Market Power in Australia: 2026 Trends, Challenges & Opportunities

Market power refers to the ability of a company or group of companies to influence or set prices, control supply, or otherwise shape the competitive landscape of a market. When a business has significant market power, it can act as a price maker rather than a price taker, potentially squeezing out competitors and shaping the options available to consumers.

• Supermarkets: Coles and Woolworths control more than 65% of the grocery market. Their pricing and supplier relationships impact the cost of living for millions.

• Telecommunications: The big three—Telstra, Optus, and TPG—dominate internet and mobile, affecting service quality and innovation.

• Banking: Australia’s ‘Big Four’ banks set lending standards and fees, influencing housing affordability and small business growth.

Market power can drive efficiency and investment, but unchecked, it can stifle competition, raise prices, and limit consumer choice.

In 2026, the Australian Competition and Consumer Commission (ACCC) is sharpening its focus on market power. Following the Competition Review Panel’s recommendations in late 2024, the federal government has committed to:

• Updating the misuse of market power provisions in the Competition and Consumer Act

• Increasing penalties for anti-competitive behaviour

• Expanding merger review powers to scrutinise acquisitions by dominant players

• Launching public inquiries into supermarket pricing and digital platform competition

These moves reflect growing concern about the cost-of-living crisis, the impact of global supply chain shocks, and the need for a level playing field for new entrants. The debate is lively—some industry groups argue that tighter regulation could stifle investment, while consumer advocates say stronger oversight is long overdue.

Market power isn’t just an abstract concept—it has real consequences:

• Consumers: In regions with little competition, residents face higher grocery prices and fewer choices. The 2026 ACCC supermarket inquiry found rural shoppers pay up to 12% more for basics than city dwellers.

• Small Businesses: Suppliers to major chains often have little bargaining power and can be subject to tough contract terms or delisting threats.

• Startups and Innovators: High market concentration in banking and digital platforms can make it harder for new players to break through, slowing innovation.

• Shareholders: Investors in dominant companies may benefit from higher margins, but face regulatory risks as government scrutiny rises.

Some sectors are seeing fresh competition. For example, challenger banks and fintechs are making headway in payments and lending, spurred by open banking reforms. In energy, new retailers are leveraging smart technology to compete with the incumbents, although the big three still hold the lion’s share.

Market power will always be a factor in a modern economy. The challenge is to ensure it’s not abused—and that consumers and small businesses aren’t left behind. In 2026, policymakers are weighing:

• Enhanced merger controls to prevent further concentration

• Support for new market entrants, especially in regional areas

• Transparency rules on pricing and supplier agreements

• Active monitoring of digital platforms and emerging tech monopolies

The conversation isn’t over. As the economic landscape evolves—with AI, green energy, and digital trade—the shape of market power will change, too. Staying informed and engaged is the best way for Australians to ensure a fairer, more dynamic market for everyone.