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!