Competition regulators from Five Eye countries – Australia, Canada, New Zealand, UK and US – have come together to create a new task force focused on stopping the collusion that has arisen in chains global supply chains following pandemic-induced disruptions.
Six competition monitors from Five Eyes countries will form the working group, including two from the United States. These are the Australian Competition and Consumer Commission (ACCC), the Canadian Competition Bureau, the New Zealand Commerce Commission, the UK Competition and Markets Authority (CMA), the US Department of Justice and the Federal Bureau of Investigation.
The intelligence-sharing initiative comes in response to the fact that freight rates on major global trade routes are about seven times higher than before the pandemic, the ACCC said. Beyond the task force’s concerns, industry analysts also said semiconductor prices are expected to continue high for 2022 as chip shortages and the pandemic are still ongoing.
Members of the task force will share intelligence as part of efforts to detect behavior that restricts or distorts competition, such as exclusionary agreements by firms with significant market power.
“The global freight supply chain is a complex web involving many jurisdictions, so the natural detection of anti-competitive behavior requires strong international partnerships,” said ACCC President Rod Sims.
“COVID-19 has caused the supply chain disruptions the world is currently experiencing, but the purpose of this task force is to detect any attempt by companies to use these conditions as a cover to work together and fix prices. ”
In the UK, illegal supply chain conduct uncovered by the task force could result in fines of up to 10% of global turnover, disqualification of directors and, in some cases, criminal prosecution, a said the CMA.
The announcement of the initiative follows Sims who told Australian senators yesterday that the scope of his agency’s powers, at the national level, is quite limited, at least when it comes to stopping the rises in product prices.
“Our role is pretty much exclusively ‘Are companies explaining price increases based on misleading information?’ So the essence of [Australian] consumer law is not to mislead. We have no sweeping power if people are pricing excessively,” Sims told the Senate estimates.
He explained that the ACCC can only intervene when an entity provides a misleading explanation of why certain products have price increases.
Sims added that as long as he remains head of the ACCC, the agency would be reluctant to push for divestment laws and excess profit taxes to address competition and consumer issues.
“Once you have [divestment] law, people are going to ask you to use it all the time, in many industries, and it’s such a big stick. I just have a general philosophical concern about very, very big sticks and what that opens up,” the ACCC chairman said, answering questions from senators about the high concentration of power wielded by a small handful. tech giants.
“[For] tax systems that to some extent would target excess profits — it’s much easier in the resource industry because you have a different philosophical approach to the finite resources in the ground. Once you do it for companies that have just been successful, it’s a pretty big stick again,” added Sim.
While Sims has been reluctant to ask companies like Meta, formerly Facebook, to divest subsidiaries, US regulators have taken a different view. Last year, the U.S. Federal Trade Commission (FTC) attempted to impose antitrust sanctions on Meta, including forcing the social media giant to divest Instagram and WhatsApp, though that effort was ultimately unsuccessful. overturned by federal courts.
Instead of calling for divestiture or more taxes, Sims said the ACCC wants more “upfront rules” dealing with the extreme concentration of power in the digital platform industry, as current laws are not not sufficient.
“We probably need upfront rules to deal with some of that, just like we have upfront rules in telecom. We have it in energy, and as I understand it, although that’s not my industry, we have a bit in the financial markets,” Sims mentioned.
“I think the concentration level there is so strong that you won’t be able to deal with it via existing laws, you’ll be chasing your tail forever.”
Sims, who served as ACCC president for more than a decade, is expected to step down next month. He will be replaced by Gina Cass-Gottlieb, an attorney who currently leads Gilbert + Tobin’s competition and regulatory practice.