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Should ComCom have more teeth?

31 Oct 2012

Consumers could be the big losers after the Commerce Commission rubber-stamped Vodafone’s purchase of TelstraClear.

That is according to Labour's Communications and IT spokesperson Clare Curran, who made the claims as the telco firm completes the sale of its rival today.

“The Commission’s approval of the deal leaves just two major players in the market – and that could result in higher prices for consumers down the track," Curran says.

"The approval is further confirmation that issues of market competition aren’t getting the level of scrutiny they deserve.

“This decision clearly reduces competition in the telecommunications sector.

"It leaves consumers with fewer options, and makes them more vulnerable to anti-competitive behaviour.

“Who’s going to monitor that? And if it’s found to be occurring will it be properly addressed? Court cases resulting from price-fixing and duopolistic behaviour take years to resolve and in the meantime the consumer suffers."

Curran says that Commerce Commission Chair Mark Berry gave a strong signal to the Commerce Select Committee last week that a wider review of competition law was needed.

Submitting on a rewrite of cartels legislation he said; “in our view some work remains to be done. In particular, section 36 of the Commerce Act 1986 continues to be problematic to enforce and would benefit from reform.”

“The Government should listen to the Commission’s warnings," Curran says.

"There have been numerous court cases over whether a dominant player has wrongly used its market strength that have ended inconclusively because of shortcomings of the Commerce Act.

“The telco sector is fast changing and relies on innovation and affordable pricing for consumers. Today’s decision shows that our competition watchdog is struggling to keep pace with the realities of the 21st century.

“Reacting to anti-competitive behaviour is one thing. But surely preventing it occurring in the first place is the most important thing.

“Strong competition law is essential for the economy to flourish. The time may have come for a good look at our laws to see if they are still up to the job."

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