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Competition boss wears frustrations of his post lightly

ACCC chairman Rod Sims does believe in the free market yet is no ideologue when to comes to redressing abuses, writes Ruth Williams.

ACCC chairman Rod Sims does believe in the free market yet is no ideologue when to comes to redressing abuses, writes Ruth Williams.

Ask Rod Sims what has frustrated him in his two years as Australia's competition tsar and he demurs. "I don't actually do frustration as an individual," says Sims. "I'm about as glass half-full as you'll come across."

But Sims - economist by trade, regulator by choice and a passionate free-marketer by persuasion - admits there have been "challenges".

This week alone, Sims drew criticism for both being too interventionist and "all talk, no action" in the wake of a speech he gave on the vexed issue of supermarket fuel discount dockets, which the Australian Competition and Consumer Commission is investigating.

"I accept that every time I put my head above the parapet, which is what I did on Monday, that it's going to get shot at in various ways," Sims says in response.

There's the constant scrutiny over the ACCC's other high-profile investigation on the supermarket giants - their treatment of suppliers - which has been slowed down by the reluctance of the suppliers themselves to volunteer information. The ACCC has since used its powers to force the handover of evidence.

As for the debate about the regulation of access to Australia's crucial grain ports - "bottleneck infrastructure" held in near-monopolies - well, that is one issue on which this pro-markets regulator will admit to some frustration.

"I want to argue pro-market, less regulation, I'm all for that. But you do the cause a disservice by saying, 'I don't want to regulate bottleneck infrastructure.'

"People then just see you as an unworldly ideologue."

And Sims is anything but unworldly. He has worked as a development economist in Papua New Guinea and - before starting at the ACCC - led InfraCo Asia, which develops energy, transport and water projects in low-income countries.

And while he's no ideologue either, it's true that he views himself as an advocate not only of the organisation he heads, but of the virtues of the free market itself.

"I'm both trying to improve the way the market economy works, but also improve the faith Australians generally have in that market economy," he says.

"Because you don't want cynicism out there, you want people feeling engaged and feeling that, if things aren't as they should be, we are there to address them."

Sims, who marked his second anniversary at the ACCC on Thursday, has worked at the highest levels of government - serving for two years as economic adviser to Bob Hawke - and at the pointy end of the corporate world, as a consultant specialising in mergers and acquisitions at Port Jackson Partners.

He has experience as a regulator too, as head of the NSW Independent Pricing and Regulatory Tribunal.

By 2011, when he was approached by former Treasurer Wayne Swan about joining the ACCC, he had pulled together a "lovely" portfolio of seven or eight roles, including the gig at InfraCo and one as expert adviser to the prime minister's multi-party Climate Change Committee.

The ACCC job was so attractive that he was "happy to give all that up", he says, adding that he enjoys the variety involved in running an organisation whose activities span multibillion-dollar mergers, utility regulation and consumer protection issues - such as the safety of children's clothing.

But two years into the role, it seems likely that the ACCC's pursuit of the supermarket giants will dictate whether Sims' tenure is considered a success.

After all, if you're trying to persuade Australians that the ACCC has teeth, few scalps would be as telling as the retailers that most Australian households deal with every week - especially after you've flagged concerns about their conduct in such a public fashion.

Sims himself baulks at this suggestion, while "accepting" the public interest in the investigations. "I understand that people are watching."

But, as Sims points out, the ACCC has about 100 detailed investigations on hand. It has recently secured some big wins on consumer protection issues: last month, the Federal Court forced software giant Hewlett-Packard to pay $3 million for distributing misleading product warranty claims to consumers and retailers.

Last year, Apple agreed to pay a $2.25 million fine and court costs of $300,000 for running misleading advertisements about its iPads.

But it recently lost a long-running court battle with Google over allegations the internet giant had engaged in misleading or deceptive conduct over sponsored links provided in web searches; the ACCC had won in the Federal Court, but the decision was overturned by the High Court.

Yet none of these have garnered as much attention as the two investigations into the market power wielded by Coles and Woolworths, which strenuously maintain they have done nothing wrong.

The ACCC's probe on shopper dockets, launched last year, continues, with interviews taking place this week and findings expected by the end of the year. "We wouldn't be this far in an investigation if we didn't think we had a way forward on this," he says. "We've gathered a lot of information, we are still talking to people."

And its investigation into the supermarkets' treatment of suppliers - including alleged threats to remove products from supermarket shelves if claims for extra payments or penalties are not paid - is also progressing, with the ACCC recently suggesting that information it has received "appears to give some credibility to allegations".

Which leads to what Sims says is his biggest challenge - persuading Australians that the ACCC is doing its job, and explaining what that job actually is. For instance, he is bemused that some interpreted his comments this week as complaining that he wasn't able to ban shopper dockets.

"We don't have the power to ban, and nor should we. I don't want the power to ban shopper dockets," he says.

"I don't think anybody wants an ACCC, if they stop and think about it, that has the power to ban this or ban that. That's power beyond what any organisation like ours should have. We're about protecting the competitive process, we're not about protecting individual competitors, and we need to collect evidence before we go to court."

Going to court, however, is something that Sims is pushing the ACCC to do more, and he is willing to wear some losses as part of the less conservative approach.

Current cases include the Coles bread claims, which centre on whether bread partially baked and frozen off site, then "finished" in store, can be dubbed "Freshly Baked In Store" and "Baked Today". A focus on cracking down on so-called credence claims has also seen it clamp down on "free to roam" claims for chickens.

The ACCC is flexing its newly bestowed powers to impose fines for breaches of consumer laws - powers that Sims' immediate predecessor, Graeme Samuel, pushed for for years but only enjoyed in the final months of his tenure.

"In terms of people having faith that a market economy works for them, they see companies that they know of getting these penalties for not complying with the Australian consumer law and that helps," Sims says. "But, most importantly, it helps with wider deterrence."

In a focus on big companies - "because that's where we think the major detriment is" - it has taken on the likes of Dulux, AGL and EnergyAustralia, as well as Apple, Google and Hewlett-Packard. Nine companies have paid penalties of $1 million or more for breaches of consumer laws.

"I do think that the larger penalties, and we've had nine so far on the consumer side, does get the attention of boards and executives," Sims says.

"My feeling is that companies are now taking their compliance with the Australian consumer law a lot more seriously than they were, and I think that's terrific."

Sims is also keen for the ACCC to secure a criminal conviction over cartel behaviour, of which he suspects there is still an "uncomfortably large" amount going on in Australia.

The ACCC's famed immunity policy - which grants immunity from prosecution to the first member of a cartel who blows the whistle - leads to at least one immunity application every month. Most result in investigations, Sims says.

"We've got a large number on foot. It shows that there is a lot of cartel activity still going on in Australia," Sims says. "I think, unfortunately, we are going to have to take a criminal case to really get the message out there. That's what the criminal sanctions are there for. Regrettably I think that's what's going to have to happen, and we do have some criminal investigations on foot."

Sims also confirms that the ACCC is continuing to investigate an alleged conversation between casino magnate James Packer and John O'Neill, the chairman of Crown rival Echo, on Mr Packer's boat on Sydney Harbour in March this year. "Yes, that's continuing," he says.

According to O'Neill's account of the meeting, Packer is alleged to have pledged to keep his Crown casino empire out of Brisbane if the executives of Echo Entertainment, owner of Sydney casino The Star, agreed to let him into the Sydney market. Packer has denied the claims through his adviser, Mark Arbib, who last month said this version of events was "false". Arbib was at the meeting.

"We've acknowledged that when people make those sort of claims, we would look at them," Sims says. "We are."

It's not just that the ACCC must do its job - it must be seen to be doing it, too.

The dust may be settling on his shopper docket speech on Monday, but Sims knows it won't be long before he must stick his head above the parapet again.

And this doesn't particularly bother - or frustrate - him.

"When the press is running wild with discussions [for example] on shopper dockets or supplier issues with the supermarkets, we need to communicate what we're doing, because if we don't the accusation is we're doing nothing," he says. "And that affects the reputation of the ACCC, and more importantly, although that's fairly important, it then affects people's faith in the market economy. If we don't talk it feeds that cynicism.

"The idea that a regulator should be seen and not heard, which is what some people would like us to be, is not right."

Top complaints to ACC

by industry

1. Online retailing

2. Fixed telecommunications

3. Other store-based retailing

4. Electricity retailing

5. Motor vehicles (faults)

6. Department stores

7. Car retailing

8. Air transport

9. Other electrical and electronic goods retailing

10. Supermarket and grocery stores

Top scam categories reported to the ACCC

1. Advanced fee/up-front payment

2. Lottery and sweepstakes

3. Phishing and identity theft (incl. banking

& online account)

4. Online auction and shopping

5. Computer hacking (incl. viruses)

6. Unexpected prizes

7. Job/employment

8. Dating/romance

9. False billing

10. Mobile phone (ringtones, competitions)

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