Competition laws clear the Senate


New competition laws designed to stop big businesses like Coles and Woolworths from crushing smaller competitors have cleared the Senate.

The so-called "effects test" strengthens rules that prevent companies with substantial market power engaging in conduct that harms competition.

The legislation cleared the Senate despite Labor opposition on Monday night with the support of the Greens and most of the crossbench, including One Nation and the Nick Xenophon Team.

It will need to go back to the lower house for approval after the government agreed to an amendment by the Greens.

Labor frontbencher Katy Gallagher slammed the changes as bad law, insisting 10 reviews since the 1970s had concluded an effects test was a bad idea.

"It will have the effect of chilling competition and reducing innovation, and it will effect the prices that Australians pay for goods in a very bad way," she told parliament.

She said it was a "dangerous leap" to disregard a company's intent when it comes to anti-competitive behaviour, insisting the changes would block companies from innovating or working to increase their competitiveness.

Greens senator Nick McKim accused Labor of being beholden to the unions in opposing the changes.

Labor was under pressure from the Shop, Distributive and Allied Employees Association, which had strong ties with big businesses such as Coles and Woolworths, he said.

"Every time Labor tries to go forward, there are the shoppies holding them back," Senator McKim told parliament.

"We could have had marriage equality five years ago in this country if it weren't for the shoppies."