This year, the monopolies and duopolies existing within our business ecosystem have come under the microscope. The Woolies and Coles debacle had many of us glued to the news following allegations of price gouging.
However, market concentration doesn’t just exist in the supermarket industry. If you take a step back, it’s not hard to see most of the businesses operating in the essential industries we rely on have a strong grip on the market – look at airlines, the Big Four banks, or the telco and logistics industries. Not only does a lack of competition have a worrying impact on the broader business landscape, but consumers end up with the short end of the stick when they’re served higher prices.
We shouldn’t overlook the opportunity to foster a more open, fair and equitable economic environment – or pass up the chance to nurture more innovation. Here’s why.
Big business compliance
Let’s take a step back and examine how monopolies occur. Monopolies thrive in environments where big businesses face low regulation and minimal compliance requirements. And, the impact of monopolies on the marketplace is significant.
When bigger businesses gatekeep their networks, they directly create unfair landscape conditions for smaller players. This situation particularly applies to regional and remote businesses that have reduced access to resources. Take Australia Post as an example, after it announced it was shrinking its “outsized retail network”. One of the first businesses on the chopping block was the Lambton Post Office in the Newcastle region, which has recently been forced to shut despite petitions to Australia Post from its community.
To avoid situations like this from being allowed to happen in the first place, we need stricter rules for big businesses and monopoly industries. Opening up existing infrastructure to private enterprises through new partnerships and business models will create new possibilities by creating an entirely new business ecosystem – one that leads to more choices and better services for Australians, especially SMEs.
Greater innovation = greater competition
Innovation has always been associated with greater competition, including stronger consumer welfare and growth, as well as more flexible, resilient and advanced market conditions.
The idea behind the National Broadband Network (NBN) is one example of the government opening infrastructure to private enterprise to encourage innovation and growth. Rather than one monopoly provider, the Government decided to see the NBN as a platform, proposing to bring better service for customers and a more competitive and innovative market for broadband services regardless of location.
Similarly, Australia Post is a government-owned asset. Yet, it doesn’t currently allow smaller couriers to use their network, which would create a more open landscape. This mindset has put our nation behind markets like the US and the UK, where public carriers work together with shipping companies. The network-sharing scenario is a win-win situation for all by giving small couriers access to the vast networks of the USPS or Royal Mail, while legacy suppliers benefit from advanced technology and innovation offered by those using the network.
Just as the NBN aimed to bridge the digital divide by providing high-speed internet to both metro and remote areas, opening up Australia Post as a utility to private companies can improve access to delivery services in these underserviced areas. By doing so, both infrastructure assets have the potential to benefit consumers and businesses while simultaneously driving economic growth and development.
It should be a no-brainer that ending functional monopolies will lead to improved access, fairer competition and encourage innovation. In turn, this leads to greater choice, improved services and experiences for all Australians – SMEs and consumers alike. It’ll ultimately foster a more efficient and financially stable market that is fit to meet the needs of the community, both now and in the future.
