19 October 2017
Significant changes made to Competition and Consumer Act 2010
On 18 October 2017 the Competition and Consumer Amendment (Competition Policy Review) Bill 2017 (Bill) was passed by both houses at Federal level. This follows the enactment of another important piece of legislative amendment relating to Australian competition law on 23 August 2017, the Competition and Consumer Amendment (Misuse of Market Power) Bill 2017 (Cth).
The Bill will implement a number of proposals which were announced in the Australian Government Response to the Competition Policy Review in November 2015 (known as ‘The Harper Review’).
The changes to the Competition and Consumer Act 2010 (Cth) (CCA) which will arise from the Bill will constitute the most significant changes to competition law in the recent years.
Summary of changes
The Bill contains important amendments to the CCA, including in relation to:
These provisions will be simplified, including:
- confining the application of the provisions to cartel conduct affecting competition in Australian markets, and
- changing the scope of the joint venture exceptions to more appropriately exempt legitimate joint ventures.
The price signalling provisions will be repealed and section 45 of the Act extended to prohibit a corporation from engaging in a concerted practice that has the purpose, effect or likely effect of substantially lessening competition. In general terms, a concerted practice is any form of cooperation between two or more companies or conduct that is likely to establish cooperation between companies.
The only exception will be where the Crown and one or more government authorities are engaging in a concerted practice.
The Bill will repeal the definition of ‘exclusionary provision’ and a defence to the prohibition on exclusionary provisions.
A related amendment will be made to the provisions on cartel conduct to ensure there is no gap following the repeal of the prohibition on exclusionary provisions.
Covenants affecting competition
The Bill will simplify certain provisions of the CCA by defining ‘contract’ and ‘party’ to include covenants, and will repeal redundant provisions which separately deal with covenants.
Third line forcing
The prohibition on third line forcing will be amended so that it only prohibits conduct which has the purpose, effect or likely effect of substantially lessening competition (i.e. it is no longer prohibited on a ‘per se’ basis)1.
Resale price maintenance
Schedule 8 will amend the resale price maintenance (RPM) and notification provisions to allow a corporation or person to notify the ACCC of RPM conduct, as an alternative to seeking authorisation from the ACCC for RPM conduct. Schedule 8 also provides an exemption from the RPM prohibition for conduct between related bodies corporate.
Authorisations, notifications and class exemptions
Schedule 9 will make a number of amendments to the law around authorisations, notifications and class exemptions, including granting the ACCC a ‘class exemption’ power.
The Bill will amend the ACCC’s power to obtain information, documents and evidence (Schedule 11) and the National Access Regime (Schedule 12), in addition to various amendments to streamline the administration of the CCA, to reduce compliance burdens for business, individuals and within Government, while preserving the protections available under the CCA (Schedule 14).
Schedule 13 deals with the transitional application of these amendments.
Secondary boycott provisions don’t pass
Schedule 6, which purported to increase the maximum penalty for breach of the secondary boycott prohibition, was not passed and has been omitted from the final Bill.
When do the changes commence?
The Bill has not yet come into effect. Most of the amendments in the Bill, including the important amendments to cartel provisions and third line forcing, will come into effect either on the date of Proclamation or six months after the Bill has received Royal Assent if no Proclamation is made.
It is anticipated that the Bill will come into effect in the coming weeks, although it could be as long as six months until the some of the amendments actually become operative.
Should you have any questions regarding the recent changes to the Competition and Consumer Act, please contact us.
1Competition and Consumer Amendment (Competition Policy Review) Bill 2017 (Cth)
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