Rod Sims: the competition and consumer watchdog bringing big business to heel

Competition and consumer watchdog Rod Sims had the public sector world at his feet 30 years ago, but he turned his back on running a department to join the private sector, a move that was pivotal to his current role.

He was 43 when he left the public service after helping the Hawke Government deliver some of the most important economic reforms an Australian government had undertaken, first as an adviser and then as a Deputy Secretary in two departments, including PM&C.

“I could have stayed and become Secretary of a department,” Mr Sims says.

“I just felt that I had been in the public sector for a very long time, and I thought I just did not understand the other half of the world, being the private sector.”

He does now, after joining corporate consultant Port Jackson Partners and chairing successful aid development company InfraCo Asia, among other roles.

What brought Sims back to the public sector was a love of economics and a belief that good policy settings can improve social outcomes. It’s what drove him to advise governments in developing countries such as Papua New Guinea and Guyana and Ghana through the Commonwealth Secretariat in London.

Mr Sims went to Ghana about 20 times to help the Ghanaians negotiate a deal between the Ghana Government-owned hydroelectric plant and Kaiser Aluminium, which brought the government around US$300 million a year in today’s dollars, a significant economic development for Ghana.

“At the time, Jerry Rawlings was the President, having staged a coup. Ghana was so broke I often had to take my own food into Ghana when I went there,” Mr Sims says.

“I quickly realised that economics was a way to both understand the world and how the world works, but also how to improve the world,” Mr Sims says.

That early passion for lifting people out of poverty is still there, and he believes the market, when working properly, remains the best way to do that.

“I’m a committed capitalist,” Mr Sims says. “I think our society works better as a market economy, but I’ve always thought it desperately needed the Australian Competition and Consumer Commission to play its role.

“When you’ve got an economy based on the profit motive, it only works if there are rules in place as set and enforced by the ACCC.”

Mr Sims believes the ACCC’s job is so fundamentally important to Australia that it was too big an opportunity to ignore when he was offered the chair in 2011.

He is now the ACCC’s longest-serving chair and has developed a fearsome reputation as a litigator for and protector of the public interest.

At stake for him are the big picture issues of national productivity and innovation and, for everyday Australians, their standard of living and how much they pay for goods and services.

He believes the concentration and lack of competition in industry is a major challenge for Australia. He does not accept arguments that geography and a relatively small population go against having multiple players in a market.

The ACCC has suffered a few losses in the courts in recent times, mainly in merger cases, but the ledger is still firmly in the ACCC’s favour.

Mr Sims brought a willingness to take the fight to business when he took over, arguing that a 100 per cent win result was too high.

“I said at the time, you can’t win all your cases or you’re not doing your job,” he says.

“We can’t only take cases that we’re completely confident of winning. So I said if I find behaviour that I think is damaging to the economy, is against the law or the spirit of the law, we’ll take companies to court.

“The win ratio has gone from 100 per cent to 80 per cent, but I’m very happy with that.”

Those wins include a $125 million penalty against Volkswagen, a $50 million penalty against Telstra for selling mobile phones in Indigenous communities, and criminal cartel cases.

Other successes include new legislation such as Section 46 of the Competition and Consumer Act, much higher penalties for breaching consumer laws and work on digital platforms and water markets.

Mr Sims believes that the ACCC can’t be a friend to business, but it should be feared and respected.

But one could forgive the ACCC for being daunted by taking on digital giants Google and Facebook in its digital platform inquiry that, among other things, paved the way for payments to media companies for access to their news.

Mr Sims is matter of fact about it, saying that although it was really complex, once the ACCC worked out how it all operated, it was able to proceed with confidence, and the outcome has been extremely successful.

“Once you have confidence in your position, then you can make confident decisions,” he says.

Digital platforms will continue to be a priority in the ACCC’s work program, much of which has been on hold due to the pandemic.

The ACCC’s global leadership in this area was recognised on 17 September when Mr Sims was confirmed by the steering group of the International Competition Network as the new Vice Chair Digital Co-ordination and Asia-Pacific Liaison.

He will focus on co-ordinating ICN projects and discussions about competition in the digital economy and will also act as a liaison between the ICN Steering Group and ICN members in the Asia-Pacific region.

In 2022, the ACCC will be looking at whether existing consumer laws are sufficient to deal with the search and app markets dominated by Google and, to a lesser extent Apple, not to mention Facebook’s media dominance.

The NBN and how it prices its services is also on the to-do list because the current regulatory model doesn’t work.

Telecommunications, infrastructure monopolies such as airports and ports are also on the agenda.

Mr Sims will also be seeking an even bigger stick to wave through increased penalties.

“I’m hoping that when you’re dealing with significant breaches by large companies, you may find more $100 million-plus penalties and also for breaches of competition law. I think that would be a good way to get more respect for and compliance with the law,” he says.

Mr Sims has also been a harsh critic of Australia’s merger laws, which make it very difficult for the ACCC to prove there will be a lessening of competition.

But while he will be encouraging an ongoing debate about it, Mr Sims says it’s an issue that will have to wait until after the election and, hopefully, the pandemic subsides.

He firmly believes that the government needs to focus on the crisis at hand and not get distracted.

“There were a number of people who said don’t waste a crisis, let’s deal with this, this, and this, and my reaction was no, no, no. Fix the crisis first,” Mr Sims said.

He said the pandemic response had highlighted the importance of a strong public sector in a crisis and what can be achieved when government and the public service align.

Although loathe to compare eras, his time with the reformist Hawke Government was a period when very knowledgeable ministers sought change and senior public servants recognised what the country needed.

“There was a whole lot that came together there that was really powerful in terms of driving change,” Mr Sims says.

People always work best when there is a galvanising common purpose. He can now see an awful lot of cooperation between the government and public service on COVID, particularly Health and Treasury.

Mr Sims doesn’t look back at the Hawke period as a golden era for the public service.

“Sometimes you get long-retired public servants who look back and say it’s not as good as in our day, but I don’t think that’s right,” he says.

“When I joined the public service in the mid-80s, there was a lot of squabbling between department heads. Now it’s a lot more collegiate.”

Mr Sims praised the commitment and skills of public servants he works with, particularly in Treasury.

“It ranks right up there with all the Treasury departments I’ve known over the years. They may well be even better,” he says.

His advice to today’s public servants is always to have a view about what the government should be doing and be willing to prosecute that view with a well-constructed argument, several times if needed.

“Ultimately, if the government doesn’t want to go your way, that’s fine; you’re there to put in place what the government directs, but the key ingredient is you’ve got to have input into that process,” Mr Sims says.

“You’re not there to be an empty vessel to have government instructions poured into you. You’re there to be an adviser to governments and have your own view.

“But don’t give up after one go at giving advice. The cleverness of good advice is firstly having the view in the first place and secondly working out clever ways to convince people that it’s the right way forward.”

Original Article published by Ian Bushnell on The RiotACT.