Pandemic, policy agenda to ensure ‘exciting year’

ACCC chair flags more uncertainty ahead but also reforms relating to electricity, gas and the tech giants.

Chair of the Australian Competition and Consumer Commission Rod Sims. Picture: NCA NewsWire / Gary Ramage

Anybody wanting a quieter year in 2021 is going to be left disappointed, according to competition tsar Rod Sims, who says the coronavirus pandemic, combined with the watchdog’s aggressive policy agenda, will combine for a year that should be even more action-packed than the one before it.

Fresh from delivering major ­reform in the mandatory media bargaining code, the Australian Competition & Consumer Commission chairman said people could expect more to come, particularly relating to electricity, gas and the tech giants.

But COVID-19 would remain front of mind, and a recovery would take longer than we might have hoped.

“Next year is still going to be very uncertain,” Mr Sims said. “It’s very hard to predict how COVID will play out both here and overseas, and I don’t think Australians will be travelling overseas [in 2021], except for rare cases.

“That uncertainty is going to be piled on top of a whole lot of things that are just coming over the hill at us. The electricity market, the gas market, telecommunications and consumer data rights, the digital platforms … we’ve got a whole lot of safety issues.

“There’s a lot coming at us and a lot of uncertainty. It’s going to be a really exciting year.”

While there were promising signs on the pandemic, with multiple vaccines on the way, Mr Sims warned that the crisis would continue to dominate the agenda, both for his agency and the nation more broadly.

“I know people talk about ‘isn’t it great to [see] the end of 2020’, and there’s a feeling of turning the corner, but that corner might not be so easy to turn,” he said.

“We are getting a lot of requests for people struggling to get refunds. And we put out a report in mid-December that suggested that the aviation sector was up and away, because at that time there were no border closures.

“Now, of course, once you close off Sydney, you have a massive ­effect on aviation. Plus, I think there’s the uncertainty of [booking accommodation and travel] which could get cancelled at short notice. COVID is going to remain a big issue.”

The ACCC is going to be heavily involved in the energy sector this year, including through legislation to ensure wholesale energy prices are reflected in the bills paid by customers.

The watchdog is also tackling long-term regulatory arrangements for the NBN to help with pricing certainty, a project Mr Sims described as a “huge issue”, and will also become the enforcer for consumer data rights, which will give people greater access to and control over their data.

The ACCC has played an outsized role in regulating the tech giants, and bringing them to heel when watchdogs in other countries have hesitated.

The local watchdog will hand down an ad tech report and a ­report into the app stores by the middle of the year.

“The ad tech stuff is fascinating because obviously Google is on the buy side and the sell side, and there’s issues of conflict of interest, issues of use of market power,” Mr Sims said. “And the app store ­market, which is essentially dominated by Google and Apple; how much use of market power is there, how much self preferencing is going on?

“These studies are really important, because the Digital Platforms Inquiry study that we handed to government in 2019 [provides guidance to try to understand these markets]. I think our DPI report did that. And it has played into some of the action that’s going on overseas. So you can expect a very big year for digital platforms.”

Google last month responded to the mandatory bargaining code, describing it as “unworkable” despite a host of concessions, and Mr Sims said he was surprised that the tech giant was still unhappy with the final legislation, particularly given there had been no shortage of negotiations.

“We thought Google were happy, but now they’re saying they’re not, which is a bit disappointing. We think we’ve met their main concerns, and if there’s more talking that needs to be done, well that’s fine,” Mr Sims said.

“As we’ve always said, and this is a crucial point, you can’t have a commercial deal with someone who’s got way more market power than you do. Because they’ll just exercise that market power and impose something on you that you don’t want.

“What we’ve done here is evened up the bargaining position by saying either side can have recourse to arbitration, if they’re unhappy. What generally happens is then you do do commercial deals, because both parties want to avoid arbitration. Both have now got much more even bargaining power, because either one can resort to arbitration. So this should lead to commercial deals outside the code. The code is a backstop, it evens up the bargaining power, which is all it was ever meant to do. So let’s hope we get some commercial deals being done, and the sooner the better.”

The watchdog has given itself an aggressive workload, but Mr Sims said additional funding from the October budget had left the ACCC well resourced to accomplish its goals. The organisation ­recently added two new commissioners: Anna Brakey and Peter Crone.

Some pundits have predicted an insolvency surge in 2021, particularly as stimulus measures come to a close. Mr Sims said he would be keeping an eye on firms that might get in trouble and seek to sell to their main competitor.

“Just because the main competitor is going to pay you the most doesn’t mean they’re the ones you sell out to,” he said.

“If there’s other buyers, then you should be open to those because that may be a more competitive outcome.

“Sometimes the better outcome is to let the firm exit, if the only alternative is to sell to the dominant player.

“But we haven’t seen a lot of it yet, that’s the good thing.”