There has never been a more important time to expedite digital innovation across the economy according to competition tsar chief Rod Sims, who says the ACCC will keep its July 1 deadline for the launch of Consumer Data Right reforms in the banking sector.
After extensive talks with the banks and other stakeholders about the impact of the extraordinary COVID-19 health and economic crisis, Mr Sims said the “vast majority wanted to press ahead” and build on the work that had already been completed.
While the timetable would need to be flexible, with the ACCC expected to provide more specific details in the coming weeks, Mr Sims said the commission continued to work toward a July 1 2020 launch for sharing consumer transaction data.
Speaking at an AFR banking and wealth virtual conference on Monday, Mr Sims said the response to the unprecedented economic challenges may in the short prompt unusually cooperative behaviours by competitors across different sections of the economy.
Sensible and temporary immediate measures to support the economy would be needed, and the ACCC had a role to play in that process.
But “the key words are immediate, sensible and most importantly, temporary” and that anti-competitive market behaviours would not be allowed to become entrenched in the economy post-COVID.
Mr Sims said the ACCC’s digital platform inquiry work on the anti-competitive behaviours of the tech giants would continue, albeit through a more flexible approach given that the crisis would affect the ability of the industry to respond and contribute.
Looking at the structure of the economy post-crisis, Mr Sims said the introduction of the Consumer Data Right was a fundamentally important reform as important as any achieved during the Hawke-Keating era.
“A key driver of reform, and greatly improved competition in financial services, will be the Government’s Consumer Data Right initiative that the ACCC is leading,” Mr Sim said.
“We may not know when the gains from CDR will kick in, but we can be certain they will be profound. Competition, consumers, and the economy will be benefit considerably,” he said.
“In the immediate term it will benefit banking, in many ways, but it will be extended right across the economy. Have no doubt, this is as important a reform as achieved in that wonderful reform decade of the 1980s.
“And it is a reform for this moment. If ever there was a time to expedite digital innovation, this is it. But first understand the essence of CDR reform in banking.”
Mr Sims said the ACCC was playing a role in authorising some market behaviours during the crisis that would otherwise be anti-competitive and illegal.
The ACCC currently has numerous applications from all sectors of the economy to enable competitors to cooperate and coordinate their response to the COVID-19 crisis, and that approvals are being made in one to two days.
“We are authorising, or making legal, what would otherwise be anti-competitive activity. This involves competitors getting together to co-ordinate their response and share resources and information,” Mr Sims said.
“At a time of crisis such as in war or with a pandemic, where there is a common enemy to fight for the nation’s survival, and so a sense of national purpose, co-ordination is both efficient and carries little or no downside,” he said.
Equally, he said the ACCC had already turned its attention to the post-crisis economy, to ensure that the usual market behaviours did not become entrenched and that competition remained as a bed-rock setting for the economy.
“Competition has a critical role to play in getting the economy running again post the COVID-19 crisis.
“It is important that the necessary short-term measures do not give rise to long term structural damage to competition or market concentration, and that we continue to make progress with important reforms such as the Consumer Data Right.”