The Greens have released plans to give the competition regulator a new power to force companies to sell assets if they grow too big and gain too much market power, acting on years of debate about whether Australia should have similar laws to the United States.
The move is aimed at supermarket giants Coles and Woolworths but could be used against other companies that inflate prices or exploit their supply chains to keep competitors out of the industry.
“This isn’t a controversial or radical proposition,” Greens Senator Nick McKim said in a statement.
“The UK has this power, and the US has been using it for well over a century. The competition agencies of Ireland, Italy and the Netherlands have all recently required the divestment of supermarket assets in order to increase local competition.”
Greens senator Nick McKim says the plans weren’t controversial.Credit: Alex Ellinghausen
The Greens are moving ahead of the federal government on the issue, given Treasurer Jim Chalmers and other ministers have set up a competition review to look into this and other issues.
A similar power, known as antitrust law in the US, has been used for decades to order big companies to break up their businesses, most famously when regulators in that country ordered the nationwide telephone company, AT&T, to be split into regional businesses.
Former ACCC chairman Allan Fels called for the divestiture powers last month, but he noted the challenge for the regulator in persuading a court to order a company to make the changes.
“It’s not obvious that breaking up Coles and Woolies into smaller units would be regarded by court or by anyone as sensible. There would be quite a loss of economies of scale,” Fels said last month.
“However, the existence of the power is likely to have a big effect on business behaviour generally. It’s a huge stick, and a big stick is needed to make some parts of the [Competition and Consumer] act work more effectively.”
Nationals leader David Littleproud has previously called for divestiture powers, showing the Greens have support on the other side of politics. Labor and the Liberals, however, are yet to back the idea.
The Greens say their bill would allow the ACCC to apply to the courts for an order to require the divestment of assets by a company that is misusing their market power to inflate prices, exploiting their supply chains or keeping out competition.