The promise of competition and the responsibility of leadership

Introduction

Good morning, all. I begin by acknowledging the Traditional Custodians of lands, waterways and skies across Australia. I pay my respects to the Wurundjeri Woi-wurrung and Bunurong people, on whose country we meet today, and honour their culture and Elders, past and present. I also extend my respect to Aboriginal and Torres Strait Islander people who are here today.

It is a pleasure to be partnering with Monash University to deliver this inaugural Australian Competition Summit. And to bring together, from across the world, people who understand and commit our working lives to competition law and economics. Who know the importance of evidencing competition in operation and the benefits it brings.

This summit is timely for many reasons. Next week we will mark the 30^th anniversary of the ACCC which began operations on 6 November 1995 with the amalgamation of the Trade Practices Commission and the Prices Surveillance Authority. The landmark competition legal and policy reforms of the early 1990s that ushered in the ACCC delivered extended coverage of competition law, new access and infrastructure regulation, and important national competition policy actions. And for three decades, that approach has proved robust and adaptable. But today's economic, societal and geopolitical developments present new challenges and require renewed commitment and shared insights on how we promote competition and protect consumers.

30 years ago, I was closely engaged in the reforms to move Australia from monopoly to duopoly in telecommunications services. I had provided advice to the Commonwealth Government on the rights and immunities of carriers to be legislated to enable rapid expansion of telecommunications networks.

After, I was subsumed in the negotiation of the interconnection and facilities access agreement for Optus (the then shareholders were Cable & Wireless, Bell South and Continental Cablevision) with Telstra.

By 1995, I had moved on to negotiating agreements with Movie Studios and sports right holders to secure the content for Optus Vision pay tv services.

Those experiences taught me important lessons about the necessary regulatory frameworks, the critical technical and engineering elements for interconnection and interoperability and the difficulty of securing the foundations for successful entry. What strikes me today is that while technology, business models and markets have changed fundamentally, the challenges we faced and the mistakes we may have made remain relevant.

As chair of the ACCC, this year has arguably been the most interesting of my three years in the role. The level of disruption in competition law and policy, the significant expansion and critical status of global digital platforms, the push to net-zero transition, and domestic and global productivity and cost-of-living concerns, are just a few of the forces shaping the ACCC's competition work. Work that includes implementing merger reform, regulating infrastructure in concentrated markets, making a panoply of statutory decisions and running major enforcement cases.

In the context of rapid and fundamental change, it is clear to me that we must not simply react to disruptive forces. We must lead with principle and purpose, informed by a strong evidence base.

So, this Summit is timely. It brings us together to understand the lessons from the past and the challenges of the present. And to look forward, to test ideas, and to share emerging approaches.

The promise of competition

One of the key challenges that the ACCC is focused upon is that around the world, trust in institutions and governments is declining.

A recent survey of more than 33,000 people across 28 countries (including Australia), showed that a majority of respondents hold a moderate or high sense of grievance. A belief that the system favours the privileged - that business and government, including regulators, serve a select few and act in ways that hurt the community. And only a third believe that the next generation will be better off[1].

Alongside this decline in trust, we are also seeing signs that consumer awareness and expectations of competition are changing. In Australia, public attention on sectors such as aviation, supermarkets and digital services reflects an increased scrutiny of household budgets in the context of uncertainty and high cost-of-living. But it also reflects the expectation that competition should deliver tangible outcomes on price, choice, quality and service.

This expectation matters. It is enshrined in the object of our Competition and Consumer Act, that the promotion of competition is not an end in itself. Rather, that we work to promote competition to enhance the welfare of our community. And in this time of disruption, and diminishing consumer trust, it is more important than ever that we deliver on our mandate. That we strongly articulate the case for competition in a contested public policy environment. That we demonstrate the benefits of regulatory interventions to protect the process of competition. And that we ensure that our work delivers outcomes that are valued by the communities we serve.

To kick start today's discussions, I would like to use this speech to reflect on the ways in which we can lead to fulfil this responsibility:

• through collaboration with our international partners
• through change with right-sized regulation
• through action with robust competition enforcement, including merger control
• and through disruption using new approaches to anticipate and prevent harm

International partnerships: leading through collaboration

First to leadership through collaboration with our international partners.

It is a privilege to be joined at this Summit by regulators, experts, policy makers, advisers, and academics from across the Asia-Pacific region, North America, United Kingdom and Europe.

As Chair of the ACCC, I have learnt and benefited from our engagement in the international competition community as we each seek answers to very similar questions and challenges.

While the ACCC undertakes investigations independently our effectiveness is strengthened by the trusted relationships built over many years of international engagement.

Through the Organisation for Economic Co-operation and Development (OECD), the International Competition Network, our long-standing program with the Association of Southeast Asian Nations (ASEAN), and newer collaborations such as the PINCCER network, an important forum for competition, consumer and economic regulators across the Pacific - we are sharing intelligence, common challenges and new ways of working.

These relationships help us to align elements of reform where appropriate. To identify emerging risks before harm becomes entrenched. And to ensure that competition law is grounded in strong forensic discipline, the best economic analysis and a vision for expanded application, as markets transform at an extraordinary pace.

Right-sized regulation: leading through reform

While overseas jurisdictions may operate within different legal traditions, economic pressures and political contexts - competition regulators worldwide face similar tensions. How to be the tough cop on the beat as expected by the community without being viewed as over restrictive. How to be firm without abandoning proportionality. And how to enable dynamism and economic growth without giving licence to harm.

At the ACCC, we are navigating this with a commitment to right-sized regulation. That is, intervention that is rigorous where harm is greatest and proportionate to risk. And advocating for targeted reform to advance the protection and promotion of competition and the diversification of innovation.

This means advocating for both the introduction of new legislation where it is needed, and the removal or updating of regulation that is no longer fit for purpose. This principle is in action at the ACCC across our broad range of work in merger reform, digital platforms, telecommunications, product safety and scams prevention.

Merger reform

When the Treasurer introduced the new merger regime to Parliament late last year, he described it as a reform directed at boosting competition and productivity.

These reforms seek to strike the right balance between seeing and preventing the small number of anti-competitive acquisitions, while allowing those that are unlikely to raise competition issues to proceed promptly and with certainty. Importantly, the design of the new regime - and the ACCC's committed approach to its delivery - has focused on regulatory timeliness, transparency and predictability. This includes clear processes for engaging with parties, competing businesses, suppliers, customers and the broader community.

The new regime aims to give businesses greater clarity, consumers greater confidence and aligns Australia with best practice in merger control across OECD economies. And it is a topic we will be discussing in more depth later today.

Digital platforms

Right-sizing regulation is also at the centre of our recommendations for digital platform competition measures. This proposed regulatory framework, closely aligned to the UK model, includes targeted service-specific codes of conduct for designated critical intermediary platforms.

This model can respond quickly to technological and business model change, support pro-competitive innovation through interoperability and contestability, provide more choice and lower cost for Australian consumers and businesses and be designed to be coherent with the regulatory frameworks being developed and implemented in other jurisdictions.

Such a targeted code-based regime would complement competition law enforcement to ensure that Australians can enjoy the benefits of competitive digital services.

Telecommunications

Meanwhile, in telecommunications, as new technologies have emerged, the ACCC has right-sized regulation by adjusting our settings to ensure we only regulate when necessary.

For example, in response to technological change and the rollout of the NBN, we no longer regulate wholesale services providing access to Telstra's copper network. We have also significantly cut back wholesale regulation of telecommunications transmission services.

This change in settings has been in response to significant industry investment in fibre - driven by cloud computing, hyperscale data centres, and growing demand for enterprise connectivity.

Product safety

We also have advocated for, and support the discipline of, right-sizing regulation in our product safety remit. Following enabling amendment to the Australian Consumer Law, the ACCC is conducting prioritised review of international safety standards to assess where they provide the same or greater protection than Australian national standards. This will allow businesses supplying products in Australia to comply by conforming to international standards, including as they change over time. This will reduce compliance costs, enable access to global supply chains, and increase consumer choice without compromising safety.

Across all of this work, the principle is the same: regulation that is fit for purpose, proportionate in design and implementation, and directed at the greatest harms to consumers.

Leadership through action: competition enforcement

Which leads me to my next point: demonstrating our leadership through competition enforcement.

In August at our Regulatory Conference Margrethe Vestager said in relation to ex-ante regulation, that policy without legislative obligation and sanctions is just a suggestion. By extension, enforcement action is how competition agencies demonstrate, case-by-case, that business is accountable for anti-competitive behaviour and that harm will be addressed. Strong enforcement record is necessary for building public trust.

At the ACCC, our enforcement work over the past year reflects this discipline. And it reflects the breadth of tools available - from compliance engagement and education to enforceable undertakings and litigation - to address conduct that harms consumers and the competitive process. And to achieve outcomes that are proportionate to the conduct and its harm.

Just this week, we accepted an enforceable undertaking for resale price maintenance that strikes a balance between addressing the conduct and its harm, while being fair to the relatively small trader involved. We take resale price maintenance very seriously because it stops retailers from competing on price and can increase what consumer pay.

Our recent action against Google demonstrates in practice our ability to combine enforcement tools to achieve an outcome that most benefits competition and consumers in a timely way.

As most in this room will already know, Google admitted to breaching Australia's competition law in relation to pre-installation and placement of Google Search on Android devices and agreed to jointly submit to the court that it should pay a penalty of $55 million. It will be a matter for the court to determine appropriate orders, including penalty.

Importantly, we also secured a court-enforceable undertaking from Google, with commitments to modify the way it distributes Google Search in Australia. These commitments are designed to deliver tangible benefits, providing the opportunity for choice for millions of Australian consumers. And opening up competition on the merits.

In addition to these cases, through our action against cartels, we have been clear that collusion - in any sector and at any scale - is incompatible with competition and will be met with serious consequences.

We have recently seen the Full Federal Court uphold decisions in favour of the ACCC in our cartel cases against Delta Building Automation and BlueScope Steel.

We have also announced two new civil cartel proceedings in recent months: one alleging price fixing in the supply of fresh produce to ALDI. Another alleging price fixing and/or supply restriction by major suppliers of mobile crane services in Sydney. These cases cut to the core of markets that matter to Australians - our food supply chains and the construction and infrastructure sectors that underpin our economy.

And beyond these cases, we continue to pursue other important matters before the courts, including our misuse of power case against Mastercard and our civil cartel case against Spotless and Ventia.

In each of these matters, the decision to take action is driven by public interest and grounded in evidence - a clear assessment of harm, competitive impact and consumer welfare.

Taken together, these proceedings illustrate the complexity and force of contested competition litigation. They also show our resolve to take action where important to secure specific and general deterrence of anti-competitive conduct in all its forms.

Leadership through disruption: new approaches to anticipate and prevent harm

As I noted at the start of this speech, leadership in the promotion of competition is not just about reacting to disruptive forces but influencing and shaping outcomes. As such, competition enforcement involves not only responding to reported harm, but proactively anticipating risk, detecting patterns, and disrupting anticompetitive conduct before its impact becomes entrenched.

This approach is seen in our work in cartels, where last month, we announced a partnership with the NSW government to obtain rich procurement data sets. We will apply data analysis led techniques to identify suspicious patterns to detect and deter bid rigging in public procurement.

We have also drawn on lessons from global experiences. Ahead of the Tokyo 2020 Olympic and Paralympic Games, the Japan Fair Trade Commission uncovered an alleged bid-rigging cartel involving contracts worth nearly 540 million Yen. Several criminal convictions were secured, including a 22-month suspended prison sentence for a former government executive, and fines imposed by the Japan Fair Trade Commission totalling 3.3 billion Yen.

The Spanish and South Korean competition agencies are now using advanced data analysis and AI applied to procurement data to identify the majority of bid rigging cases that they investigate and prosecute.

Conclusion

To conclude, we a community of regulators, policy makers, expert economists and lawyers, researchers and advisers come together at a critical time. Faced by the challenges of significant technological and business model disruption, increasing market concentration, geopolitical uncertainty, conflicting public policy pressures and the need to build community trust we have a critical role to play. It is important to both articulate clearly and demonstrate in action what competition means and the benefits it brings.

We understand we will be most effective when law design and enforcement is principled, proportionate and grounded in the public interest. By sharing our experiences and learning from each other, we advance our stewardship of competition policy and law at a pivotal time.

Thank you.