Home topics news Economy News Retail Economy New “effects test” to give a leg-up to SMEs Joe Kelly September 22, 2014 Small business has won a victory with a new proposal giving the competition watchdog more scope to act against major companies that use their market power to stifle competition. The government’s competition review panel led by Professor Ian Harper today released its draft report backing the inclusion of a contentious “effects test” in section 46 of the Competition and Consumer Act. The proposal lowers the threshold at which the Australian Competition and Consumer Commission (ACCC) can take action against major businesses on grounds they have misused their market power. Instead of proving a business acted for the “purpose” of reducing competition, the proposed change means the ACCC need only prove the “effect” of the business’ behaviour was anti-competitive. Peter Anderson, one of the four members of the competition review panel and former head of the Australian Chamber of Commerce and Industry, told Dynamic Business this proposal was a “substantive change to the law in respect of misuse of market power”. “By moving to this new form of an effects test we have lowered the bar where there is a substantive complaint of misuse of market power,” he said. “(Currently) the ACCC has to prove that the dominant party has not just market power, but that they are taking advantage of that market power for the purposes of damaging a competitor. The prosecutor has to prove the purpose of the