Big business predatory pricing scare campaign all hot air

Predictions by big retailers that stronger predatory pricing laws introduced last year would see the end of discounting have been shown to be empty, the head of the competition watchdog says.

After several months of operation the laws had “yet to cause the sky to fall in on discounting”, Australian Competition and Consumer Commission head Graeme Samuel yesterday said in a speech in Sydney.

“Predictions from Woolworths and others that an army of lawyers would be needed to work out whether bread could be discounted at the end of the day does not seem to have caused an immediate shutdown of specials at large retail and grocery chains,” Samuel said.

“Indeed the fear of being hauled before the courts for predatory pricing didn’t seem to put a stop to the annual post-Christmas sales that shoppers enjoy every year, and I am not aware of a long list of businesses facing breaches of the act for daring to engage in their annual stock take sales.”

And, Samuel revealed, the competition watchdog is on the lookout for a test case to help clarify the operation of the “Birdsville amendments” to predatory pricing laws introduced late last year.

“The ACCC wants to do its part to increase certainty and understanding by prosecuting appropriate cases to test some of these questions before the court,” Samuel said.

University of NSW competition law expert Frank Zumbo, who played a key role in drafting the Birdsville amendments, says Samuel’s comments confirm that big business grossly over-reacted to the changes.

He says the fact that a case has yet to emerge to test the laws and clarify their operation was indicative of the fact that it only applies to a relatively narrow class of cases where there is a genuine abuse of market power.