SYDNEY—Planned changes to outlaw predatory pricing will benefit small retailers but won't mean consumers miss out on genuine sale prices expected from big business, consumer advocates say.
Federal Competition Policy Minister Chris Bowen has announced changes to the Trade Practices Act to protect small business from the anti-competitive actions of larger firms.
Under the changes, victims of predatory pricing will no longer need to prove the guilty party is able to recoup its losses from undercutting its smaller rival.
The new laws will strengthen the powers of the Australian Competition and Consumer Commission (ACCC) to investigate predatory pricing.
Small business will also be given permanent representation within the ACCC.
Mr Bowen said the new rules would make it easier to prosecute large companies guilty of trying to drive smaller rivals out of business.
"People, including the ACCC and small business groups, have not brought predatory pricing cases because they don't feel they can meet that very high level of evidence that the High Court has required of them," Mr Bowen told reporters.
"I believe these reforms will see more predatory pricing cases come forward because more people will be able to make that case."
The changes will scrap a law sponsored last year by Nationals senator Barnaby Joyce, which the ACCC had argued was poorly drafted.
ACCC chairman Graeme Samuel said the changes would give the body the powers needed to stop predatory pricing.
"For the past 35 years, it's been clearly evident that the section (regarding predatory pricing) has not been achieving the purposes that were intended by parliament when it was enacted back in 1974," Mr Samuel told ABC Radio.
Christopher Zinn, spokesman for the consumer organisation Choice, said the government had struck a balance between protecting small business and preserving one-off "loss leader" sales campaigns that do not resemble predatory pricing.
"It shouldn't mean that suddenly you won't be getting specials of the week at Woolies or you won't be getting five cent flights on Jetstar," Mr Zinn told AAP.
National Independent Retailers Association chairman Tony Steven supported the amendments, but said future changes were needed to increase competition in markets such as the grocery store industry.
"So that competitors look at the customer and their behaviour rather than their competitors' behaviour, which happens when there's only a few players in the marketplace," he said.
A Woolworths spokesman said the supermarket giant supported the changes.
Federal opposition spokesman for small business, Steven Ciobo, called most of the changes "window dressing", but gave broad support to the proposed amendments.
"The devil will be in the detail, but on the face of it, it would seem reasonably sound," he said.
Mr Bowen said the proposed Trade Practices Act changes, including jail sentences for people found guilty of cartel behaviour, were expected to become law later this year.
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