{"id":143873,"date":"2021-11-05T19:27:07","date_gmt":"2021-11-05T19:27:07","guid":{"rendered":"https:\/\/precoinnews.com\/?p=143873"},"modified":"2021-11-05T19:27:07","modified_gmt":"2021-11-05T19:27:07","slug":"iron-rod-why-the-acccs-top-dog-isnt-for-turning","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/economy\/iron-rod-why-the-acccs-top-dog-isnt-for-turning\/","title":{"rendered":"Iron Rod: Why the ACCC\u2019s top dog isn\u2019t for turning"},"content":{"rendered":"

By Sarah Danckert<\/span><\/span><\/p>\n

<\/p>\n

Rod Sims Chairman of the Australian Competition and Consumer CommissionCredit:<\/span>Nine<\/cite><\/p>\n

For Melbourne-headquartered ANZ Bank, \u201cFreedom Friday\u201d on October 30 came an hour before the 6pm state set deadline for the lifting of most COVID-19 restrictions on hospitality venues and mask-wearing outdoors.<\/p>\n

Around 5pm the bank\u2019s legal officers received a letter from the Commonwealth Director of Public Prosecutions (CDPP) that ended the competition watchdog\u2019s criminal cartel case against ANZ.<\/p>\n

In the letter, prosecutors declared they would drop all charges against ANZ and executive Rick Moscati over allegedly forming a cartel with three investment banks during ANZ\u2019s 2015 capital raising to maintain the price of the bank\u2019s shares. The criminal cartel case against the other defendants in the trial \u2013Citi, Deutsche and select executives from each bank, all of which were CC\u2019d into the CDPP\u2019s letter to ANZ \u2013 continues. (The third bank, JPMorgan, has received immunity for turning prosecution witness.)<\/p>\n

The dropping of charges against ANZ was a bruising defeat for the Australian Competition and Consumer Commission (ACCC) in one of its biggest cases in recent years. This week Justice John Wigney described the indictments prepared by prosecutors for the remaining defendants as a \u201ccomplete shemozzle\u201d.<\/p>\n

It\u2019s a big courtroom loss at the end of the near eleven-year reign by ACCC chair Rod Sims \u2013 who\u2019s second five-year-term finishes on August 1. Sims indicates he won\u2019t seek a third term, telling The Age<\/em> and The Sydney Morning Herald<\/em> he thinks he\u2019s held the position for long enough.<\/p>\n

The ACCC\u2019s mixed criminal cartel case scorecard in the past 12 months has taken focus away from the regulator\u2019s important victories under Sims\u2019 watch. This includes its successful consumer protection cases as well as its vigorous in-depth market studies and guidance directives to improve consumer and market outcomes in industries as diverse as telecommunications, electricity, gas pipeline lines, the Murray Darling Basin and digital platforms. There have also been losses, particularly in its courtroom challenges to mergers and acquisitions.<\/p>\n

Defiant, out-of-step with corporate Australia, or the people\u2019s hero. How you view competition tsar Sims often depends on whether you sit on the defendant\u2019s side of the bar table or are a consumer or small business.<\/p>\n

<\/p>\n

Rod Sims\u2019 father\u2019s garage in Lorne, Vic, which the ACCC chairman still calls home when he\u2019s not in Sydney. <\/p>\n

Raised in Lorne on Victoria\u2019s Surf Coast, Sims graduated from Melbourne University and went on to build a successful career as both a regulator, an economic adviser to the Hawke government and a corporate adviser to large companies before joining the ACCC in 2011 as chairman.<\/p>\n

He has been described as the most feared man in Australian business wielding incredible power to shape the Australian corporate landscape and market behaviour.<\/p>\n

Other regulators envy Sims who has escaped public lashings from Treasurers (unlike the corporate watchdog) and has been granted a wide remit by the government thanks to the ACCC\u2019s incredible success over his ten-year tenure.<\/p>\n

\u201cWe have a market economy, which means people pursue the profit motive, which I think is terrific. It\u2019s the best way to organise ourselves as an economy. But that means you need some checks, you need the ACCC to be out there sending deterrence messages, and that\u2019s what we\u2019re doing,\u201d he says.<\/p>\n

\u201cYou don\u2019t want to be too cautious in that,\u201d he says.<\/p>\n

Sims readily riffs off the ACCC\u2019s achievements under his stewardship. This includes (perhaps controversially) the watchdog\u2019s roster of criminal cartel cases. It also includes the organisation\u2019s advocacy that secured higher penalties for breaches of consumer getting the law changed in relation to market misuse powers (known as Section 46) and new laws about unfair contract terms.<\/p>\n

<\/p>\n

One of Sims\u2019 greatest achievements will be taming tech giants through his digital platforms inquiry. Credit:<\/span>Louie Douvis<\/cite><\/p>\n

Sims also cites the organisation\u2019s advocacy in relation to the lack of regulation around monopoly infrastructure and achieving better regulation of gas pipelines, as well as, its market studies on the Murray Darling Basin and digital platforms. He\u2019s particularly pleased by how quickly the ACCC reacted to the pandemic, which included providing 30 authorisations to companies to allow them to work together without running afoul of the law.<\/p>\n

\u201cWe moved pretty quickly, and I was pleased that we were able to do that and play whatever role we could play in helping us all get through the crisis,\u201d he says.<\/p>\n

On his losses, Sims is often unrepentant. He frequently speaks out after a court case to push for law changes rather than issuing any statement of regret. It is the same story with the ANZ cartel case.<\/p>\n

\u201cTo be completely clear, our role in criminal cartel matters is to do the investigations. We put them to the CDPP, they can take around six months to go through it all and decide what they want to do — whether they want to lay charges; how many charges; against whom, that\u2019s all decisions they make.\u201d<\/p>\n

\u201cAnd obviously, they\u2019ve decided to narrow the charges. That\u2019s completely their call,\u201d Sims adds.<\/p>\n

He is also quick to defend the ACCC\u2019s approach to criminal investigation amid criticisms from the defence barristers during the ANZ capital raising cartel case about its evidence collection processes.<\/p>\n

\u201cCriminal (cases), obviously, is a different matter, and needs different processes,\u201d says Sims.<\/p>\n

\u201cWe\u2019ve got people with quite a lot of experience in criminal matters inside the ACCC. But obviously, the defence barristers\u2019 it\u2019s their job to try and unpick these things. I respect that,\u201d he says, before quickly adding what could be interpreted as a minor concession: \u201cLook, we always look at our processes.\u201d<\/p>\n

Outside its criminal cartel cases, the ACCC has also copped flack for its approach to mergers and acquisitions from some of Australia\u2019s biggest companies. ACCC\u2019s decisions to block mergers have been routinely overturned at the Federal Court.<\/p>\n

In fact, the regulator hasn\u2019t won a merger case before the courts in over 20 years and often roundly criticised for failing to understand the nuances of market forces in its challenges to corporate marriages.<\/p>\n

<\/p>\n

Extremely private David Teoh, then TPG boss, gave evidence at the TPG-Vodafone Federal Court competition case. Credit:<\/span>Getty<\/cite><\/p>\n

Sims, in his defence, points to the influence merger parties can have on the press when pursuing an ACCC-contested tie-up.<\/p>\n

\u201cAs you find with most things, in particular the commercial world, people look at things through their own prism. And merger parties always think there\u2019s no competition issues.\u201d<\/p>\n

\u201cObviously, they then hire a range of advisers who advocate on their behalf. They advocate hard, and they talk to a lot of journalists. I get that.\u201d<\/p>\n

\u201cIt\u2019s a strong push by journalists to report those things that are said, but merger control is a really important thing that competition regulators do because once someone has market power, it\u2019s very difficult to stop them exercising it.\u201d<\/p>\n

<\/p>\n

The Federal Court is where the ACCC has lost many of its competition cases, while also winning key court cases for consumers. Credit:<\/span>Edwina\u00a0Pickles<\/cite><\/p>\n

Linda Evans, a partner at law firm Herbert Smith Freehills, is one of Australia\u2019s leading competition lawyers and has worked on complex merger and other competition issues with Pacific National, Vodafone, and Seven West, among many other blue chip clients.<\/p>\n

She says there are clear issues with the way the ACCC has run its merger court cases.<\/p>\n

\u201cI would have chosen different cases, and I would have run some of their cases differently\u201d<\/p>\n

\u201cThey have the view that capital markets work perfectly — and they don\u2019t. It is not simple to write long-term contracts and there are real challenges in getting funding when backing uncertain demand and investing in new technology\u201d<\/p>\n

Sims recently again raised concerns with the competition law sector proposing a formal merger register where the ACCC would have a much greater say on the outcome rather than Federal Court judges.<\/p>\n

He says the speech was intended to spark debate. It has.<\/p>\n

Evans has concerns about the proposed changes to the current merger review process<\/p>\n

\u201cFor example, the proposal to reverse the onus of proof so that it falls on the entities looking to merge rather than the regulator. This proposal is different from that used in other countries and not justified, she warns.<\/p>\n

\u201cThat\u2019s not the way anywhere else works.\u201d<\/p>\n

But Evans also has praise for Sims. Particularly his work for consumers and in market inquiries.<\/p>\n

\u201cHe\u2019s done a great job in increasing the role of the regulator in consumer protection matters. Allan Fels really started that. And Rod has continued that, and he\u2019s done a great job in arguing for and using hefty penalties for consumer matters.\u201c<\/p>\n

\u201cSome of the work they\u2019ve done in the market inquiry space, for example on digital platforms \u2013 whether you agree with everything they\u2019ve said \u2013 the work that they\u2019ve done has been substantial and intellectually rigorous.<\/p>\n

<\/p>\n

Choice CEO Alan Kirkland says Sims has made a significant contribution while leading the ACCC. Credit:<\/span> <\/cite><\/p>\n

Alan Kirkland, the chief executive of Australia\u2019s top consumer group CHOICE, knows Sims well, having worked closely with the ACCC and its chairman since 2012.<\/p>\n

\u201cI think the ACCC has been a fantastic regulator when it comes to consumer protection. And I think that if you look at the way in which politicians and the way people talk about the ACCC in political debate, and in the media, it is quite different to the way in which they talk about ASIC and I think that is because the ACCC has demonstrated that it\u2019s able to take really effective action to protect consumers.\u201d<\/p>\n

Kirkland has been particularly impressed by the ACCC\u2019s ability under Sims to extract positive outcomes for consumers through a range of regulatory measures — from criminal and civil cases to education programs, and sometimes a quiet chat or a public lashing.<\/p>\n

\u201cIf you look at what happened last year, when millions of people had travel plans cancelled due to COVID. The ACCC in a really short period of time was able to force Qantas to back down and offer refunds to people rather than just travel credits.\u201d<\/p>\n

\u201cI think that businesses, boards and CEOs understand that Rod Sims is a powerful force,\u201d he says.<\/p>\n

Sims would argue that it is far too early to talk of his departure when his contract runs until next August. But given the calibre of person required to fill his shoes, the federal government and the states that help inform its decision better get the ball rolling on the search.<\/p>\n

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion.<\/i><\/b> Sign up to get it every weekday morning<\/i><\/b>.<\/i><\/b><\/p>\n

Most Viewed in Business<\/h2>\n

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By Sarah Danckert Rod Sims Chairman of<\/p>\n","protected":false},"author":3,"featured_media":143872,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23052],"tags":[],"yoast_head":"\nIron Rod: Why the ACCC\u2019s top dog isn\u2019t for turning - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/economy\/iron-rod-why-the-acccs-top-dog-isnt-for-turning\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Iron Rod: Why the ACCC\u2019s top dog isn\u2019t for turning - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"By Sarah Danckert Rod Sims Chairman of\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/economy\/iron-rod-why-the-acccs-top-dog-isnt-for-turning\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-11-05T19:27:07+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/11\/Iron-Rod-Why-the-ACCCs-top-dog-isnt-for-turning.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/economy\/iron-rod-why-the-acccs-top-dog-isnt-for-turning\/\",\"url\":\"https:\/\/precoinnews.com\/economy\/iron-rod-why-the-acccs-top-dog-isnt-for-turning\/\",\"name\":\"Iron Rod: Why the ACCC\u2019s top dog isn\u2019t for turning - 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