In his speech, Sims agreed with his predecessor, Graeme Samuel, on the stupidity of restricting price-signalling rules to banking, but didn’t go so far as to say they were drafted so badly as to be useless.
The key point missed by John is that there are two parts to the price signalling laws – a really good bit and a useless bit.
The laws against private price disclosures are sensible and strong. As I have argued before, it is difficult to think of why competitors should be privately disclosing prices to each other except for anti-competitive purposes. And if there is a legitimate reason, the behaviour can be cleared in advance by the ACCC. These laws should be extended to all business.
The public price disclosure rules are poorly designed and unlikely to ever be used unless a banker has some sort of brain explosion. The recent RBA interest rate change led to lots of public discussion by banks about interest rate changes and strategy – but it is hard to imagine that any broke the law. This part of the law should be revoked.
John mentions that support is growing to broaden the price signalling laws. Good! This should be supported – because broadening the private price signalling laws will help competition and undermine collusion. If the cost of broadening the ‘good’ bit is also broadening the ‘bad’ bit, so be it.