Overseeing monopoly prices helps to ensure government monopolies and non-government essential infrastructure monopolies do not charge excessive prices for their products or services.
What is monopoly prices oversight?
Overseeing monopoly prices is a two-stage process.
- identification and declaration of a business as monopoly business activity
- referral by the Minister to the QCA for monopoly prices oversight.
Declaration does not automatically mean a business will be referred by the Minister to the QCA for monopoly prices oversight.
If the Minister does refer a monopoly business, it may be to conduct a full investigation into the business’s pricing practices or to simply monitor the prices it charges.
What is a monopoly business activity?
A monopoly business can be either a government business or a non-government business.
For non-government businesses the activity must involve trading in services provided by essential infrastructure (e.g. water, energy, transport).
Government monopoly business activities
All government business activities are potentially subject to being declared a monopoly business activity.
In 1998, the Queensland Government endorsed criteria (developed by us) to help identify which government businesses are monopoly business activities. The term ‘monopoly’ extends to ‘near monopolies’ where a government agency conducting a business activity has substantial market power.
A flow chart shows the decision making process for determining a government monopoly business.
The key question being asked in identifying a government monopoly business is:
Do the activities of the business have the market power to persistently behave in a manner different to that of a competitive market?
Further information on how to identity a government monopoly business activity:
- Criteria for the Identification of Government Monopoly Business Activities
- Criteria for the Identification of Government Monopoly Business Activities – Exec Summary
Non-government monopoly business activities
Only non-government monopoly businesses that involve trading in services provided by an infrastructure facility are potentially subject to declaration. That is only services involving large infrastructure facilities such as rail, port, electricity, water and sewerage are eligible for declaration.
Only businesses where competitive pressures do not effectively constrain its commercial behaviour should be considered for declaration. This may be where these is an absence of vigourous rivalry in the market and there are barriers to enter the market. Or, there may be evidence that the business is exercising substantial market power. A flow chart shows the decision making process for determining a non-government monopoly business.
Further information on how to identity a non-government monopoly business activity:
- Criteria for the identification of Non-Government Monopoly Business Activities
- Criteria for the identification of Non-Government Monopoly Business Activities – Exec Summary
Requesting a referral
Anyone can approach the QCA to check whether it is appropriate for a business to be declared as a government or non-government monopoly business activity.
Assuming the business satisfies the criteria for declaration, you may also request us to ask the Minister to make a referral.