 See ACCC, ‘Authorisations Register’ (2020) <https://www.accc.gov.au/public-registers/authorisations-and-notifications-registers/authorisations-register> accessed 15 April 2020. © The Author(s) 2020. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Antitrust Enforcement Oxford University Press

Competition law in times of crisis—tackling the COVID-19 challenge: Australian Competition and Consumer Commission

Sims,, Rod
Journal of Antitrust Enforcement , Volume 8 (2) – Jul 1, 2020
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Oxford University Press
Copyright
© The Author(s) 2020. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com
ISSN
2050-0688
eISSN
2050-0696
DOI
10.1093/jaenfo/jnaa029
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Abstract

The COVID-19 pandemic has completely changed the economic landscape in Australia and the focus of the Australian Competition and Consumer Commission (ACCC). In recent weeks, I have often been asked ‘will competition survive the current crisis’? I have stated that it must and it will, as it is fundamental for the recovery phase of the crisis. An open, well-functioning economy is essential to the prosperity of all Australians, and such an economy depends completely for its success on robust competition. This short note explores the ACCC’s response to the challenges posed by COVID-19, which have led to many ‘crisis collaborations’ across sectors in the Australian economy. I. THE ACCC’S RESPONSE: TIMELY, TARGETED, AND TEMPORARY Australia’s whole-of-government response to the COVID-19 pandemic has been to adopt timely, targeted, and temporary measures to support the economy. This general approach is also the guiding principle of the ACCC’s response. All the ACCC’s measures in response to the crisis are temporary; they will cease with its passing. We hope and expect that most households and businesses can, with the assistance being provided by government, get through the period ahead, and quickly resume business and life as usual, post-crisis. The ACCC’s immediate response to the crisis is two-fold; authorization of crisis collaboration between competitors when this is necessary and the establishment of the ACCC’s COVID-19 Taskforce to tackle immediate harmful consumer problems arising from the crisis. II. INTERIM AUTHORIZATIONS First, the ACCC is working to process applications from competing businesses to authorize collaborative activity that would ordinarily be anticompetitive. The ACCC has the ability to do this under Australia’s national competition legislation, where the likely public benefit from the activity outweighs the likely public detriment.1 In normal times, of course, co-ordination leads to complacency, inefficiency, and higher prices. At a time of crisis such as in war or the present pandemic, co-ordination can generate a net public benefit, being both efficient and carrying little or no risk of public harm. The ACCC has, for example, authorized banks to jointly provide debt relief to borrowers, supermarkets to coordinate supply to ensure that their shelves are stocked with groceries, and medical equipment manufacturers to boost the supply and manufacture of equipment.2 This work has become a priority of the ACCC and has required the agency to adjust its staffing and work streams accordingly. Numerous applications have been lodged with the ACCC from all sectors of the economy, including telecommunications, airlines, and electricity generation. Where they are an appropriate response to this crisis the ACCC is working with companies to shape their applications, and approving them generally within one to two days on an interim basis. The ACCC may review and revoke these interim authorizations at any time, including in response to industry feedback and public consultations. There are many benefits to these authorizations. Competitors have been able to co-operate as they need to, almost immediately. Businesses are free from any risk of legal action from both the ACCC and private parties; the ACCC views general statements of regulatory forbearance as much less certain for both businesses and consumers. Under Australia’s authorization regime, the ACCC can ensure price-fixing and other anticompetitive activities remain outside the scope of any authorized activity. When the crisis is over, these authorizations can be revoked. Importantly, the crisis collaborations are transparent and for this reason, the ACCC can actively monitor their unwinding after the crisis. III. THE ACCC COVID-19 TASKFORCE While the ACCC continues to deliver on pre-existing priorities or essential work, like so many organizations, there has been a reprioritizing of work and resources. We also have over 97 per cent of employees working from home each day, utilizing and building on our pre-existing ‘work from home’ protocols. The ACCC established a COVID-19 Taskforce to rapidly respond to a large number of issues impacting Australian consumers and businesses as a result of the pandemic. This includes responding to the thousands of phone calls, emails, and social media reports from consumers and businesses seeking information. The COVID-19 Taskforce is focusing on early intervention by engaging directly with businesses, relevant state and federal government agencies, and consumer and other representative groups. The ACCC is working to address immediate problems facing consumers due to the cancellation of services and failure of many businesses to provide refunds and remedies. The COVID-19 Taskforce has contacted numerous businesses, including gyms, travel companies, and event payment processors to advise of their obligations and, if necessary, change their approach. Additionally, the ACCC has been providing warnings about the inevitable scams and misinformation appearing online. The agency has also been addressing poor behaviour, including price gouging through advocacy as, understandably, we have no powers of enforcement in this area. While the ACCC has no role in setting prices, we can act where we find the conduct to be unconscionable, or where statements regarding prices are misleading. The COVID-19 Taskforce has also contacted major platforms to encourage them to take down ads for excessively priced hand sanitizer, toilet rolls, and other essential products, and found a willingness to cooperate. IV. CONCLUSIONS It remains unclear how long this crisis will last. The ACCC views its role as providing assistance through sensible but clearly temporary measures to ensure that critical goods and services are available, and that industries provide appropriate relief measures. Once health experts recommend the relaxation of restrictions, there will be a much-needed increase in demand across the economy and all temporary measures can be removed. I believe that the ACCC’s work during this crisis will limit the damage to businesses and people and ensure competition is restored so the recovery is as swift as possible. Acknowledgement The author thanks Connor Hogg and Alex McGregor for their helpful assistance. Footnotes 1 Competition and Consumer Act 2010 (Australian Commonwealth). 2 See ACCC, ‘Authorisations Register’ (2020) <https://www.accc.gov.au/public-registers/authorisations-and-notifications-registers/authorisations-register> accessed 15 April 2020. © The Author(s) 2020. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)

Journal

Journal of Antitrust Enforcement – Oxford University Press

Published: Jul 1, 2020

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