ACCC warns on cartel law changes The consumer watchdog has warned Australia's cartel laws could be significantly weakened under proposed changes to competition rules. The Harper competition review released its draft report in September, and it included ways to "simplify" key areas of competition law. The Australian Competition and Consumer Commission said it supported most of the measures but had "serious reservations" about changes to cartel prohibitions. "In the ACCC's view such changes would significantly weaken Australia's cartel laws," it said in a submission. Whilst the ACCC supports simplification, any amendments should not fundamentally alter the existing scope of the prohibitions. Cartel conduct occurs when companies collude over the price of a goods or service, eroding market competition. At present, the law applies to any two companies operating in Australia that are supposed to be in competition with one another, with few exemptions. The review panel said the laws should be changed to narrow the definition of "competition," and allow for exemptions for companies whose main market was overseas, or part of a joint venture. It said the existing laws were too narrow and increased compliance cost to business. But the ACCC said the changes would pose significant risk. The ACCC considers the cartel provisions should not be amended to be limited to markets in Australia. It would risk substantively undermining the efficacy of the cartel provisions," it said. It said narrowing the definition of "competition" would potentially allow firms that engage in conduct that meets the OECD's definition of "hardcore cartel conduct," such as market sharing, to escape sanction. It also said broadening exemptions for joint ventures would put the onus on the regulator to prove that conduct occurred because of a specific "contract." "The majority of cartels prosecuted by the ACCC involve legally unenforceable arrangements or understandings rather than legally enforceable contracts," it said. Given the per se illegality of cartel conduct, much conduct of concern is likely to be clandestine in nature. ACCC chairman Rod Sims said simplifying the law should not mean weakening it. "The ACCC strongly considers that it would be inappropriate to confuse specific policy issues with a focused simplification agenda," he said. These should be quite separate exercises; the specific policy changes to competition law can be done initially, followed by a more-focused simplification exercise. The review panel, via the Treasury, was not available to comment on Wednesday. The panel has received hundreds of submissions on its draft report. It will consider the submissions in the coming months before handing down its final report to the government in March.