The Institute of Public Accountants (IPA) has supported the passing of the proposed Misuse of Market Power Bill but believes the greatest deficiency is the judicial interpretation of the phrase "take advantage".
The IPA said it continued to advocate for an "effects test" to be introduced and were pleased the bill was consistent with the Harper Review in relation to misuse of market power and that it provided that a corporation with substantial market power must not engage in conduct having the purpose of likely effect of substantially lessening competition in that or any other market.
IPA chief executive, Andrew Conway, said: "To date, the misuse of market power provision has not adequately protected small business, and by extension consumers, from the predatory actions of companies with substantial market power".
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"The most significant deficiency with the current test is that, through narrow judicial interpretation of the phrase ‘take advantage', it does not catch conduct by firms with market power, when the same conduct could have been carried out by a firm without market power," he said.
Conway said it failed to recognise that conduct capable of being engaged in by firms without market power has a greater propensity to foreclose the market and produce economic harm when it was engaged in by firms with market power.
"The proposed s46(1) in the Misuse of Market Power Bill is significantly more convoluted than that proposed in the Harper Report. This has resulted from attempts to define, in some detail, the market or markets in which the substantial lessening of competition must occur," he said.
"In particular, it specifies that the substantial lessening of competition must occur in the market in which substantial market power is held, or any other market in which it, or a related body corporate, supplies or acquires goods or services.
"The IPA believes this amendment to be unfortunate and that it unnecessarily complicates the law."