Table 18: Regulatory options to implement the MAIF Agreement1
| Form | Characteristics | Advantages | Disadvantages |
|---|---|---|---|
| Voluntary code (e.g. MAIF Agreement) | Voluntary
Low cost Effective in circumstances where there is a high degree of confidence in an industry body and unity in an industry (at least around issue the code is seeking to address) Often used in emerging industries as an initial response No formal role for the ACCC in developing or monitoring the code, although parties can consult the ACCC during code development2 | Low cost, and cost effective method of regulation in some circumstances
Incentive for signatories to encourage competitors to sign up so there is an even playing field Threat of moving to heavier handed regulation can positively influence behaviour | May result in limited coverage – parties are not required to sign up
Inconsistencies in industry practice (between signatories and non-signatories) can lead to confusion Limited ability to enforce compliance or to impose sanction |
| Prescribed voluntary code (Part IVB) | Voluntary
Ministerial involvement to prescribe code – high barriers to prescription (current form of regulation must be inadequate in addressing identified problem) Involves consultation process Regulations must be passed by both houses of Parliament There are currently no prescribed voluntary codes ACCC has enforcement role | Incentive for signatories to encourage competitors to sign up so there is an even playing field
Strong enforceability through the ACCC | Non-signatories may get competitive advantage as they are not constrained by code
May unnecessarily restrict competition or innovation Costs of regulation may outweigh benefits |
| Prescribed mandatory code(Part IVB) | Mandatory
Ministerial involvement to prescribe code – high barriers to prescription (current form of regulation must be inadequate in addressing identified problem) Involves consultation process Regulations must be passed by both houses of Parliament There are currently four prescribed mandatory codes ACCC has enforcement role | Even playing field – all competitors covered by code
Strong enforceability through the ACCC | May unnecessarily restrict competition or innovation
Costs of regulation may outweigh benefits |
| Licencing | Cost in application and administration
Blunt instrument – often limited range of sanctions (i.e. revoke licence) Effective in circumstances where there is significant public interest, or natural monopoly assets | Effective way to regulate market entry | Can be hard to monitor and enforce
Costs of regulation may outweigh benefits |
| Legislation | Involves parliamentary process of enacting legislation | Has parliamentary mandate
Has rule of law and can be enforced | Difficult to amend
Lengthy and costly to implement and enforce Costs of regulation may outweigh benefits |
2 Parties to a voluntary industry code may apply to the ACCC for authorisation as part of a separate process.