Outgoing ACCC boss Rod Sims has warned that weak market regulations could push people toward populist solutions. 

Big market players often feign a desire for ‘increased competition’, but their lobbying efforts go the other way; seeking to close off threats and allow them to swallow competitors with no resistance. 

Similarly, politicians seek to secure votes by appearing in favour of small business, while yielding to the desires of big businesses and their generous donations.

In the middle of this, regulators like the Australian Consumer & Competition Commission (ACCC) are often criticised when they take big businesses to court and fail, while also copping flak for being toothless and lazy. 

Long-standing ACCC boss Rod Sims (whose appointment as ACCC chair finishes on March 20) has reflected on this dichotomy in an address to the National Press Club. 

“When I arrived at the commission [11 years ago] I mentioned my main objective in chairing the commission was ‘that Australians see that a market economy and strong competition work for them and that they see the commission working tirelessly for the long-run interests of consumers’,” he said.

“We must recognise that a market-based economy is fragile, as its organising principle relies on companies and businesspeople pursuing their own self-interest. This is not an obvious way to organise things.

“For this to work to the benefit of all Australians requires, at a minimum, strong competition between firms and strong enforcement of the Competition and Consumer Act.

“In our society, large established businesses have a strong voice, which is not surprising as the largest firms employ many people and supply Australians with many of their needs.

“Often, however, the understandable interest of large established businesses in short-term advantage sees them, I believe, work to the disadvantage of their own long-term interests,” he said.

Mr Sims says big established businesses opposed all of the central changes to the Competition Act when they were introduced, especially laws against misleading and deceptive conduct.

“I would ask, however, how many specific interventions and extra red tape would we now have that would damage our market economy, if we did not have this general provision?”

“Perceptions of unfairness and inequity will see faith in a market economy eroded,” he warned.

One example is the proposed tightening of merger law, which has been slammed by the top end of the business sector. 

“Large established businesses and their advisers will oppose these changes, but my guess is that well over 90 per cent of Australians would support them,” Mr Sims said. 

“Further, I think such changes would strengthen our market economy, and would benefit the vast majority of Australian businesses.” 

When he took over the ACCC in 2011, it had a near-perfect success rate in court actions. Mr Sims says this suggested the regulator was too cautious in its efforts to enforce the law.

As he ends his time at the ACCC, he says it now has “a good win/loss record, including recent guilty pleas in cartel cases, including by individuals in two criminal cases”.

This “includes creative wins against companies such as Trivago (where we unpicked its algorithm) and Google, and we have seen penalties imposed by the courts for breaches of the Act increase from $1 million being seen as high, to recent penalties of $50 million against Telstra, $125 million against VW, and $153 million against AIPE, a vocational education provider.” 

The new ACCC chair Gina Cass-Gottlieb will formally take over the role in coming weeks. 

Mr Sims says he is not retiring just yet, and will continue to push for competition reform, having been appointed by the International Competition Network (ICN) as the new Vice Chair Digital Co-ordination and Asia-Pacific Liaison.