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Issue No. 141 | 21 June 2002 |
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Bitter Pills
Interview: The Fels Guy Solidarity: Life or Death? Unions: Back to Basics International: Global Terror History: Sorry Business Technology: Future Active Satire: Executive Presents PowerPoint Eulogy at Mother�s Funeral Poetry: Santa Claus Was Coming to Oz Review: Dial 'M' For Minority Report
The Soapbox The Locker Room Week in Review Bosswatch
 Tanya IncTom Bites BackRoot Canal Therapy
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Interview The Fels GuyInterview with Peter Lewis
What do you see behind the current attack of the ACCC coming from the top end of town? Firstly, they don't like the Trade Practices Act being applied seriously. They laugh at regulators who aren't serious and they try to destroy regulators - like the ACCC - who seriously apply the law. Their complaints and campaign are a sign that we are doing our job protecting the community from monopolies and cartels of big business. The other point is that there's a review of the Trade Practices Act at present and we're proposing the possibility of jail sentences for big business price fixing and stronger protection for small business against big business. They are trying to divert the enquiry onto issues about our processes. What are the particular actions that you've undertaken that you think have got up their noses? In the last 10 years, we have uncovered many cartels, many secret price fixing agreements. For example between freight express players such as TNT and Mayne Nicholas - who got fined $16 million; between building companies such as CSR, Pioneer and Boral - who got fined $21 million between them; international vitamin companies got fined 26 million dollars; and power transformer companies recently got fined 20 million dollars. They don't like that. The second thing is that big business does not like the stronger merger laws, that with union support, were introduced in 1993. We can now block mergers that unduly increase concentration in the Australian market, unless there is a justification. They don't like us blocking any mergers, although in reality we've blocked relatively few. Thirdly, we have been taking more action against big business engaging in behaviour to illegitimately kill off small business, for example, through pricing - by setting prices well below costs temporarily in order to get a monopoly position ultimately. They don't like us applying the laws about misleading and deceptive conduct, for example false advertising. So there's a general reaction to us applying the law vigorously. Do you see a link with other BCA agendas, such as the wholesale deregulation of the Labor Market? Well, my perspective on the Business Council is that its members want competition for everyone else but not for themselves. There are major conflicts of interest between members of the Council except on having lower tax, on deregulating labor markets and on weakening competition law. Personally, I'm disappointed that they've not been prepared to push harder or some other reforms such as in energy and telecommunications where there could be more competition and better prices. Although many BCA members want these improvements, they're vetoed by some of the other members of the BCA, so they've got conflict of interests on a limited range of topics. In terms of the big picture haven't you really got an impossible job, isn't the system inherently anti-competitive, isn't there a natural tendency toward monopoly? Well, to a degree there is, but there's a couple of things that go the other way. One is that the merger law plays an extremely important role in slowing down that tendency. Another is that the economy is still growing, it's been growing since 1974 when the Act was introduced, and growth leads to there being new businesses. Now it's most unfortunate that the statistics that used to be published from many years ago about how concentrated each industry is, are no longer published or collected, just relying on subjective impressions. I myself don't think the economy in general is less competitive than it was 20 or 30 years ago. Where I agree with your question is to the extent that there is a natural desire by competitors to agree on prices, to agree not to compete, to agree to merge to become monopolies. I believe that in a free market without a competition law your worst nightmares would come true, that everything would monopolised or be subject cartels, everything being monopolised or cartelised. But the Act does make a contribution to stopping this happening. Also it has to be acknowledged that opening up the economy to international trade has often led to there being more competition. What about organised labour, how does that fit into the ACCC's view of the world? Isn't collective bargaining really a form of anti-competitive behaviour? For many decades all around the world industrial relations has been recognised as different. On the product market side the aim has been to stop collective price fixing; where on the labour market side the aim of policy has been - at least until recent decades - to do the opposite and to encourage collective bargaining and collective wage setting. Now when I lectured, 20 years I could justly make that statement, but the two policies have gone in different directions. Now 20 years later, one starts to see a lot more questioning, particularly by the Right, of collective bargaining. This is not to say that there's been anywhere, any adoption of the idea that competition law should apply to the labour market. We get into a bit of fuzzy area though with the secondary boycott provisions that are now under the Trade Practices Act. What has happened is that, if you think in terms of labour market policies to encourage bargaining and in product markets to discourage to collective price fitting, then it has to be recognised that there are some borderline problems. The question becomes: where do you draw the line? And secondary boycotts law in Australia has drawn the line at a certain point, it is certainly a point that is further into the labour market than most countries. The fact remains that the act has an exception for employees engaging in collective bargaining, and it is only in two areas that their activities are at risk. The first is uncontroversial in my opinion, if they happen to aid and abet big business in price fixing, then they're at risk. I can't recall us having a case there, although it occasionally happens in other countries. The second is of course, more controversial - the secondary boycott laws, which have much more extensive applications to trade unions. Although I would comment that it is my impression that the changed structure of unions in recent years has been a factor in the reduction of the amount of secondary boycotts. Are you comfortable as head of the ACCC, being brought in to industrial disputes? I know you came into the MUA at one point? My most basic role is to apply the laws enacted by Parliament and therefore, although I did not enjoy being involved in that dispute, I felt it was my duty to apply the law without fear or favour. It was up to parliament to decide and in doing so I took account of the fact that the Parliament had just passed much stronger secondary boycott laws. It was not my job to overrule Parliament. Now the other big problem about the secondary boycotts in the MUA dispute was that they differed in one major respect from employer behaviour in general. When employers collude they take great care and when they collude and break the Trade Practices Act they take great care to do so secretly, and our problem is to find evidence. Unfortunately secondary boycotts are very public. In the MUA dispute the whole population, every night of the week was treated to a display of secondary boycott behaviour that was hard to ignore. Anyway I'm pleased that the matter was eventually settled after extensive discussions with the MUA and the ACTU. There's another issue with the Trade Practices Act which we often hit and maybe you could help explain it the people in the union movements. If there is a company that's shown to be treating their workers badly and they have a consumer outlet, the idea always comes up to call for a consumer boycott of this jean company or this soft drink company. The lawyers tell us, oh no you can't do that because you'll be in breach of the Trade Practices Act. Why shouldn't unions, groups of workers be able to call for a consumer boycott of a product or a company that is treating their workforce poorly? Well, I've got a good answer to this. There's an exemption for consumer boycotts under the trade practices act, so the legal answer referred to that's incorrect. In general there's nothing wrong with consumer boycotts with the effect, if the dominant reason for the boycott is environmental protection or consumer protection, its ok. But what about industrial protection? As I said normal collective bargaining and strikes are exempt from the act, only secondary boycotts are covered. The provisions on secondary boycotts are complex, and at times far reaching, but it should be remembered that there's an exemption for secondary boycotts, where the dominant purpose of the conduct is related to the remuneration for conditions of the person engaged in the boycott. But what if the people we're calling the boycott for are workers in a Malaysian sweatshop? And we're saying don't buy X jeans because they treat their workers badly overseas? Well it depends on the behaviour, well if you're just urging people don't buy, that's fine. There's nothing unlawful to urge people not buy products from countries exploiting labour. If you use your industrial muscle to block the arrival in shops of these products it may or may not constitute a secondary boycott. That's interesting, so to your knowledge there hasn't been any cases brought to you because of consumer boycotts by unions? There's not and furthermore, although there've been quite a few secondary boycott cases, I can't remember any that have been about this overseas situation you are talking about. Just going back to the general issues again, obviously the pressure will be building on the ACCC over the coming weeks, if there are working people who don't think its getting a fair go, what can they do to support the ACCC at the moment? They should tell politicians, and they also speak up publicly. I have noticed in the last week or two that there is quite a lot of spontaneous letter writing to newspapers and calls to radio stations supporting the ACCC. These things make a difference that this is not an organised campaign, and in the sense that makes it more powerful, the fact there is quite a few callers to radio station suggest spontaneously support the ACCC.
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