Rod Sims: A competition saint for small and all
You might get the impression that I think Rod Sims did a pretty good job. Well you’d be wrong — he has done an amazing job, writes Peter Strong.
As we prepare for a changing of the guard at the ACCC, will the new chair, Gina Cass-Gottlieb, continue the ‘care for small, care for all’ philosophy that typified the approach of the outgoing chair, Rod Sims? One who understands that strong competition occurs when where there is a good diversity in market participants — businesses that are big, small, in the middle, growing, startup, family, sole traders, contractors, tradies, innovators, established, suppliers, and more?
Competition policy is not just about price — it is also about choice, access, being different, quality, long-term health, innovation, community, global trade and seeing people as the issue, not the ideology.
If it was just the ideology, the various segments of our markets would be dominated by a small number of big players only. Such is the mindlessness of the laissez-faire economists, and a sole focus on price rarely delivers sustainable competition outcomes. Just look at the Australian grocery sector.
Which brings me to Rod Sims. You may read the next few paragraphs and get the impression that I think he did a pretty good job. Well you’d be wrong — he has done an amazing job. He made the Australian community a better place and he helped to make our economy one of the most resilient in the world.
And more than that, Rod recognised that small businesses are essential to the fulfilment of sustainable competition outcomes.
During his time, Rod created a strategy for a market that responded to fairness and the reasonable interests of small businesses. In doing so, it ensured the longevity of competition in specific markets and through that, a diversity in our business community and in our communities themselves.
Rod achieved outcomes — with others in support — that the small business community have been seeking for decades. The list of achievements is long.
Effects test, unfair contracts and more
Chief among these were the introduction of the effects test into competition policy, which sought to provide greater safeguards against damage caused to small business by bigger businesses misusing their market power. There’s still more to be done, but as always change starts somewhere. The ‘effects test battle’ was willing, long, full of backdoor agreements, and in the end, due to the resilience of Rod and small business association leaders (and former small business minister Kelly O’Dwyer) the change was achieved.
Rod also oversaw the introduction of changes in contract law to remove unfair contract terms that unduly constrained the rights of small businesses — and then continued to push for the introduction of higher thresholds for these laws to take effect, including sanctions for those big businesses that failed to adhere to the legislative changes. While some — mostly big businesses — wrongly argued that the ‘buyer beware’ principle meant the onus should be on the small business owner to wade through complex and lengthy B2B contracts, Rod recognised that there are a series of basic principles of fairness that cannot be made valid by ‘tricky’ complicated contracts.
Rod also confronted the destructive impact of high value “shopper dockets” that the two big supermarkets used to systematically destroy small independent businesses in both the supermarket and fuel retail sector. Previously, the ACCC had ignored the arguments of small business about the abuse of this process and told us all that it was just ‘competition’.
But Rod Sims looked at the merits of our arguments and then took action. There are independent small businesses in both of these sectors that would not be in existence today had it not been for the action of Rod and his team on this issue. The community has greater choice and cheaper prices as a result.
Rod was also instrumental in changes to the business payment system, EFTPOS and credit cards and least cost routing. Again, and again, and again he listened to what all sides had to say — not just to those with huge teams of narrow-minded boffins, but to those with access to the broader business community and real facts.
He was also up to confronting some of our shadow regulators, those who act like a government agency but actually do not report to anyone of import. There was not much he could do about GS1 and the monopoly on barcode management, but he didn’t just dismiss our concerns as too hard — he listened, he looked, he offered advice and then having done all he could concentrated elsewhere.
APRA AMCOS has a monopoly on royalties in the music sector and has a history of allegedly harassing small business folk to make payments under a dubious fee structure — the majority of this money being paid to big music companies in America and Europe as opposed to the musicians themselves, particularly Australian musicians. Sims and his well led team apparently saw through this house of cards, confronted it and laid the foundations for change. This would not have happened prior to Rod Sims, and while there is still more to do, we have a start.
A leader who listened, and acted
These achievements weren’t easy. It was hard work, and it was done through increased engagement and communication with all the various big and small business associations, where Rod and his team gave and sought information and opinion; where he valued what he heard; where he would challenge us and want us to challenge him; where he showed respect and did not talk down to business folk as though we were uneducated and needing to be taught lessons.
This is important as for too long competition policy was the domain of big business representatives, such as the Australian Chamber of Commerce and Industry and the Business Council of Australia, and the small business community was seen as seeking protection when all we wanted was fairness.
We don’t discount that the small business ministers Rod dealt with, mainly Bruce Billson and Kelly O’Dwyer, were supportive as well. But with a different ACCC chair their desire to implement change would have been much harder to achieve.
Rod has a backbone. He did not back away from court challenges out of fear of losing, and he made professional judgements based upon resources, the proper advice, the needs of society and the economy. Interestingly he didn’t see a negative outcome in court or in parliament as an end, he saw it as part of the process of change and was an example to industry that change does take time.
He was persistent with policy pressure and did not let criticism from some media commentators, industry or politicians, get in the way of pursuing what he saw as right and necessary.
What was at times amusing was when someone — from big or small businesses — tried an argument that was nonsensical or from a point of self-interest. He firstly used humour to show what was wrong with the argument before he moved into much more sterner and forthright responses. Like all great regulators he had a soft touch — until he didn’t.
And so, as we farewell the ACCC chair who has done the most for ensuring that all businesses, regardless of size, are able to compete fairly, we wish Rod Sims the best for his future.
Our hope is that the incoming chair also recognises the value that comes from continuing to engage the small business sector in competition dialogue.
We wish Gina Cass-Gottlieb the best in her new role and we know she will do it her way. We ask that this includes an understanding, and matching actions, of small businesses as people – not numbers or fodder or stupid. Small businesses people give futures to over half the workforce and they make our community healthy.
