Competition policy analysis

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While competition in the business world is hailed for its role in ensuring betterment of service and product quality, one major issue still remain salient. Some economists in their contention agree that while competition should be allowed to thrive, a limit should be drawn to ensure that weakling business units are not thrown out of survival. Others however argue that while competition exists to ensure that only the fit to stand by the requirements survive, the businesses or individuals that cannot keep up with the forces should be kicked out of the "game" by the forces of competition. At a closer analysis of the former view, it almost fits to conclude that those who stand by that view support a direction where to a .large extent the competition policy protects the competitor. This is as opposed to the latter group, who could be interpreted as arguing that competition policy should seek to protect the competition but not the competitor. The legal environment offers a good definition for business organisations to refer to in their day to day operation in the competitive environment in which they operate.

Because of the stiff competition that exists among firms and corporations in the contemporary business environment, some businesses may want to form an alliance with an aim of thwarting any competitive force unleashed within the industry. Brebner (2002), notes that such an alliance may also aim at jeopardising any effort made by the competitors. He further observes that this, to a substantial effect, will curtail competition and hence create resource-controlling units or factions in the economy.[1]

Furthermore, the ever-changing characteristics of competition coupled with the swiftly changing market structures complicate more the issue of competition that it is not only desirable to have a serious consideration of the issue of competition and competitors but it is even more important that any consideration made is done with utmost flexibility. The main idea is to ensure that the system within which these factors and parameters operate is operational rather than the market system, economic system or any other relevant system thereof halts because a particular policy has sought to protect either competitor or competition.

Definition of competition and competitor

Competition has been defined differently by different scholars and this depends entirely on its history. Competition exists not only in business but also between individuals, groups, animals, nations etc. It is a contest between different entities for either territory, a niche or resources. Competition exists or rather arises when two different bodies or entities strive to achieve objectives or goals which both of them cannot share.[2] Competition is a natural phenomenon between living organisms existing in the same environment. Any living organism strives to acquire the basic needs for its existence. For example, animals and human beings compete over water supplies, mates, shelter and mates among others. Competition often gives rise to deep rivalries especially among the human beings over the pursuit of wealth, prestige and fame. Business corporations are commonly associated with competition due to the fact that the very many business companies share same customers.

Competition is common strife for the same object by two different bodies. It is the act of seeking to gain what another trying to acquire it at the same time. Competition exist where the two people operating in the same business everyone seeking patronage. In business, customer acceptance and loyalty is very important. The battle between businesses for these aspects encompasses competition. The free enterprise business system allows different business entities to produce different products according to their wish. Businesses are at their discretion to make right decisions on what products to produce and how to produce these products.[3] In the free enterprise system, competition is the basis for improve quality products in the economy. Competition enables companies to compete for same customers hence every company has to strife to produce the best products that are the most appealing to the customers.

In relation to the business environment however, we can look at competition as the clash that exists between and amongst businesses in their endeavours to win/retain consumer acceptance and loyalty. Firms also compete for other resources like labour, natural resources, distribution channels and generally market dominance. Nevertheless, all these are an attempt to win customer loyalty and consumer acceptance. So competition can be perceived as a process by which the presence or activity of a given business entity interferes with, affects, or suppresses the activity of another business entity or firm which has similar or related dealing.

History of competitors & competition.

Competition has existed in the history of man for a long period since history of humanity. It exists in virtually all fields; be it business, academics, individuals or entities like institutions. However, the paradigm shift in the societal setup, technological integration and innovation, conflicts between the rich (highly developed) and poor (or still developing) nations changes the way in which competition has to be looked at.[4] A better idea of competition started with the conception of Charles Darwin's idea of competition by living things for survival. Earlier modes of competition were haphazard and hard-core. This meant that a law needed to be formulated to guide competitors and give direction to the process of competition. In the mid 19th century laws were formulated to create a level competition grounds for businesses and other economic actors. Before this move, at the beginning of the 19th century, competition as a concept had become greatly important and it received praise for its ability to restructure the economy. In fact, David J. points out that the concept of competition had a share in the rise and fall of liberalism in Europe. Thus, as the competition law was conceived in Europe, it was developed in a way to exhibit ambivalence people had developed upon touting competition as a betrayer of humankind.[5]

As the attitudes and ideas relating competition changed and transformed by the day, perceptions of the need to protect competition process also changed. Factors such as economic development process shaped the perceptions people held concerning competition and thus it became more important that a law to protect the process of competition was imperative.

Initially, the concept of protecting the process of competition was entrenched in notion of liberalism and political freedom. Since liberalism mainly focused on bringing a change to the political system of the day, it sought to redefine political power since the political setup then comprised kings using their power the way they liked. Nevertheless, this political freedom they desired would have both negative and positive impacts. There was a necessity of achieving both dimensions.

Liberals endeavoured to subject the discretionary political power to the constraints so that they would be free from it- that is to say, the negative dimensions of the freedom they desired. On the other hand, there was the positive dimensions which came as a result of the political freedom; participatory rights for entities in the political process. Thus it was necessary that law creates the environment of freedom through creation, recognition and ultimate enforcement. The proponents of political freedom also sought economic freedom so that they would be subjected to the constraints enforced under the political regimes of the day. By the time the century came to a close, fight for economic freedom was more intense than ever before. In addition, regulation in economic conduct was also extensive and was carried out by either the ruling power (government) or mediating organisations (for instance the guilds). By this time, most governments around the world put in regulatory measures aimed at conserving the wealth of the states and giving protection to the economic privileges enjoyed by the elites in power. Adam Smith developed and immensely popularised the concept of competition during his era with 'the invisible hand idea.' It was seen how competition produced benefits to the society as private individuals interacted in search for personal wealth. Then, competition was seen as an opposite force to regulation though Smith contended that competition cannot destroy the society's social fabric.

Thus competition in its original stages involved elites competing in the society for the private benefits. The main competitors who were in most cases merchants, gathered benefits which led to accumulation of wealth and thus set the stage for even more augmented competition. Since proponents and opponents of freedom in the economic system would only support it to the place where such side they supported had positive impact, a balance point was necessary so that some individuals do not benefit at the expense of the opponents in the competition process. As mentioned in the preceding paragraphs, changes in the society also impacted a change on competition. Industrial revolution and industrialisation encompassed a technological process that intermarried with the traditional competition process brought a new era competition process. Competition thus increased in the manufacturing and production of commodities. It then took another turn as most players wanted to compete favourably against others by improving their production efficiency, cost management and market command.

Expansion of manufacturing and production brought the need for expansion of the market for the produced goods. Competition moved to an international level where competitors staged heated conflict for market dominance, control of sources of raw materials among other factors. This could be seen in the scramble by European nations for lands that had these advantages. World War I was mainly anchored on industrial production capabilities of the nations and therefore competition in production was a staged duel.[6]

Manufacturing competition

Companies that engage in the production of similar products or merchandise create a competitive force for whole sale price, marketing and distribution channels, innovations and market dominance. Each business or manufacturing entity dealing in the same products would wish to ensure the loyalty of the retailers or the retailer outlets to which they sell their products. Having the best distribution channels for the product is one strategy that a company may use to ensure that it has a competitive against the other companies that make similar products. Competition is very imperative in the global economy hence any company that wish to succeed should be very efficient and effective enough so as to outwit its competitors.[7] The most successful companies produce the most appealing products leading to high build up of large customer base.

The global economy is bounded by competition between different companies and it is evident that every successful business entity has a competition of some kind. Head to head direct competition is very common in the modern economy and this has lead to the establishment of patents, trade secrets, copy rights and other efforts to protect these companies or business entities from harmful effects of competition. Substitutes of products and services offers competition since the products might be viable replacements of other company's in the eye of the potential customers.

Competition calls for competitive intelligence so as to avoid any unpleasant surprises in the business environment.[8] Knowing what is happening around you in the business environment is paramount and this should be accumulated only through legal and ethical ways. Health competition is only exhibited if the business entities share a wealth of information present in the trade journals, during conferences, information available in the web, press release, annual reports and host of other ways of relaying business information in the business environment.

On the global level, manufacturers in a given location, region or country may incur low costs of manufacturing the same products. This will give them a competitive advantage against their opponents supplying the same products to the market. For example, products from China have been known to come at relatively lower prices due to the fact that manufacturing costs in China have been low.[9] However, as Bradley notes further, manufacturing competition may only succeed or be completely effective where a number of factors are achieved:[10]

  1. The manufactures must ensure proper and effective inventory management. Otherwise the saved costs will still hamper success of the intended competitive age by adding costs of such failures. This should be done by ensuring improved cash flow velocity which in turn improves productivity.
  2. Effective and efficient demand-product synchronization to reduce logistics costs brought about by high market fragmentation
  3. Proper capacity management through strategies like production planning and expansion delays
  4. The effective use of technology and material handling

Competing for sales

a) Individual sales

When a buyer is making purchase decision to make a purchase of a particular good or service, competition ensues among all the businesses selling that product or its complements. This competition may be in terms of commodity pricing, availability, strategic location of the point of sale, and the quality of any after sales services provided. The winner among the businesses will depend on which of the sellers or stores the buyer decides to finally buy from. After the sale is made and the winner and loser are determined, the businesses have to go on to the next sale and the process continues creating a continuous process of incessant competition.

b) Success

As indicated above, the competition for individual sales creates an incessant process of competition which will, in the long run, have a bearing on the business that is more successful than the rest in winning individual customer sales. This leads to several options for those that do not make it. One thing is to go out of business and fall out of the market. Another option is to relocate to a new market and move ahead. Some businesses may opt to change their marketing strategies in order to succeed. The business that wins most sales becomes the ultimate powerful market controller.

It is notable that the sales processes which are applied in the contemporary business world have changed the nature of competition since competition is incorporated at the very core of the processes. Now that businesses compete to make sales than others and become the ultimate market leaders, commoditisation has become the norm of the business world that characterises the operations and processes that are attached to sales.

In some cases, competing for sales may lead to a situation where the competing corporations wish to close the deal quickly; each on its own behalf. This will compromise on the quality goods and services offered to the consumers especially where the consumers' tastes and preferences are not quality-sensitive or where the products do not call for such keen examination by the consumers. This will not only pose q challenge to the competition law but it will put the consumer welfare at stake.

Competing for sales should be of benefit to the consumers where it leads to more invention, innovations and these not only contribute to more efficiency in the processes but the resulting value is better at a lower price than before. Otherwise, businesses would engage in misleading advertisements just to make sales. Engaging in misleading conduct, misleading or deceptive advertisement are all prohibited under sections 52 and 53 of the Act. As the ACCC has the mandate to handle the issue relating to misleading advertisements or conduct by businesses, corporations must be wary of the way they display their product prices and the kind of representations they make in bid to win purchasers.[11] Thus, the prices displayed should include GST. If the competition policies do not deal with situations of this kind, businesses will engage in misleading conduct in the market and defraud consumers while at the same have an unfair competing edge over others. This will also put the competition process at stake.

Competition models

Businesses adopt two main models of competition in their day to day operation and bid to become the ultimate controller in the market. Different strategies are available for businesses to ensure that they win over the rest gripping the largest share in the market. The strategy adopted may be internal to the business or external to the firm or corporation.[12]

a) Performance Competition

This is a competition where the performance of the business is the main decisive factor on which the success or failure (winning or losing) of the business entity is based. It is unlikely that competitors can directly stage an influence on the performance of other competitors. They cannot also hinder their competitors' performance directly either. For this reason, business work hard to gain knowledge of other competitors in the market so that they can establish the type of performance competition they stage.[13] When a business has gained knowledge of another business in terms of the competitor's progress and capabilities, a pure performance competition ensues. Another type of performance competition is the affected performance where the competitors in the market have knowledge of each other's reputation and progress.

b) Head-to-head Competition

This is a competition model where two businesses compete for the same market, customers, distribution channels or any other market advantage by being either on the offensive side or defensive side. The business that finds itself on the defensive side tries to defend itself against the bad effects of competition while that on the offensive side devises strategies to ensure its own success in acquisition of controlling power in the subject of competition. It is common in the business world for businesses to stage advertisement competitions where a company counters another company's advertisements by aggressively putting up its own ads. In this case, the company that responds to another company's advertisement efforts falls on the defensive side while the one which initially staged the ad campaign falls on the offensive side.

In order for head-to-head competition to come to an end, one of the contestants in the competition must either submit or change its strategy or it may even fall out of business. In summary, businesses that stage head-to-head competition fight each other by controlling the suppliers, through marketing and advertising tactics by trying to tarnish the other's image or through control of the distribution channels of the products.[14] Whatever they do, each of the competitors will try to not only control these important factors but will also try to ensure that the opponent finds it rough.

c) Predatory Competition

It happens more often that there are some businesses in the same industry or line of competition which have greater control power than others. Those that have greater market power do not wish to lose this power and lose their share of the market. For this reason, powerful businesses have attempted acquisition of the smaller ones. They may also use courts by bringing up lawsuits which will become expensive to the small competitors hence laying them out of business. For instance, powerful businesses in the market may force distribution stores not to store certain products.[15] Predatory pricing is also used under this type of competition where a powerful firm tries to engage destructive pricing especially where other methods of competition do not seem to work for it. It therefore adopts a pricing strategy to price products below their cost of production. This will put other firms out business and therefore the firm will continue to have a market control.[16]

In Australia, predatory pricing carries with it legal implications as defined in the amendments made to the TPA 1974 (Cth) in 2007. Using this strategy therefore faces legal restrictions though there will be the task of determining or establishing that actually the alleged act by the alleged firm was a practice of predatory pricing. In the Birds Ville Amendments, [2] s46 there is a task of establishing that the business entity in question did actually have a "substantial share of the market' as opposed to having substantial market power. The object of this idea is to grant protection to smaller businesses in the market such that the larger players in the competition each have a market command. Critics argue (for instance Clarke 2008)[17], that this is a move to protect the competitor rather than give protection to competition and therefore contend that it should be done away with since it prevents the ability of the large firms or businesses to offer discounts to remove their old stock.

Competition policies protect the competition not the competitors

Looking at the competition policies in three perspectives gives a point to consider. The competition policies that are highlighted in the TPA (1974) have a major focus on the creation or ensuring existence of a perfect competition market system in Australia. While such a notion may be so appealing to many micro-economists, it may not have sufficient clarity to indicate whether the policies that aim at creating perfect competition market system should aim at protecting the competition itself, the respective competitors or even the consumer. So, one perspective to look at the competition policies is on the basis of giving protection to the competition. The other perspective would be giving protection to the competitors in the system. Lastly, ensuring protection of consumer rights; of course the consumer is brunt bearer of any effect of competition.

Clarke (2008) contends that any radical change that has been made to the TPA (1974) in the past or any change to the competition policies should aim at empowering the businesses to participate in vigorous price competition.[18] Competitive attempts by some firms within an industry may drive powerful firms or businesses into predatory pricing. This not only eliminates the competitors but also fights competition. In reaction and relation to such a move by any business or businesses, the design of section 46 (1AA) the TPA (1974) prohibits predatory pricing. In predatory pricing, the business that wishes to curb competition from other firms engages in a price-lowering strategy in such a way that in the long run it eliminates them and then it becomes a price-setter thereby lifting them to supra-competitive levels.

Section 46 (1) of the Trade Practices Act 1974 (Cth), prohibits a corporation or a firm with a considerable market power from taking advantage of such power to either eliminate or cause damage to a competitor. In this case, the existence of the competitor is an important and prime factor to ensure existence and continuity of competition in the Australian market. Therefore, the issue of predatory pricing would arise where such a corporation had a considerable market power, the pricing policies it used or employed took advantage of the power and the policies were particularly pursued for one of the prohibited reasons.

Clarke (2008) highlights further the verdict of the amendments made to the s 46(1) of the Act in relation to predatory pricing of powerful corporations in the market. Because of the technicalities experienced earlier in the ACCC v Boral,[19] the amendments have an implication on the efficacy of the competition policies to protect competition or competitors in the market. It is worth to remember that the TPA (1974) is founded on the basis of enhancing the welfare of Australians by way of promoting competition in the market and ensuring fair trading.[20] This is its object. Through this, the TPA therefore seeks to provide protection to the Australian consumers. Should this protection be provided through protection to the competition or competitors? Competition policies are found in the Part IV of the TPA and among the most important parts highlighted by this part are:

  1. Proscription of collusive agreements: collusive agreements are prohibited
  2. Proscription of misuse of market power
  3. It prohibits exclusive dealing as well as mergers which would considerably lower competition in the market

The Act has laws which are wide-ranging in relation to competition though some of the provisions would depend on a competition test. It also allows for companies to engage in prohibited conduct as long as they can prove that such act or conduct was desirable and necessary.[21]

Most scholars, and in fact everyone, agree that the root object of competition laws is to the benefit of the final consumer of the products. However, should the laws accord the consumers the benefits by protecting the competitor or the competition? Graeme S, (2003) contends that rather than look at competition in terms of the number of competitors (which will imply that all efforts directed at coming up with any competitive laws should make sure that laws and legislations are such that they offer protection to competitors); it should be looked at on the perspective of its benefits. These benefits not only accrue to the society which is supplied with quality products but also improves the efficiency, creativity and innovativeness of the competitors themselves.[22]

In addition, competition laws should not work in any manner to suggest they are concerned about the fate of particular competitors. Competition laws should rather aim at promoting competition and fair trading in the Australian market.[23] The Australian Competition and Consumer Commission is mandated with the responsibility of promoting competition in Australia. However, competition often leads to difficulties for the individual firms in the industry or market especially as its vigour increases even if it is legitimate. Such vigorous and legitimate competition should not be interpreted as a failure in the market system which calls for protection of individual businesses. The task will be in demarcating the difference between a legitimate competition that has become vigorous and the one that which can be said to be an anti-competitive behaviour. With no doubt, vigorous competition is healthy for the benefit of the public while an anti-competitive behaviour by the players in the market leads to harm to the public.

In its submission for consideration in 1998, the productivity commission inquiry on the competition policy held that the legislative review should put into account the protection of small enterprises which undoubtedly contribute to the economy of Australia. Therefore, according to the commission, competition policies should (on this perspective) protect the smaller firms from harm resulting from competition by the larger businesses. The argument here is that though the competition intend to create room for market efficiency and competition to thrive, there are obviously large businesses that are already established and since they are a small number, some deregulation provisions in the policy would do good in increasing the dominance of the few and already powerful firms.[24] The concern is that if that happens the policy not only seems to give protection to firms that already have powerful share of the market but it also acts to the detriment of the economy which it was intended to improve. Employment benefits accruing from the presence of the smaller firms would be no more, consumers will then become price takers and market forces of demand and supply will have little effect in controlling equilibrium levels in the market. Does this imply then that the competition policy comes in too late? Does it mean that it only comes in when other firms are too far in market establishment and therefore at a disadvantage? Actually, the contemporary market is very dynamic and the flexibility of the policies formulated to give guidance is integral to the survival of an economy at or near desired equilibrium.[25] Otherwise, difficulties in interpretation of the policies would arise as the paradigm shift in the economy takes a new unpredicted turn.

Looking at the traditional economic concepts that competition was initially anchored on, the conduct of the players in the traditional economic systems sought, as their main objective, for their own private benefits or profits. Disharmony in those economic systems in turn arose from the conflict of these individuals where each one wanted to benefit as much as possible but at the expense of the others. However, progress was an idea that was closely attached to the concept of competition then hence leading to faster transformations in the society.[26]

One approach used to determine if a firm is engaged in rigorous competition that is legal or anti-competitive behaviour is to examine if they are actions that lead to public benefit or result in public damage. This is the approach that the High Court endorsed in reaching the verdict in ACCC v Boral.[27]

The High Court stated that the object of the Act on which the competition policy stands is to uphold competition, not to save individual firms' private interests from the harm of competition. This is based on the fact that competition may actually damage and eliminate a particular competitor especially when it is intense and it causes sufficiently serious damage.[28] Thus, when competition in the market is lawful though intense and more aggressive, it should not be interpreted as an anti-competitive behaviour because of a suspected predatory pricing by a firm. Nevertheless, it may be a necessary course to protect the competitors in order to nurture competition. Competition may become so intense in the market in such a way as to trigger other competitors to engage in behaviours that aim at damaging or eliminating opponents. For this reason, the policy must be able to protect this class of competitors who are vulnerable and likely to suffer substantial damage or possibly elimination from the market.

The design of Part IV of the TPA (1974) gives provisions which allow for intervention of competition regulators. One factor that may hinder or limit capability of intervention is where regulatory tools are not available or if they are available but inadequate to deal with the present circumstances.

One can examine the efficacy of the competition policies in relation to a number of factors. That is, by examining how the competition policies interpret various aspects of competition it would be easier to establish what goal they aim to fulfil.

a) Criminal Sanctions

Businesses cannot just engage in hard-core cartel behaviour and go scot-free. There are sanctions which apply to such behaviours and a convicted corporation faces fines, penalties, or imprisonment if implicated in the proscribed hard-core criminal behaviour. Cartel behaviour by business entities is viewed as an extremely grave offence. The provisions of the TPA (1974) give mandate to the commission to intervene in cases where the laws have been contravened. Therefore the law is designed to protect the competition process from harm caused by illegal competition tactics by some businesses. For example cartel arrangements made by executives would be considered criminal alliance intended to defraud customers TPA 1974 (Cth) s46.

In its submission, the Consumer Action Law Centre, in disapproval of appointment of small business' representative to the ACC stated in part:

Consumer Action does not support... to require one Deputy Chairperson of the ACC to be experienced in small business matters. ...the overall objective of the TPA is to enhance the welfare of the Australian consumers but not to protect individual competitors or small businesses. [29]

Another source of threat to competition is creeping acquisitions which is addressed under section 50 of the TPA. Though most takeovers and anti-competitive acquisitions take place at once, creeping acquisitions taker a slower, bit-by-bit version where a corporation slowly acquires another until a time when it has complete power of control. These acquisitions threaten the long-term consumer welfare and presence of real competition in the Australian market. Since such acquisitions may in the long run lead to a situation where there are no real competitors in the market, the long-run result will be q market that still has a few businesses controlling, demand or supply of products and services as well as the pricing of these commodities in the market.[30] In order for the competition process to be protected against any harm from the players in the market creeping acquisitions should be critically assessed by the courts to determine the intentions corporations have in making such moves. This should be accompanied by appropriate actions that aim at curbing any anticompetitive behaviour.

b) Abuse of market power

Because competition involves to a greater extent the struggle og businesses to control of the market over others, it is imperative that intervention be put in place to ensure that the businesses that are already in control of the market do not abuse that power. Alongside market power, corporations may want to engage in exclusive dealings, boycotts and resale price maintenance to put unfavourable on others. Such activities are handled under Part IV of the Trade Practices Act (1974). Part IV A of the Act proscribes any unconscionable conduct by a business. All these measures are meant to prevent harm to the process of competition.

c) Leniency Policy

Leniency policy was suggested as a means of revealing hard core cartel behaviour. Through the leniency policy, corporations or their executives are encouraged to uncover the gravest breach of the competition regulations. Such contraventions would include any activity that is proscribed according to the competition for instance, price fixing and cartel collusion.

Case study: The High Court's reasons in ACCC v Boral [2003] 215 CLR 374

In this case the ultimate ruling gave a decisive direction of the purpose of the competition policy. The salient issues in the case were predatory pricing, misuse of market power and of course intentions of particular actions. In this case, the accused sold some of its products lower than the production cost with an intention of causing harm to the competitor. The case against Boral did not however sail through. In order for Boral to be charged successfully for predatory pricing there are a number of criteria which had to be fulfilled. First, it had to be demonstrated that Boral had substantial market power. Secondly, it had to be established that the pricing policies it adopted took advantage of the mentioned market power. Lastly, there was the task of establishing that it actually pursued the pricing policies were pursued for any of the prohibited reasons. Therefore the case gave one of the most unthought-of outcome and successful application of s46 (1). The case against Boral Besser Masonry Ltd did not succeed given that the accused company did not hold a substantial market power. Such cases had earlier on succeeded and plaintiffs charged.[31]

The conclusion of the ACCC v Boral [2003] became the basis for which inquiry was recommended to look into how effective the Act is in dealing with predatory pricing. Following the inquiry, some provisions were to be made which sought to give the court more mandate to deal with issues related to abuse of market power. So as opposed to as it was previously, the court may examine how a given corporation has been supplying goods persistently and at a price lower than the relevant cost insofar as the particular corporation is concerned. The courts also have the mandate to examine the reasons for that conduct.[32]


To encapsulate the whole issue, competition law should be flexible to accommodate the rapid changes that take place within the society. These changes create different circumstances for the competition process to thrive. This can further be illustrated by Boral Besser Masonry Ltd v ACCC (2003) 215 CLR 374 case. Any policies recommended, formulated or instituted should have the object of protecting the process of competition. As it was in the traditional setup, the contemporary set of competition law should aim at promoting the competition process and have an ultimate goal of protecting the final consumer against any harm. The fate of the competitors in the market should not affect the operation of the competition policy.

The laws should be adequately framed to accomplish apparent economic objectives so that ambiguity does or inadequacy does not thwart the process. This way, the legal system and particularly the government has to ensure that the set of competition law is able to stand relevance and effectiveness at all the time. Competition process may also lead to undesired results if it is left without introduction of limits. If it happens this way then it means in the long run there would be reduced competition as a result of weaker firms going out business. the powerful business will then be left and the market will be as worse as if there were no competition.

The question of whether TPA promotes competitive trading is one of a technical nature especially considering that the number of competitive corporate organisations have been limited over time while the few corporations have a considerably larger market share and therefore the competition they face is also considerably small. Given that real competitors reduce in number with increased corporate takeovers, the real competitors that ensure continuity in the competition process reduce thereby creating a market that has few corporations with powerful market share.[33] There are markets that can be thought of as incontestable here in Australia. Take an example of the airline industry, the banking and insurance industries and even the supermarkets.

The buying power which supermarkets have over small retailers is enormous and the Trade Practices Act has not achieved much in addressing such issue.[34] If the small retailers are to offer fruitful competitive force to these giants in the market, there must legislation that encourages the process and they should be sufficiently flexible to embrace the transitional needs of the market. While it is imperative that the competition should guarantee protection to the competition process, its effectiveness and efficiency in doing so should be assessed against the effectiveness and efficiency it induces inn the market systems. There should be increased variety of goods and services supplied or availed to the consumers in the market, high quality of products, timely provision of services and better prices.


Julie Brebner, 'The Relevance of Import Competition to Merger Assessment in Australia' (2002) 10(2) Competition and Consumer Law Journal 119-143 at 02 September 2009

E. Hope Competition Policy Analysis (2000).


A. Hollander & D. Encaoua 'Competition Policy and Innovation' (2002) 18 (1) Oxford Review of Economic Policy 63-79.

David J. Gerber Law and competition in twentieth century Europe: protecting Prometheus (2001).


F. Bradley The Rise of Global Manufacturing Competition (2008).

Kurtus Ron 'Competition in Business' (27 May 2007), at 28 August 2009

F. Bradley The Rise of Global Manufacturing Competition (2008).


Boral Besser Masonry Ltd v. ACCC (2003) 215 CLR 374

Michael E. Porter Competitive Advantage: Creating and Sustaining Superior Performance (1998).

D B Baumol & A. E. Burke 'Competition policy in dynamic markets' (2001) 19 (5) International Journal of Industrial Organization 613-634.

Bruce Greenwald & Judd Kahn Competition Demystified: A Radically Simplified Approach to Business Strategy (2005).

Kurtus Ron 'Competition in Business' (27 May 2007), at 28 August 2009

Bruce Greenwald & Judd Kahn Competition Demystified: A Radically Simplified Approach to Business Strategy (2005).

Julie Clarke 'Australia's Radical Predatory Pricing Reforms: What Business Must Know' (2008) 1 Deakin Business Review.

Julie Clarke 'Australia's Radical Predatory Pricing Reforms: What business must know' (2008) 1 Deakin Business Review 6 at 02 September 2009

Boral Besser Masonry Ltd v. ACCC (2003) 215 CLR 374

See also Ross Jones " The Future of Competition Law in Australia" (speech delivered at Melbourne Institute of Law, Melbourne, 5 December 2002)

Ross Jones, 'The Future of Competition Law in Australia' (speech delivered at Melbourne Institute of Law, Melbourne, 5 December 2002)

Samuel Graeme Promoting Competition and Fair Trading (Paper presented at the 2003 Melbourne Economic and Social Outlook Conference, Melbourne, November 2003).

Bruce Greenwald & Judd Kahn Competition Demystified: A Radically Simplified Approach to Business Strategy (2005).

E. Hope Competition Policy Analysis (2000).

D B Baumol & A. E. Burke 'Competition policy in dynamic markets' (2001) 19 (5) International Journal of Industrial Organization 613-634.

C Ross & P. Kaminski "The Use of Policies for Competition in the Promotion of Structural Change in Transforming Economies" (1999) 11 (2) Post-Communist Economies, 193-217.

Boral Besser Masonry Ltd v. ACCC (2003) 215 CLR 374

David J. Gerber Law and competition in twentieth century Europe: protecting Prometheus (2001).

The Consumer Action Law Centre which is a not-for-profit organisation in Australia submitted its recommendations in 2008 concerning the proposed amendments on section 46 of the Act.

for instance in the case of oligopolistic supermarkets.

For e.g. Gallagher v Pioneer Concrete (NSW) Pty Limited [1993] FCA 59 where Lockhart J held that there were acts that went in contravention of market competition where the accused (the lorry owner drivers) had entered into an agreement to restrict the number of trucks to be used.

reasons for supplying the goods at such low prices.

Michael E. Porter Competitive Advantage: Creating and Sustaining Superior Performance (1998).

Julie Clarke 'Australia's Radical Predatory Pricing Reforms: What business must know' (2009) 1(2) Competition Law Reports 86-92: Critical look at the 2007 Birdsville Amendments at 02 September 2009