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Competition review and FSI worlds collide

Competition review and FSI worlds collide

March 28, 2014 10:55 AM | Posted by Paul Schoff | Print this page

The intersection of financial services and competition law is very important for the FSI. The FSI terms of reference are only two pages long, but refer to 'competition' and 'competitiveness' no less than five times.

The Murray Panel's competition analysis needs also to look sideways, or perhaps over its shoulder, because there is a concurrent 'Root & Branch' review of competition law in Australia which will significantly overlap with it. The panel and final terms of reference were announced on 27 March.

The panel includes my former Minters partner, Michael O'Bryan, who we know will be rigorous. It covers five broad areas: review of Competition & Consumer Act, performance of the ACCC, concentrated sectors like fuel retailing and grocery, regulatory impediments to competition, and government businesses.

There are many potentially significant overlaps, for example:

  • cartel price signaling rules apply only to Banks and the competition review will look at why they haven’t been used and whether they should be extended to other sectors; 
  • privatisation of government service delivery businesses such as Australia Post is in the competition remit and this is a potentially leading financial services business;
  • the competition review will have to grapple with the operation of competition law to distribution of financial products, after a case involving ANZ and brokers where the ACCC tried to say they were competitors.

The two reviews will need to keep a close eye on each other.

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