Barnaby Joyce’s competiton policy win for SMEs

The Government has made a last-minute move to beef up SMEs’ protection against predatory pricing by adopting a key change to Trade Practices laws formulated by National Party Senator Barnaby Joyce.

The shift represents a big win for Joyce, who has fought for the changes since they were rejected by a Government-dominated Senate committee in August.

He told SmartCompany that this morning he received the agreement of Treasurer Peter Costello to make a key change to the Government bill, which could now be introduced into Parliament as early as this afternoon, to include an explicit definition of predatory pricing.

The new definition of predatory pricing will make it easier to prove that a big business has abused substantial market power, a key step that must be taken before a prosecution for predatory pricing can proceed.

“This means a clearly defined new process of when someone is using a unreasonable market power to predatory-price people out of the market,” Joyce says. “In the past the Boral decision meant that people effectively had to show a competitor held a monopoly position to prove the exercised substantial market power. That was a hurdle that in most cases was impossible to jump.”

Joyce has also persuaded Costello to insert new text into the explanatory amendment accompanying the bill, making it clear that it is not necessary to prove that a big business has been able to recoup profits lost by cutting prices to unfairly eliminate competitors.

“At the moment there is a requirement that after I go broke I prove that big busineses will put up their prices to recoup losses. That test has been so ineffective that the ACCC has not even tried to prosecute anyone under s46 since 2003, but now that issue will be resolved,” Joyce says.

Joyce says the move represents a clear message from the coalition that SMEs are its “cultural and political centre” and that they were “first and foremost” in its political thinking.

The shift also clearly represents a substantial victory for Joyce, who in just over a month has moved from dissenter to key player on Trade Practices.