It wasn't as advertised
Legislation introduced into parliament Thursday to crack down on price signalling by banks has a much wider application and could soon be used to regulate firms such as petrol retailers and supermarkets, leading competition lawyer says.
Treasurer Wayne Swan told parliament the price signalling amendments to the Competition and
Consumer Act would mean the "big end of town" could no longer "dud Australian families" on interest rates.
But the bill itself is broader, applying to whatever classes of goods and services are "prescribed by the regulations".
"Once it becomes law it could be made to apply to other sectors of the economy without proper debate," said Allen & Overy competition partner Dave Poddar.
"In my view the draft regulations that will specify the industry sectors should be released at the same time as the bill so business and the parliament can properly consider them"...
A cabinet briefing sent to Mr Swan in October by Treasury released under the Freedom of Information laws warns that a series of court decisions had made it increasingly difficult for the Australian Competition and Consumer Commission Commission to prove collusion.
It says consumer laws should be changed to give the commission sweeping powers to impose so-called per se bans on the private exchange of pricing information between competitors, eliminating the need to prove an explicit intention to collude.
It is understood that when the regulations are made public they will only prescribe banks. The Treasurer will extend them to other sectors after detailed review and consideration.
Mr Swan told parliament the new law would convictions where banks gave each other a "nod and a wink" about plans to raise interest rates even where it wasn’t written down and signed in blood.
It includes exemptions allowing for disclosure to the stock exchange and where banks need to exchange information because they are part of a lending syndicate.
Published in today's SMH and Age
. What Treasury told Swan on banks
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. How FuelWatch will help