'Misuse of corporate power': Price gouging report finds big businesses exploiting Australians
The former chair of the ACCC takes aim at electricity providers, banks, airlines, supermarkets, and other big businesses in his new report on price gouging and unfair pricing practices.
The blistering report also stated that excessive pricing is not unlawful in Australia and called for the government to act, especially as many Australians struggle with cost of living pressures.
"There is currently a gap in government policy," Professor Fels wrote.
"It does not pay sufficient attention to high prices. It needs to.
"It needs to investigate and expose their causes and, as far as possible, remedy the problems, [which are] ineffective competition, vulnerable consumers, and exploitative business pricing practices."
His 80-page report, commissioned by the Australian Council of Trade Unions (ACTU), found that many Australian consumers were being overcharged, and "profit push" pricing had added significantly to inflation in recent times.
The report examined various sectors including electricity, aviation, banks, food and groceries, childcare, medical specialists, electric vehicles, pharmaceuticals, and shipping services in far northern Australia.
The inquiry found that a rise in corporate profitability in the wake of COVID corresponded with the acceleration of inflation.
"The power of corporations to unduly lift prices had been a central factor in the recent cost-of-living crisis affecting so many Australian households," Professor Fels found.
"Companies have been able to leverage the disruptions and uncertainty that followed the COVID pandemic into unprecedented profitability.
"The ability of companies to charge unfair prices, amidst the unprecedented economic and social dislocation ensuing from the COVID pandemic, has significantly undermined the well-being of the Australians we heard from."
Professor Fels also stated in his report: "Adding insult to injury, numerous of the individual allegations of price-gouging received by our inquiry dealt with unfair behaviour by large commercial banks, which have used their market dominance to extract even more profit from customers through higher interest costs and other charges.
"Consumers have been hit twice by the misuse of corporate power. First, they experienced general inflation largely caused by profit-seeking after the pandemic, then were gouged again by financial companies leveraging their market dominance to make extra profits even under higher interest rates."
Professor Fels chaired the ACCC from 1995 until 2003 and his inquiry for the ACTU received hundreds of submissions from members of the public – mostly with concerns about prices in the supermarket, energy and banking sectors.
https://www.abc.net.au/news/2024-02-07/allan-fels-price-gouging-report-cost-of-living-crisis/103431866