It is not at all a surprise that the substantial lessening of competition test has been deemed not to be breached in regard to the Chinalco deal, said Senator Barnaby Joyce, the Leader of the Nationals in the Senate.
“The substantial lessening of competition test is a test where historically there has almost exclusively been one outcome and that is there is no substantial lessening of competition,” Senator Joyce said. “The reason for this is that the test requires the ACCC to prove that the organisation under investigation, by reason of their arrangement, could increase prices without losing customers.
“It is virtually impossible to prove that someone can raise prices without losing customers and that is why the Birdsville Amendment to predatory pricing in the Trade Practices Act changed the test to the market share test so that one only has to prove that one holds a substantial share of a market as a key to then investigate other issues. Unfortunately, the Birdsville Amendment is only in regards to predatory pricing for which Chinalco is not under investigation.
“The substantial lessening of competition test is so prohibitive that gaining the key to prohibitions of competition lessening actions is virtually impossible.
“The issue with Chinalco is yet another example of why the substantial lessening of competition test should be replaced with the market share test. We now see that the People’s Republic of China, through its investment arms of Chinalco and Minmetals, will be the purchaser of Australian minerals, the seller of those minerals and a sovereign government operating inside our sovereign nation and under the Trade Practices Act this is not a breach of any ACCC test.
“My call is to change the ACCC test from the substantial lessening of competition test to a market share test so that further investigations of the market structure can be allowed with the distinct possibility of prohibition of the corporate structure in its operation in Australia.”