Comments on Stephen Bartholomeusz “Plan
B for the ACCC”, 21/01/2012,
http://www.businessspectator.com.au/bs.nsf/Article/ACCC-Rod-Sims-Metcash-Franklins-Austar-Foxtel-take-pd20120120-QP4CX?OpenDocument&src=sph&src=rot
It was an interesting case by the ACCC
bordered on bizarre, considering the Wesfarmers acquisition of Coles
was done, while the ACCC had objected the Metcash' Franklin case.
For a market regulator to rely on
theoretical argument without putting into a proper practical and
commercial environment reflects how out of touch government
organisations can be.
The ACCC should adopt a similar
approach to the Productivity Commission in using applied model in
testing and determining its decisions. The PC, from its predecessor,
the Industry Commission, has been using models, including CGE models
to study complex economic cases for policies.
The sort of models the ACCC would need
to use may be different from those used by the PC, but modern
contemporary merger and acquisition cases can only properly
understood by informed studies from using practical models.
ACCC must have a clear overall goal to
ensure market competition, efficiency and consumer welfare and use
the best applied models available to measure it. Otherwise it will
fail in its regulation of the market to enhance Australian welfare.
I would argue that many of ACCC
decisions did not have a clear measure how much gain/loss should that
case be or not be allowed.
In that context, it is high time for
the plan B to be used!
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