Bills Digest No. 28, 2017-18
PDF version [975KB]
Paul Davidson
Economics Section
6 September 2017
Contents
Purpose of the Bill
Structure of the Bill
Background
Hilmer Review
Resulting reforms
Dawson Review
Election commitment
Harper Review
Government response
Key changes to recommendations
between the draft report and the final report
Recommendations first introduced in
the final report
Key changes between the Exposure
Draft and the Bill
Committee consideration
Selection of Bills Committee
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Schedule 1—Definition of competition
Commencement
Harper Review consideration
Key provision and issues
Schedule 2—Cartels
About cartels
Reducing the complexity of the cartel
provisions
Key provisions
Reducing the scope of the cartel
provisions
The relevant market
Likelihood of competition
Joint ventures
Renumbering the cartel conduct
provisions
Schedule 3—Price signalling and
concerted practices
Commencement
Division 1A of Part IV of the CCA
Key provision
Introduction of concerted practices
Key Provisions
Schedule 4—Exclusionary provisions
Commencement
About exclusionary provisions
Schedule 5—Covenants affecting
competition
Commencement
About covenants
Schedule 6—Secondary boycotts
Commencement
Background
How the secondary boycott provisions
operate
Key provisions
Right to freedom of association
Right to freedom of assembly and
expression
Schedule 7—Third line forcing
Commencement
About third line forcing
Harper Review consideration
Key provisions
Schedule 8—Resale price maintenance
Commencement
About resale price maintenance
Harper Review consideration
Key provisions
About notifications
Key provisions
Schedule 9—Authorisations,
notifications and class exemptions
Commencement
About authorisation
Harper Review consideration
Summary of the changes
Key provisions
About collective bargaining
Harper review consideration
Key provisions
About class exemptions
Harper Review consideration
Key provisions
Schedule 10—Admissions of fact
Commencement
About evidence
Harper Review consideration
Key provisions
Schedule 11—Power to obtain
information, documents and evidence
Commencement
Harper Review consideration
Legal burden of proof
Significant penalties
Right to privacy
Key provisions
Schedule 12—Access to services
Commencement
About the national access regime
The Productivity Commission
recommended approach
Harper Review consideration
Government response
Retrospective commencement
Key provisions
Schedule 13—Application and
transitional provisions
Commencement
Key provisions
Schedule 14—Other amendments
Commencement
Harper Review considerations
Date introduced: 30
March 2017
House: House of
Representatives
Portfolio: Treasury
Commencement: Various
dates as set out in the body of this Bills Digest
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at September 2017.
Purpose of
the Bill
The purpose of the Competition
and Consumer Amendment (Competition Policy Review) Bill 2017 (the Bill) is
to introduce legislative changes to the Competition and
Consumer Act 2010 (CCA) arising from the Government’s acceptance
of a series of recommendations emanating from the Competition Policy Review (the
Harper Review).[1]
Structure
of the Bill
The Bill comprises 14 schedules all of which amend the CCA:
- Schedule
1 amends the definition of competition in the CCA
- Schedule
2 relates to cartels
- Schedule
3 relates to price signalling and concerted practices
- Schedule
4 relates to exclusionary provisions
- Schedule
5 relates to covenants affecting competition
- Schedule
6 relates to secondary boycotts
- Schedule
7 relates to third line forcing
- Schedule
8 relates to resale price maintenance
- Schedule
9 relates to authorisations, notifications and class exemptions
- Schedule
10 relates to admissions of fact
- Schedule 11 relates to the Australian Competition and
Consumer Commission’s (ACCC’s) ability to obtain information, documents, and
evidence
- Schedule
12 relates to access to services
- Schedule
13 provides for application and transitional provisions
- Schedule
14 provides for other amendments.
Background
Hilmer
Review
In 1993, the Independent Committee of Inquiry into
National Competition Policy (the Hilmer Review) prepared a comprehensive review
of Australian competition policy, under the Keating Government.[2]
The Hilmer Review took a broad view of competition policy,
arguing it encompasses all policy dealing with the extent and nature of
competition in the economy. Specifically, the Review considered competition
policy in terms of six specific elements, each of which it argued was supported
by laws, policy and/or government action:
-
limiting anti-competitive conduct of firms
-
reforming regulation which unjustifiably restricts competition
-
reforming the structure of public monopolies to facilitate
competition
- providing third party access to certain facilities that are
essential to competition
-
restraining monopoly pricing behaviour and
- fostering ‘competitive neutrality’ between government and private
businesses when they compete.[3]
The Review saw the goal of competition policy as
facilitating effective competition in order to promote efficiency and economic
growth, while accommodating situations where competition does not achieve
efficiency or conflicts with other social objectives.
Resulting
reforms
The Hilmer Review led to a range of legislative reforms
and policy development, including:
-
extension of the anti-competitive conduct provisions in the
(then) Trade Practices Act (TPA) to unincorporated enterprises
and government businesses
- reforms to public monopolies and other government businesses:
- structural
reforms—including separating regulatory from commercial functions; and
reviewing the merits of separating natural monopoly from potentially
contestable service elements; and/or separating contestable elements into
smaller independent businesses and
- competitive
neutrality requirements involving the adoption of corporatised governance
structures for significant government enterprises; the imposition of similar
commercial and regulatory obligations to those faced by competing private
businesses; and the establishment of independent mechanisms for handling
complaints when these requirements were breached
-
the creation of independent authorities to set, administer or
oversee prices for monopoly service providers
-
the introduction of a national regime to provide third-party
access on reasonable terms and conditions to essential infrastructure services
with natural monopoly characteristics
-
the introduction of a Legislation Review Program to assess
whether regulatory restrictions on competition are in the public interest and,
if not, what changes were required. The legislation covered by the program spanned
a wide range of areas, including: the professions and occupations; statutory
marketing of agricultural products; fishing and forestry; retail trading;
transport; communications; insurance and superannuation; child care; gambling;
and planning and development services.[4]
Dawson
Review
Over subsequent years other reviews were undertaken,
including the Review of the Competition Provisions of the Trade Practices
Act (known as the Dawson Review).[5]
The competition rules in Part IV of the CCA seek to restrain
conduct that tends to lessen competition. According to the Dawson Review:
Competition is an important mechanism for achieving the
advances in efficiency and productivity that are essential to enhance welfare.
Competition creates an environment that provides incentives and disciplines for
continuing improvement. In a competitive market, each participant seeks to
constrain costs to maintain its position in the market and achieve some
advantage over its competitors. Business decisions made in response to
competitively determined prices direct resources within the economy to where
the best opportunities lie. Ultimately, consumers benefit as increases in
productivity are reflected in lower prices in the short term or through greater
choice in the longer term. Their welfare is enhanced.[6]
It is therefore important for governments to ensure that
the competition provisions are operating effectively.
Election
commitment
Prior to the 2013 election, the Abbott Government
committed to undertaking ‘a root and branch review of competition laws’.[7]
That review was announced in December 2013:
The ‘root and branch’ review delivers on a key election
commitment and will help identify ways to build the economy and promote
investment, growth and job creation. The competition review will examine not
only the current laws but the broader competition framework, to increase
productivity and efficiency in markets, drive benefits to ease cost of living
pressures and raise living standards for all Australians.[8]
Harper
Review
Draft terms of reference of
the Harper Review were released on 11 December 2013,[9]
and final terms of reference and the composition of the Review Panel were
announced on 27 March 2014.[10]
The key areas of focus for the review were to:
-
identify regulations and other
impediments across the economy that restrict competition and reduce
productivity, which are not in the broader public interest;
-
examine the competition provisions
of the Competition and Consumer Act 2010 (CCA) to ensure that they are
driving efficient, competitive and durable outcomes, particularly in light of
changes to the Australian economy in recent decades and its increased
integration into global markets;
- examine the competition provisions
and the special protections for small business in the CCA to ensure that
efficient businesses, both big and small, can compete effectively and have
incentives to invest and innovate for the future;
-
consider whether the structure and
powers of the competition institutions remain appropriate, in light of ongoing
changes in the economy and the desire to reduce the regulatory impost on
business; and
- review government involvement in
markets through government business enterprises, direct ownership of assets and
the competitive neutrality policy, with a view to reducing government
involvement where there is no longer a clear public interest need.[11]
An Issues Paper was released for public comment on 14
April 2014,[12]
and the Draft Report was released on 22 September 2014.[13]
The Final Report was released on 31 March 2015.[14]
The Harper Review’s Final Report notes:
The CCA (and competition policy more generally) is not
designed to support a particular number of participants in a market or to
protect individual competitors; instead, it is designed to prevent competitors’
behaviour from damaging the competitive process to the detriment of consumers.
The robust competitive process supported by Part IV of the CCA
may inevitably lead to some market participants being damaged or leaving the
market completely. Those adversely affected by competition may feel aggrieved
by this damage, but the CCA is neither intended nor designed to protect
individual competitors or classes of competitors from such outcomes.[15]
And further:
... the law must balance two principles:
- that its scope not over-reach (by
prohibiting pro-competitive conduct) or under-reach (by failing to prohibit
anti‑competitive conduct); and
-
that the language of the law be
clear to market participants and enforceable by regulators and the courts.[16]
The Harper Review’s Final Report made 56 recommendations
to Government.
Government
response
The Turnbull Government’s response was released in
November 2015, including the response to the National Access Regime.[17]
On 16 March 2016 the Government announced its support for changes to the misuse
of market power provisions.[18]
The Government supported 39 of the recommendations in full or in principle, with
partial support for another five.[19]
On 5 September 2016, the Turnbull Government released an Exposure Draft for
amendments to the CCA.[20]
Key changes
to recommendations between the draft report and the final report
Key changes to recommendations between the Draft Report
and the Final Report were:
- recommendation 18 of the Draft Report was that sections 46A and
46B (which relate to the misuse of market power in a Trans-Tasman market) be
repealed.[21]
The companion recommendation in the Final Report (recommendation 23), removed
the recommendation to repeal the sections[22]
- recommendation 22 of the Draft Report specified that the cartel
conduct provisions should be limited to conduct involving firms that are actual
competitors and not to firms for whom competition is a mere possibility.[23]
In the Final Report it was recommended that cartel conduct should apply to
‘conduct involving firms that are actual or likely competitors, where ‘likely’
means on the balance of probabilities’[24]
- recommendation 28 of the Draft Report provided that the scope of
exclusive dealing (covered in section 47 of the CCA) should be amended
to cover all forms of vertical conduct, rather than specific types.[25]
In the Final Report, as a result of recommended changes to sections 45 and 46
(which deal with contracts, arrangements, and understandings that affect
competition; and the misuse of market power, respectively), it was recommended
that section 47 be repealed.[26]
Recommendations
first introduced in the final report
There was no formal Draft Report recommendation on
procurement and other commercial arrangements. In the Final Report it was
recommended:
All Australian governments should review their policies
governing commercial arrangements with the private sector and non-government
organisations, including procurement policies, commissioning, public-private
partnerships and privatisation guidelines and processes.
Procurement and privatisation policies and practices should
not restrict competition unless:
-
the benefits of the restrictions to
the community as a whole outweigh the costs; and
- the objectives of the policy can
only be achieved by restricting competition.
An independent body, such as the Australian Council for
Competition Policy (see Recommendation 43), should be tasked with reporting on
progress in reviewing government commercial policies and ensuring privatisation
and other commercial processes incorporate competition principles.[27]
There was no formal Draft Report
recommendation on informed choice. In the Final Report it was recommended:
Governments should work with industry, consumer groups and
privacy experts to allow consumers to access information in an efficient format
to improve informed consumer choice.
The proposed Australian Council for Competition Policy (see
Recommendation 43) should establish a working group to develop a partnership
agreement that both allows people to access and use their own data for their
own purposes and enables new markets for personal information services. This
partnership should draw on the lessons learned from similar initiatives in the
US and UK.
Further, governments, both in their own dealings with
consumers and in any regulation of the information that businesses must provide
to consumers, should draw on lessons from behavioural economics to present
information and choices in ways that allow consumers to access, assess and act
on them.[28]
In the Final Report, there was a recommendation concerning
the implementation of the Harper Review, as well as a recommendation for the
Productivity Commission (PC) to be tasked with undertaking economic modelling
of the recommendations as a package.[29]
Key changes
between the Exposure Draft and the Bill
The key changes between the Exposure Draft and the Bill were:
- changes to proposed amendments to cartel provisions
- changes to the proposed application of concerted practices
- the removal of amendments relating to the misuse of market power (which
were separately introduced into Parliament on 1 December 2016)[30]
- the introduction of contingent amendments to access to services
amendments
-
changes to amendments associated with authorisations,
notifications, and class exemptions and
- changes to application and transitional provisions, and other
amendments.
The relevant changes are covered in the relevant Schedule
heading below.
Committee
consideration
Selection
of Bills Committee
The Selection of Bills Committee recommended that the Bill
not be referred to Committee for inquiry and report.[31]
Senate
Standing Committee for the Scrutiny of Bills
The Scrutiny of Bills Committee raised concerns with three
aspects of the Bill: the legal burden of proof; significant penalties; and
retrospective commencement.[32]
The comments are canvassed under the relevant Schedule heading below.
Policy
position of non-government parties/independents
There have been no public comments made in relation to the
Bill.
Position of
major interest groups
Professor Fred Hilmer noted that injecting greater
competition into the health and education sectors was a ‘new frontier’, but
noted that there were ‘still huge gains to be made in infrastructure and
utilities reform’. Professor Hilmer considered that the economic gains from the
Harper Review could potentially be as large as the 2.5 per cent
increase to GDP which occurred as a result of the implementation of the Hilmer
Review.[33]
The Victorian Chamber of Commerce and Industry said the
reforms under the Competition Policy Review would lift long-term productivity
and growth, and:
The Victorian Chamber looks forward to working with the
Federal Government to progress the implementation of this new competition
reform agenda, as well as with all governments to drive a new wave of
state-based competition and regulation reforms.[34]
Business Council of Australia CEO Jennifer Westacott
stated:
We have to redesign ... markets knowing that the power of
today’s consumer is profoundly different to the consumer at the time of the
Hilmer competition review ...
Increased competition will give public sector service
delivery organisations an incentive to do better. The strengthened competitive
neutrality framework recommended by Harper will level the playing field between
public and private providers.[35]
Financial
implications
The Government considers that the Bill has no financial
impact on the federal budget and will result in an overall decrease in
compliance costs.[36]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed
the Bill’s compatibility with the human rights and freedoms recognised or
declared in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[37]
Parliamentary
Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights Scrutiny
Report raised concerns with four aspects of the Bill: the right against
self-incrimination; the right to privacy; the right to freedom of association;
and the right to freedom of assembly and expression.[38]
The comments are canvassed under the relevant Schedule heading below.
Schedule 1—Definition
of competition
Commencement
The provisions in Schedule 1 to the Bill are contingent on
the Competition
and Consumer Amendment (Misuse of Market Power) Act 2017 receiving the
Royal Assent. That Act received Royal Assent on 23 August 2017. As a result,
the provisions of Schedule 1 commence on the earlier of a single day to be
fixed by Proclamation and six months after the day this Act receives Royal
Assent.
Harper
Review consideration
The current definition of competition in
subsection 4(1) of the CCA provides that it includes competition from imported
goods or from services rendered by persons not resident, or not carrying on
business, in Australia. The Harper Review considered:
... given the importance of ensuring that global sources of
competition are considered where relevant, the [review] recommends strengthening
the current definition of ‘competition’ in the CCA so there can be no doubt
that it includes competition from potential imports of goods and
services and not just actual imports.[39]
[original emphasis]
Key
provision and issues
Item 1 of Schedule 1 of the Bill repeals and
substitutes the definition of competition in the CCA.[40]
The amendment, which adopts the recommendation in the Harper Review, clarifies
that the scope of the term competition includes a ‘credible
threat’ of import competition.[41]
The Harper Review discussed the concept of competition
in relation to merger decisions, and noted that the Australian Competition and
Consumer Commission (ACCC) already takes ‘the potential for competitive
constraint’ into account.[42]
However, competition is particularly applicable to Part IV of the
CCA which relates to restrictive trade practices. For example, many of
the provisions of that Part prohibit specific conduct that has the effect of
substantially lessening competition.[43]
In its submission to the Harper Review, the ACCC opposed
the change to the definition of competition on the ground that the current
definition of competition is sufficiently clear to ensure that
competition in Australian markets includes competition from actual and potential
imports into Australia. In addition, the
ACCC expressed concern that the change has the potential to make enforcement
action more difficult.[44]
By including a ‘credible threat’ of import competition in the definition, there
is a potential that more competition may be identified by the courts and that
may make it more difficult to prove that that the particular conduct complained
of substantially lessens that (now larger) level of competition.
Schedule 2—Cartels
Commencement
Items 1–37 of Schedule 2 to the Bill are contingent
on the Competition and Consumer Amendment (Misuse of Market Power) Act 2017
receiving the Royal Assent. That Act received Royal Assent on 23 August 2017.
As a result, the provisions commence on the earlier of a single day to be fixed
by Proclamation and six months after the day this Act receives Royal Assent.
Item 38 of Schedule 2 to the Bill which relates to
simplification of the existing cartel provisions commences immediately after
the commencement of items 1–37.
About
cartels
Schedule 2 proposes to make amendments to Part IV
of the CCA[45]
in respect of cartels (box 1).
Box 1: information about cartels
A cartel can generally be thought of as a horizontal
agreement between a number of firms to restrict competition. The agreement is
classified as ‘horizontal’ as it involves firms which are in competition with
each other at the same level in the supply chain, for example, manufacturing,
retailing etc. The restrictions on competition can take a number of forms:
- price-fixing—an
arrangement where firms agree to all set a particular price at which to sell
goods or services
- restricting
supply—an arrangement where firms agree to withhold production in the
supply chain
- geographical
restrictions—an arrangement where firms are allocated customers,
suppliers or territories, usually on an exclusive basis
- bid-rigging—an
arrangement where firms agree beforehand to restrict particular tenders such
that one firm will receive the contract tendered for, usually at an inflated
price.
The effect of a successful cartel is to restrict
competition in the market. The object of the CCA is to enhance the
welfare of Australians, with competition a means to that end. Where
competition is restricted, welfare is generally reduced. The purpose of
Division 1 of Part IV of the CCA is to prohibit cartel conduct and to
set both civil and criminal penalties for contraventions.
|
Sources: RV Miller, Miller’s Australian competition and
consumer law annotated, 38th edn, Thomson Reuters, Sydney, 2016, pp.
463–464, 474–478; Organisation for Economic Co-operation and Development
(OECD), Recommendation
of the Council concerning effective action against hard core cartels, C(98)35/FINAL,
OECD, Paris, 25 March 1998.
The Harper Review noted that submitters expressed broad
support for serious cartel conduct to be per se prohibited and for
imposing criminal sanctions for that conduct.[46]
The two principal concerns raised in submissions to the Harper Review were:
- The provisions are unnecessarily
complex, making the law difficult to understand and comply with.
- The provisions have been framed too
broadly and criminalise commercial conduct that ought not be characterised as
cartel conduct, including joint venture activity and vertical arrangements
between suppliers and their customers.[47]
Reducing the
complexity of the cartel provisions
The Harper Review recommended reformulating the cartel
provisions from the current purpose/effect condition, purpose condition, and
competition condition to one based on the OECD cartel forms identified in box 1
above.[48]
Despite the Government’s support for the recommendation,[49]
the Exposure Draft did not incorporate the changes to the cartel provisions as
proposed in the Harper Review’s model legislative provisions.[50]
Indeed, it is possible that the changes to the CCA in Schedule 2
may do little to change the complexity of the current provisions.[51]
Currently, subsection 44ZZRD(1) provides the definition of a cartel provision:
For the purposes of this Act, a provision of a contract,
arrangement or understanding is a cartel provision if:
(a) either of the following
conditions is satisfied in relation to the provision:
(i) the purpose/effect condition
set out in subsection (2);
(ii) the purpose condition set out
in subsection (3); and
(b) the competition condition set
out in subsection (4) is satisfied in relation to the provision.[52]
Key
provisions
Currently, the purpose condition is
satisfied where the provision of the contract, arrangement or understanding
relates to preventing, restricting, or limiting the production, capacity to
supply, or supply of goods or services, as the case may be.
Item 2 of Part 1 of Schedule 2 to the Bill amends
the purpose condition in section 44ZZRD by inserting proposed subparagraph
44ZZRD(3)(a)(iv) into the CCA.[53]
It operates to include a provision of a contract, arrangement or understanding which
has the purpose of directly or indirectly preventing, restricting, or limiting
the acquisition (or likely acquisition) of goods or services from persons or
classes of persons by parties to the contract, arrangement or understanding to
which the cartel conduct relates. Item 2 effectively recognises that
cartel conduct can exist in relation to the buying of goods or services,
and not merely various types of actual or potential selling
arrangements.
Item 2 ensures that the purpose
condition can be satisfied in similar circumstances to the purpose/effect
condition in paragraph 44ZZRD(2)(d) which is directed towards a provision of a
contract, arrangement or understanding that has the purpose, or has or is
likely to have the effect, of directly or indirectly fixing, controlling, or
maintaining the price for, or a discount, allowance, rebate, or credit in
relation to goods or services acquired (or likely to be acquired) by parties to
the contract, arrangement, or understanding.
Item 6 of Part 1 proposes to make analogous
changes to the competition condition in section 44ZZRD by
inserting proposed paragraph 44ZZRD(4)(ha) relating to actual or likely
acquisitions of goods or services in trade or commerce.
These amendments clarify the operation of the cartel
provisions to include acquisitions, but they do not appear to reduce the level
of complexity of the current provisions.
Reducing
the scope of the cartel provisions
The Harper Review identified three specific problems with
the current cartel provisions, other than complexity:
- The cartel law is not limited to
conduct that harms competition in markets in Australia.
- The ‘competition condition’ for the
application of the cartel law is set at a very low threshold.
-
The exceptions for joint ventures
and for vertical supply arrangements are each too narrow.[54]
The
relevant market
The Harper Review observed
that generally Australia’s competition laws are directed at conduct which harms
competition in markets in Australia.[55]
However, the current cartel provisions are not so constrained. As noted in the
Review:
In Norcast v Bradken, the first and only case to
consider the cartel prohibitions to date, the cartel prohibitions were found to
be applicable to an arrangement concerning a tender for the sale of a Canadian
corporation, which had business operations in Canada, Malaysia and Singapore,
where the seller was based outside Australia and the tender was conducted
outside Australia.[56]
The Harper Review recommended that the prohibition on
cartel conduct should be limited to ‘conduct involving persons who compete to
supply goods or services to, or acquire goods or services from, persons
resident in or carrying on business within Australia’ [emphasis added].[57]
To that end, items 3–5 and 7 of Part 1 in
Schedule 2 to the Bill insert references to ‘in trade or commerce’ into the
relevant paragraphs relating to the competition condition in subsection
44ZZRD(4). Item 8 repeals the existing note to subsection 44ZZRD(4) of
the CCA and adds a definitional reference to trade or commerce
as defined in section 4 of the CCA to mean trade or commerce within
Australia or between Australia and places outside Australia.
Therefore, unless at least two of the parties to the
relevant contract are engaged in trade or commerce within Australia or between
Australia and places outside of Australia, there will be no contravention of
the competition condition.
The amendments only relate to market aspects, that
is, the relevant nexus between the persons involved
in the cartel conduct. In relation to the conduct complained of,
however, there is no such restriction.[58]
Subsection 5(1) of the CCA provides for extraterritorial application of
the cartel provisions in qualified terms to include conduct outside Australia engaged
in by:
- bodies
corporate incorporated or carrying on business within Australia or
- Australian
citizens or
- persons
ordinarily resident within Australia.[59]
Likelihood
of competition
Currently, the competition condition which
is used to identify cartel conduct is satisfied if at least two of the parties
are or are likely to be in competition with one another in trade or commerce.
The Harper Review considered that the statutory definition
of likely was too low for cartel conduct, and recommended that
the cartel provisions ‘should be confined to conduct involving firms that are
actual or likely competitors, where likely means on the balance
of probabilities’.[60]
This was in response to a Federal Court decision which considered the statutory
definition of likely in section 44ZZRB.[61]
In its formal response to the Harper Review
recommendations in relation to the cartel conduct provisions, the Government did
not explicitly state that it would change the statutory definition of likely.[62]
The Exposure Draft proposed to repeal the definition.[63]
As outlined in the Explanatory Material accompanying the Exposure Draft, by
removing the definition of likely in section 44ZZRB, the word
would be interpreted analogously to other Part IV provisions including the
word ‘likely’.[64]
Contrary to the Exposure Draft, the Bill does not repeal
the definition of likely in section 44ZZRB and the Explanatory
Memorandum is silent as to the rationale for the change in approach. As such, contracts,
arrangements and understandings will continue to be subject to the cartel
provisions in instances where at least two of the parties are in competition
with each other in relation to the supply, acquisition or production of goods
or services, or there is a possibility that is not remote that they will be in
competition with each other.
Joint
ventures
Sections 44ZZRF and 44ZZRG of the CCA provide that
a corporation commits a criminal offence if it makes, or gives effect to,
respectively, a contract, arrangement or understanding which contains a cartel
provision. Corresponding civil penalty provisions are provided for in sections
44ZZRJ and 44ZZRK, respectively.
Currently, sections 44ZZRO and 44ZZRP of the CCA provide
for an exception from the criminal and civil penalty provisions for joint
ventures.[65]
The Harper Review considered that the joint venture
exception was cast too narrowly, thus excluding pro‑competitive
commercial conduct.
Items 11–14 amend subsection 44ZZRO(1) of the CCA
so that cartel conduct may occur via arrangement or understanding, in addition
to via contract. This reflects commercial realities—for instance, an
arrangement or understanding may have been reached in an informal setting and
may not be in written form—as well as blocking a potential gap in the law as a
result of the repeal of the prohibition on exclusionary provisions proposed in Schedules
3 and 4 of the Bill (see below).
In addition, item 13 provides a new requirement
that the joint venture is not carried on for the purpose of substantially
lessening competition, and recasts the current requirements that the:
- cartel provision in the contract, arrangement or understanding must
have been reasonably necessary for undertaking a joint venture and
- the
joint venture is for the production, supply or acquisition of goods or services.
Items 12 and 17 also provide that the
defendant bears a new, higher burden of proof (box 2) in relation to raising
the joint venture exceptions under sections 44ZZRO and 44ZZRP, respectively.
The Harper Review also noted that exempting joint ventures
from the cartel provisions does not exempt joint ventures from the general
provisions in the CCA.[66]
Accordingly, the Review considered that it needed to assess whether joint
ventures should be subject to the per se liability (including
potentially criminal liability) of the cartel provisions, or whether they
should be subject to the general Part IV standard of substantially lessening
competition.[67]
It decided that the latter standard was more appropriate. Since joint ventures
can have pro‑competitive aspects they should not be subject to a per
se prohibition. The introduction of a requirement that the defendant prove
that the joint venture is not carried on for the purpose of substantially
lessening competition is included as proposed paragraph 44ZZRO(1)(ba).
Box 2: burden of proof under cartel provisions
Under the current cartel provisions in the CCA, the
defendant bears an evidential burden in establishing the exceptions to both the
criminal offences and civil penalty provisions.[68]
See Note 1 to subsection 44ZZRO(1) and subsection 44ZP(2).
An evidential burden of proof borne by the
defendant means the burden of adducing or pointing to evidence that suggests
a reasonable possibility that the matter exists or does not exist.[69]
|
Item 15 repeals and replaces the note to subsection
44ZZRO(1) of the CCA to provide that the defendant bears a legal burden
in establishing the exception in that subsection to prosecution under sections
44ZZRF and 44ZZRG. The standard of proof required by the defendant to discharge
the legal burden of proof is on the balance of probabilities.[70]
Item 20 repeals and replaces subsection 44ZZRP(2) so that a defendant
who wishes to rely on the exemption in civil proceedings must prove that matter
on the balance of probabilities. The effect of items 15 and 20 is
to impose a higher standard of proof on the defendant than is currently the
case.
Items 21–37 make equivalent changes to Schedule 1
to the CCA in relation to cartel conduct by persons (as opposed to
corporations).
Renumbering
the cartel conduct provisions
Item 38 provides for the cartel conduct provisions
(sections 44ZZRA–44ZZRV) to be renumbered, and also accommodates for the repeal
of section 44ZZRQ[71]
(which deals with an exemption to the cartel provisions relating to covenants
affecting competition). Item 39 provides for equivalent renumbering of
Schedule 1 of the CCA.
Schedule
3—Price signalling and concerted practices
Commencement
The amendments in Schedule 3 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
Division 1A
of Part IV of the CCA
Division 1A of Part IV of the CCA relates to the
anti-competitive disclosure of pricing and other information. Division 1A is a
relatively recent addition to the CCA, having commenced on 6 June 2012.[72]
Essentially, Division 1A was created to prohibit anti-competitive
disclosure of pricing information, as well as prohibiting disclosure of a wide
range of matters if the purpose of the disclosure is to substantially lessen
competition in a market.[73]
Subsection 44ZZT(1) provides that Division 1A applies to
goods and services prescribed in the regulations. Currently, there are only two
goods or services prescribed:
- a good or service provided by an authorised deposit-taking
institution (within the meaning of the Banking Act 1959)
and consisting to any extent of taking money on deposit (otherwise than as
part-payment for identified goods or services) and
-
a good or service provided by an authorised deposit-taking
institution (within the meaning of the Banking Act) and consisting
to any extent of making advances of money.[74]
The Harper Review considered that Australia’s competition
laws should apply equally to all sectors of the economy, noting that Division
1A of Part IV of the CCA had applied only to the banking sector since
its enactment and that ‘no cases have been brought’.[75]
The Review also noted that ‘no one seems happy with the provisions in their
current form’.[76]
The Harper Review considered that the law could be
removed, and the provisions’ intent could be better captured in other
provisions of the CCA:
Other provisions of the competition law are capable of
addressing anti-competitive price signalling. For example, if the price
signalling causes competitors to agree the level of their prices, the conduct
will be prohibited as price fixing by the cartel provisions. If, on the other
hand, the price signalling falls short of price fixing but has the effect of
substantially lessening competition (by enabling competitors to co-ordinate
their pricing decisions), the conduct will generally be prohibited by section
45.[77]
Key
provision
To that end, the Harper Review recommended repealing
Division 1A and amending section 45 (which relates to contracts, arrangements
or understandings that restrict dealings or affect competition):[78]
Ensuring that section 45 of the CCA can apply to
instances of concerted practice that substantially lessen competition will meet
the policy intent of the price signalling provisions. This would remove the
need for a separate division on price signalling within the CCA, and is
consistent with simplifying the CCA and ensuring that its provisions
apply generally throughout the economy.[79]
The Government supported the recommendation.[80]
Accordingly, item 1 of Part 1 in Schedule 3 to the Bill repeals Division
1A of the CCA.
Introduction
of concerted practices
Section 45 of the CCA provides for a range of
offences relating to contracts, arrangements or understandings that restrict
dealings or affect competition. The Harper Review considered that section 45
should be expanded to include concerted practices (box 3), while at the same
time recommending that the exclusionary provisions references be removed.[81]
Exclusionary provisions are discussed below in relation to the amendments
proposed in Schedule 4.
Box 3: concerted practices
The Harper Review considered that section 45 should be the
central provision in the CCA that covers anti‑competitive
dealings between businesses. To that end, the Harper Review recommended that
in addition to its current coverage relating to contracts, arrangements or
understandings, that it also extend to concerted practices with one or more
persons that have the purpose, effect or likely effect of substantially
lessening competition.
The Review stated:
The word ‘concerted’ means jointly arranged or carried out
or co-ordinated. Hence, a concerted practice between market participants is a
practice that is jointly arranged or carried out or co-ordinated between the
participants. The expression ‘concerted practice with one or more other
persons’ conveys that the impugned practice is neither unilateral conduct nor
mere parallel conduct by market participants (for example, suppliers selling
products at the same price).
The Harper Review noted that both the UK and the EU
competition laws explicitly refer to concerted practices. As such, the Review
recommended that Division 1A of Part IV (which deals with anti-competitive
disclosure of pricing and other information) be repealed and that activity
now be covered under section 45.
|
Source: Competition Policy Review Panel, Competition policy review: final
report, Treasury, Canberra, March 2015, pp. 369–372.
Key
Provisions
Item 2 of Part 1 in Schedule 3 to the Bill repeals
and replaces subsections 45(1)–(3). Subsection 45(1) currently relates to
contracts made prior to the commencement of the Trade Practices
Amendment Act 1977 (being 1 July 1977) that contain an exclusionary
provision or have the purpose, or have or are likely to have the effect
of substantially lessening competition.[82]
The Harper Review considered that the subsection should be removed.[83]
Item 2 does that.
Subsection 45(2) of the CCA currently prohibits a
corporation from making a contract, arrangement or understanding which contains
an exclusionary provision or has the purpose, effect or likely effect of
substantially lessening competition. In addition, a corporation must not give
effect to such a provision of a contract, arrangement or understanding. Proposed
subsection 45(1) now contains the prohibition. However, the reference to an
exclusionary provision has been removed and a reference to concerted
practice is inserted. The Bill does not contain a definition of that term. According
to the Explanatory Memorandum:
A concerted practice is any form of cooperation between two
or more firms (or people) or conduct that would be likely to establish such
cooperation, where the conduct substitutes, or would be likely to substitute,
cooperation in place of the uncertainty of competition.[84]
Proposed subsection 45(2) captures contracts or
arrangements made, or understandings arrived at, before or after the
commencement of the section.[85]
Subsection 45(3) currently provides the definition of competition
for the purposes of section 45 of the CCA. The definition is unchanged
by the Bill, save for the addition of a reference to a concerted practice. Proposed paragraph
45(3)(b) provides that the definition of competition in
relation to a concerted practice is competition in any market in which a
corporation that is a party to the practice, or any related body corporate,
supplies or acquires, or is likely to supply or acquire goods or services, or
would be likely to do so, if not for the concerted practice.
Subsection 45(5) of the CCA sets out various
circumstances in which the section does not apply.[86]
Item 3 amends the CCA to insert proposed subsection 45(5A)
which applies to the making of a contract, arrangement or understanding.[87]
The effect of proposed subsection 45(5A) is to subject the making of
such a contract, arrangement or understanding to the exclusive dealing
provisions in section 47 of the CCA (unless it is permitted in some
other way) rather than section 45. However, the absence of reference to a
concerted practice would presumably mean that such conduct is to be caught
under section 45.
Item 4 amends existing subsection 45(6) so that
section 45 does not apply to, or in relation to, the giving effect to a
provision of a contract, arrangement or understanding, or engaging in a concerted
practice in circumstances that would be captured by other provisions of the CCA.
Item 5 repeals and replaces subsections 45(7)–(8)
which set out other circumstances in which section 45 does not apply to include
reference to a concerted practice. Item 5 also inserts proposed
subsection 45(8AA) which provides that section 45 does not apply to
concerted practices engaged in solely between Commonwealth or state or territory
entities. The Explanatory Memorandum to the Bill provides that this is to
ensure social policy objectives are not unduly hindered, in particular those
relating to community service obligations.[88]
Item 11 amends paragraph 4(2)(a) of the CCA to
explain that a reference to engaging in conduct in the CCA also includes
the engaging in of a concerted practice, as does a reference to conduct.
Items 6–10 make analogous changes to those
introduced by items 1–5 to Schedule 1 of the CCA. Items 12–15
make minor consequential amendments to the CCA.
Currently subsection 51(2) of the CCA sets out
those matters which are irrelevant to a decision that there has been a
contravention of Part IV—other than in respect of sections 45D,[89]
45DA,[90]
45DB,[91]
45E,[92]
45EA[93]
or 48.[94]
In particular, paragraph 51(2)(a) of the CCA provides
that any act done in relation to, or to the making of a contract or arrangement
or the entering into of an understanding, or to any provision of a contract,
arrangement or understanding, to the extent that the contract, arrangement or
understanding, or the provision, relates to, the remuneration, conditions of
employment, hours of work or working conditions of employees is an irrelevant
matter.
Item 16 in Part 2 of Schedule 3 to the Bill repeals
paragraph 51(2)(a) and inserts proposed paragraphs 51(2)(a) and (aa) to
extend the exception to a concerted practice.
Items 18 and 19 maintain the current exceptions
from potential contraventions of the above provisions in relation to:
- under paragraph 51(2)(c), obligations arising under a standard
set by Standards Australia or by a prescribed association or body and
- under paragraph 51(2)(d) in relation to business partnerships
-
under paragraph 51(2)(g) in relation to the export of goods or
the supply of services from Australia where full particulars were provided to
the ACCC in relation to the contract, arrangement or understanding.
Items 18 and 19 also add references to a concerted
practice to those exceptions as a result of the amendments introduced under Schedule
3 Part 1 of the Bill. Item 20 provides specifics that must be
provided to the ACCC in relation to the required particulars for the purposes
of proposed paragraph 51(2)(g).
Items 24–26 replace references in the collective
bargaining notification provisions of sections 93AB and 93AC in relation to
contracts, consistent with the amendments proposed to section 45. The effect of
these amendments will mean that corporations will only be able to provide
notification for contracts, arrangements or understandings, and not for
concerted practices under proposed paragraph 45(1)(c). The removal of
the application to exclusionary provisions is consistent with the proposed
repeal of section 4D (item 1 of Schedule 4 to the Bill) and changes to
section 45. Notification is discussed in Schedule 9.
Items 27–29 makes minor consequential amendments as
a result of the amendments to paragraph 51(2)(g) made by item 19.
Items 30–37 make analogous changes to Schedule 1 of
the CCA to those proposed by items 14–21.
Schedule 4—Exclusionary
provisions
Commencement
The amendments in Schedule 4 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
About
exclusionary provisions
Currently, subparagraphs 45(2)(a)(i) and 45(2)(b)(i) of
the CCA per se prohibit the making of a contract or arrangement or
understanding that contains an exclusionary provision, or of giving effect to a
contract, arrangement or understanding which contains an exclusionary provision
(box 4). Item 2 of Schedule 3 to the Bill removes these subparagraphs.
Box 4: what is an exclusionary provision?
An exclusionary provision simply means a ‘boycott’.[95]
In turn, a boycott relates to two or more businesses which are in competition
with each other in which either a contract, arrangement or understanding is
made which has a purpose of preventing, restricting or limiting: the supply
of goods or services to (or acquisition from) particular persons or classes
of persons; or only to supply or acquire in particular circumstances or on
particular conditions.
Examples could include two competitors in a market who
refuse to supply a downstream operator under any terms, or on prohibitively
high terms; or a group of suppliers agreeing on tenders for which each will
bid and those suppliers dividing up the market geographically between them.
There are therefore links between section 4D (which deems certain
contracts, arrangements or understandings to have exclusionary provisions, in
certain circumstances) and section 45 and the cartel provisions discussed in Schedule
2.
The reference to boycotts in relation to section 4D of the
CCA is not the same as a reference to secondary boycotts which relate
to two or more businesses acting in concert to constrain a third party from
supplying or acquiring goods or services from a fourth person. Secondary
boycotts are discussed in Schedule 6.
|
Source: Competition and Consumer Act 2010, sections
45D–45DA, 47.
The Harper Review considered:
... the prohibition of exclusionary provisions, separately from
cartel conduct, is unnecessary and increases the complexity of the law. The
definition of exclusionary provisions overlaps substantially with the
definition of market sharing, a form of cartel conduct. Many submissions agree,
supporting the removal of section 4D of the CCA.[96]
Items 2–5 of Schedule 4 to the Bill make
consequential amendments to the CCA to remove references to section 4D
and exclusionary provisions.
Schedule
5—Covenants affecting competition
Commencement
The amendments in Schedule 5 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
About
covenants
The Harper Review considered that sections 45B and 45C of
the CCA which deal with covenants (box 5) were unnecessarily duplicative
of other provisions, and hence recommended that they be repealed.[97]
Box 5: what is a covenant?
Section 4 of the CCA defines a covenant
to mean:
... a covenant (including a promise not under seal) annexed
to or running with an estate or interest in land (whether at law or in equity
and whether or not for the benefit of other land), and proposed
covenant has a corresponding meaning.
Section 45B covers covenants that affect competition in
real estate transactions in essentially the same terms as section 45 apart
from the fact that section 45B extends to persons as well as corporations and
also extends to:
- threatening
to engage in offending conduct if the other party to the covenant does not
comply with its terms and
- engaging
in offending conduct because a person who would, but for the section, be
bound by the covenant proposes not to comply with it.
Section 45C covers covenants in relation to prices in real
estate transactions in essentially the same terms as the price fixing provisions
in Division 1 of Part IV, apart from the fact that section 45C extends to
persons.
|
Source: RV Miller, Miller’s Australian competition and
consumer law annotated, 38th edn, Thomson Reuters, Sydney, 2016, p. 542.
Item 1 inserts definitions of contract
and party into subsection 4(1) of the CCA. The effect of
including a covenant as part of the definition of a contract
means that covenants will now be covered under section 45 of the CCA,
which deals with contracts, arrangements or understandings which affect
competition (see above). Accordingly, item 10 of Schedule 5 to the Bill
repeals sections 45B and 45C. Item 8 repeals section 44ZZRQ which is the
cartel provision relating to covenants. The inclusion of the definition of party
means that persons bound by or entitled to the benefit of the covenant are also
included within the scope of section 45, where they would currently not be if
those persons were not corporations.
Schedule 6—Secondary
boycotts
Commencement
The amendments in Schedule 6 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
Background
The secondary boycott provisions were inserted into the then Trade Practices Act 1974 (now the CCA)
in 1977[98]
in response to a recommendation of the Swanson Review which stated:
In our view, the [Trade Practices] Act should continue to
apply as at present to anti-competitive conduct by employer organisations:
With respect to such conduct by employees and employee organisations (which at
present have a much wider exception than is afforded employer organisations) we
recommend that the Government take steps to deal with certain problems raised
by the action of secondary boycotts ... and with collusion between organisations
of employees and any other person (being engaged in trade or commerce) which
results in a substantial lessening of competition.[99]
[emphasis added]
The sections are directed towards the activities of trade
unions.
Consistent with the views of the Swanson Committee, the
Fraser Government, which was responsible for inserting the secondary boycott
provisions, took the view that trade unions should be subject to the TPA
in relation to all of their activities other than those of employees directed
against their own employer.
How the
secondary boycott provisions operate
An explanation of secondary boycotts is provided in box 6.
Box 6: information about secondary boycotts
Secondary boycotts are generally found in employment
relationships. The CCA generally does not cover employment matters,
given that there is a recognition that matters arising in employment markets
can differ from those in relation to markets for goods and services.
Nevertheless, the limited role that the CCA has is in relation to
secondary boycotts (and also trading restrictions in industrial agreements).
Generally, a secondary boycott involves two (or more)
persons, acting in concert together to:
- hinder
or prevent a third person from supplying/acquiring goods or services from a
fourth person (who is not an employer of the persons acting in concert),
where the purpose, effect, or likely effect is to cause:
- substantial
loss or damage to the business of the fourth person (section 45D) or
- a substantial
lessening of competition in any market in which the fourth person trades
(section 45DA) or
- have
the purpose, effect, or likely effect of preventing or substantially
hindering a third person (who is not an employer of the first person) from
engaging in trade or commerce involving the export or import of goods
(section 45DB).
|
The Harper Review considered that secondary boycotts had not
been as vigorously enforced by the ACCC, compared with other offences under
Part IV of the CCA.[100]
It is possible that enforcement of secondary boycotts was not as vigorous as
enforcement for other breaches of Part IV for a number of reasons, including:
- the maximum penalty for secondary boycotts is currently less than
ten per cent of the maximum penalty for contraventions of other Part IV
provisions—this would represent a strong parliamentary indication as to where
the ACCC should prioritise its scarce enforcement resources (to the
contraventions which attract more significant penalties) and
- there may be a greater incidence of other Part IV contraventions
vis-à-vis secondary boycotts.
The Harper Review stated:
As with all competition laws, the secondary boycott laws will
only act as a deterrent to unlawful behaviour if the laws are enforced
consistently and effectively.[101]
Key
provisions
Section 76 of the CCA is the key penalty
provision in relation to breaches of the restrictive trade practices provisions
of the Act—including the secondary boycott provisions. Subsection 76(1A)
provides a maximum pecuniary penalty for corporations of the greater of $10
million or three times the gain from the contravention or where gain cannot be
readily ascertained, ten per cent of the annual turnover of the body corporate
and all of its interconnected bodies corporate (if any) in the first 12 months
after the contravention occurred.
However, there is an exception (contained in paragraph
76(1A)(a)) to this general rule which applies to acts or omissions to which
sections 45D, 45DB, 45E and 45EA apply. In that case the maximum penalty is
$750,000.
The Harper Review, recommended that ‘the maximum penalty
level for secondary boycotts should be the same as that applying to other
breaches of the competition law’.[102]
Item 1 of Schedule 6 amends paragraph
76(1A)(a) of the CCA by omitting references to sections 45D and 45DB,
which cover secondary boycotts. In summary, section 76 provides for pecuniary
penalties (that is, fines) for contraventions of Part IV, as well as a number
of other provisions in the CCA.
This means that contraventions of the secondary boycott
provisions will be subject to the default maximum penalty provision of
$10,000,000 as outlined above.
Right to
freedom of association
The Parliamentary Joint Committee on Human Rights Scrutiny
Report considered that the proposed maximum potential penalty for secondary
boycott offences in section 76 of the CCA may constitute a limitation on
the right to freedom of association.[103]
In particular, the Committee noted that the Government’s statement of
compatibility did not discuss the penalty increase in those terms.[104]
Further, the Committee noted that the statement did not explain the kind of
matters not considered to have a dominant purpose relating to employment, to
which the increase in secondary boycott penalties is to apply.[105]
The Committee requested further advice from the Treasurer. At the time of
writing, a response had been received but not published.[106]
Right to
freedom of assembly and expression
The Parliamentary Joint Committee on Human Rights Scrutiny
Report noted:
As the increased penalty may have the effect of discouraging
certain kinds of protest activities it may engage and limit the right to
freedom of assembly and expression. These rights were not addressed in the
statement of compatibility.[107]
The Committee requested further advice from the Treasurer
as to:
- whether the measure is aimed at
achieving a legitimate objective for the purposes of international human rights
law;
- how the measure is effective to
achieve (that is, rationally connected to) that objective; and
-
whether the limitation is a
reasonable and proportionate measure to achieve the stated objective (including
any relevant safeguards).[108]
At the time of writing, a response had been received but
not published.[109]
Schedule
7—Third line forcing
Commencement
The amendments in Schedule 7 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
About third
line forcing
Third line forcing (box 7) is covered under subsections
47(6)–(7) of the CCA, and by virtue of the operation of
subsection 47(10) is a per se prohibition.
Box 7: what is third line forcing?
Third line forcing is a vertical supply arrangement
whereby a supplier, as part of supplying goods or services, requires the
purchaser to buy additional (perhaps unwanted) goods or services from a third
party. For example, a corporation may supply paint to an individual and then
require that individual to hire a painter from a third party business.
The key features of third line forcing are that it
requires two distinct goods or services, with the supply of the first by one
party being subject to acquisition of the second from a different party. It
is therefore distinguishable from another common practice of bundling or
tying of goods or services. Bundling involves the supply of both of
the goods or services by the one supplier, for example, the sale of
white goods and an extended warranty by the same corporation.
|
Source: Miller, Miller’s Australian competition and consumer
law annotated, op. cit., p. 612.
Harper
Review consideration
According to the Harper Review, as a general principle:
... the CCA should not interfere with trading conditions
agreed between buyers and sellers in connection with acquiring and supplying
goods and services, unless those conditions have the purpose, effect or likely
effect of substantially lessening competition.[110]
Section 47 of the CCA prohibits the following
categories of vertical restraint practices:
- supplying
goods or services on condition:
-
the
purchaser does not acquire goods or services from a competitor or the supplier [111]
- the
purchaser accepts some restriction on the right to resupply goods or services[112]
or
- the
purchaser acquires other goods or services from a third party[113]
- acquiring goods or services on condition that the supplier
accepts some restriction as to the freedom to supply third parties[114]
- refusing
to supply goods or services because:
- the
purchaser has dealt or refused to cease dealing in a competitor's products[115]
- the
purchaser has failed to accept some restriction on the right to resupply[116]
or
- the
purchaser refuses to acquire other goods or services from a third-party[117]
- refusing
to acquire goods or services because the supplier refuses to accept some
restriction on the right to supply third parties[118]
and
-
aiding, abetting, procuring, counselling or inducing any
corporation to engage in any of the conduct referred to above.[119]
The general rule is that these practices are prohibited
where the conduct has the purpose or likely effect of substantially lessening
competition. However, the exception to this general rule is third-line forcing
which is prohibited per se—that is, regardless of the purpose or effect
of the conduct.
The Harper Review considered section 47 of the CCA
(which prohibits exclusive dealing) could be repealed in its entirety as a
result of recommended changes to sections 45 and 46.[120]
The Review considered that if section 47 were to be maintained, then third line
forcing should cease being subject to a per se prohibition and instead
be subject to the same competition test as applies to the other conduct set out
in section 47.[121]
Key
provisions
Item 1 of Schedule 7 to the Bill amends subsection
47(10) so that all of the exclusive dealing contraventions are subject to the
competition test and third line forcing is no longer prohibited per se.
Items 2 and 3 make minor consequential amendments
as a result of item 1. Item 4 removes subsection 47(10A) which
permits the ACCC to provide notification in relation to conduct which would
otherwise constitute a contravention of the third line forcing provisions. The
removal of this subsection operates so that third line forcing is treated in
the same way as the other conduct described in section 47 in that conduct is
subject to a competition test (item 1) and is subject to the general ACCC
notification provisions in section 93 of the CCA.
Schedule 8—Resale
price maintenance
Commencement
The amendments in Schedule 8 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
About
resale price maintenance
Schedule 8 of the Bill makes amendments relating to
resale price maintenance (box 8) which is covered under section 48 of the CCA.
Box 8: what is resale price maintenance?
Resale price maintenance is a form of vertical restriction
concerning resale prices. It generally involves a supplier supplying a
product to a person on the condition that the product cannot be sold below a
price specified by the supplier. For example, a manufacturer may provide its
televisions to a retailer, and as part of providing the television, the manufacturer
states that the television is not to be sold below a certain price.
|
Source: Miller, Miller’s Australian competition and consumer
law annotated, op. cit., p. 621.
Harper
Review consideration
Section 48 of the CCA prohibits resale price
maintenance and makes it a per se offence. However, resale price
maintenance may be authorised if a manufacturer can demonstrate that the
imposition of resale price maintenance results in such a public benefit that it
should be allowed to be made.
The Harper review noted that the appropriateness of a per
se prohibition of resale price maintenance has been debated for many years.[122]
The rationale for the per se prohibition is that resale price
maintenance may cause significant harm to the competitive process, including
by:
-
facilitating collusion between suppliers: resale price
maintenance conduct may be used by suppliers to reduce or eliminate price
competition between its customers
-
facilitating collusion between retailers: a bottom up resale
price maintenance occurs when one or more retailers compel a supplier to adopt
resale price maintenance conduct to reduce or eliminate price competition at
the retail level
-
supplier exclusion: an incumbent supplier may use resale price
maintenance conduct to guarantee margins for retailers to make them unwilling
to carry the products of a rival or new entrant
-
retailer exclusion: resale price maintenance conduct can be used
as a means to eliminate retail competition from discount or more efficient
retailers.[123]
The Harper Review considered that there was not a
sufficient case for changing the prohibition of resale price maintenance from a
per se prohibition to a competition based test. Rather, the notification
process should be extended to resale price maintenance to provide a quicker and
less expensive exemption process for business. In addition, the Harper review
considered that the prohibition should also be amended to include an exemption
for resale price maintenance conduct between related bodies
corporate—consistent with sections 45 and 47 of the CCA.[124]
Key
provisions
Accordingly, item 2 in Schedule 8 to the Bill inserts
proposed subsection 48(2) which provides that there is no contravention
of the prohibition of resale price maintenance where the corporation engaging
in resale price maintenance has notified the ACCC and a notice is in force
under section 93 of the CCA. Item 1 makes a minor consequential
amendment as a result of item 2.
Item 21 in Schedule 8 to the Bill inserts proposed
subsection 96(8) into the CCA so that a corporation (known as the supplier)
does not engage in resale price maintenance if the supplier and
the second person (referred to in subsection 96(3)) are bodies corporate that
are related to each other.
About
notifications
Section 93 of the CCA relates to notifications.
Notifications are discussed in box 9.
Box 9: what is notification?
Notification is a process whereby conduct which would
otherwise contravene particular provisions of the CCA is effectively
permitted, and is regulated by the ACCC. Currently, notification is only
available for conduct in relation to section 44ZZW—which deals with the
private disclosure of pricing information—or in relation to subsections
47(2)–(9), which cover exclusive dealing.[125]
|
Currently, notification is not available for resale price
maintenance, although conduct may currently be permitted under the authorisation
provisions of subsection 88(8A) of the CCA. The authorisation process is
discussed in Schedule 9.
Key
provisions
Broadly speaking, section 93 of the CCA allows a
corporation to file a notice with the ACCC in relation to conduct that would
otherwise breach the provisions of section 47 in relation to exclusive dealing
conduct. The notice must be in the manner and form specified in regulation 9 of
the Competition and
Consumer Regulations 2010. Lodgement of the notification provides statutory
protection in relation to the relevant conduct to the corporation.
Item 5 repeals and substitutes subsection 93(1) of
the CCA which sets out the scope of notifications. Reference to
section 44ZZW (which deals with private disclosure of prices to
competitors) is repealed owing to the fact that section 44ZZW is itself
repealed by Schedule 3, item 1 which repeals Division 1A of Part IV. Proposed paragraph 93(1)(b)
includes a reference to section 48—resale price maintenance—in the
notifications regime as recommended by the Harper Review. Since resale price
maintenance can be engaged in by persons (as well as corporations), items
6–8, 10–11, 15, and 17–19 make minor consequential amendments to include references
to ‘or other person’.
Item 13 repeals and replaces subsection 93(7A) of
the CCA to set out the time that a notification of proposed resale
maintenance comes into effect. Under proposed subsection 93(7A), the
statutory protection commences at the end of 60 days (or other such period as
prescribed in the regulations) after the day that the corporation gave the notice
to the ACCC. Alternatively, if the ACCC gave notice under subsection 93A(2)
(which deals with the ACCC holding a conference in relation to a draft notice) and
decides not to give the corporation or other person a notice under section
93(3A) because the ACCC is not ‘satisfied that the likely benefit to the public
from the conduct or proposed conduct will not outweigh the likely detriment to
the public from the conduct or proposed conduct’, then at the time the ACCC
makes that decision.
Item 20 makes a minor consequential amendment to
subsection 93A(2) as a result of the proposed inclusion of ‘or other person’ by
item 2 within the ambit of resale price maintenance under section 48 of
the CCA.
Schedule 9—Authorisations,
notifications and class exemptions
Commencement
Item 104 of Schedule 9 to the Bill commences
immediately after Schedules 3–8 commence. Item 133 commences immediately
after Schedules 10 and 11 commence. All other amendments in Schedule 9 to the
Bill commence at the same time as the amendments in Schedule 1 to the Bill.
About
authorisation
Schedule 9 to the Bill proposes a substantial
number of amendments to the authorisation and notification provisions of the CCA.
Authorisation is discussed in box 10 below, and notification was discussed in
box 9 above.
Authorisation is an alternative process to notification,
although they do not apply to the same conduct. The authorisation process
applies to most types of business conduct. The ACCC may grant authorisation for
a business to engage in certain anti-competitive conduct if it is satisfied
that the conduct generates a net public benefit. The exemption from the
competition law does not commence until the ACCC has made a determination in
respect of an application which may take some months.[126]
Notification has an advantage over authorisation in that
the relevant exemption is generally provided upon filing the notification.[127]
Harper
Review consideration
The Harper Review considered that the notification and
authorisation procedures in the CCA were unnecessarily complex and made
a number of recommendations to improve their efficacy.[128]
The Review also noted that the absence of a block exemption power represented a
substantive gap in the law, and made a recommendation to introduce such a
power.[129]
The Government supported the recommendation on
authorisation and notification and noted that it:
... will simplify the authorisation and notification provisions
of Part VII of the CCA to ensure that only a single application is required for
a single business transaction or agreement and allow the ACCC to consider both
competition and public benefit considerations.[130]
The Government supported the recommendation to introduce a
block exemption power, and noted that such ‘safe harbour’ provisions have the
opportunity to reduce business compliance costs vis-à-vis the authorisation and
notification processes, as well as to provide further certainty about the
application of the CCA.[131]
Summary of
the changes
Among other things, Schedule 9 makes a number of
substantive amendments relating to authorisation and notification, which in
summary are:
- the ACCC authorisation provision in section 88 is completely
rewritten, which allows for:
-
a
broader range of restrictive trade practices to be authorised
- multiple
restrictive trade practices to be covered by one authorisation process
- the
ACCC to grant an authorisation subject to conditions
- Division 3 of Part VII (which deals with merger clearances and
merger authorisations) is repealed and authorisations relating to mergers will
now be subject to the new authorisation procedures in proposed section
88
- section 90 (which deals with the ACCC making a determination on
applications seeking authorisation) is substantively amended to allow the ACCC
to choose whether to assess the application under a substantially lessening
competition test or a public benefit test
- section 93 (which deals with notifications) is amended, which,
when combined with the other amendments proposed by Schedule 8, permits:
-
a
broader range of conduct to be subject to notification
- the
ACCC to grant notification subject to conditions.
Box 10: what is authorisation?
Authorisation is a process whereby conduct which would
otherwise contravene particular provisions of the CCA is effectively
immunised, and is regulated by the ACCC. There are two types of
authorisation:
- section
50 merger authorisations (Division 3 of Part VII)
- all
other authorisations (Division 1 of Part VII).
Section 50 merger authorisations
Division 3 of Part VII provides for two types of section
50 merger authorisations:
- merger
clearances (Subdivision B)
- merger
authorisations (Subdivision C).
As explained in the simplified outline (section 95AA), the
main differences between merger clearances and authorisations are:
- different
bodies decide whether they should be granted—the ACCC and the Competition
Tribunal, respectively
- different
timeframes apply for when the decision must be made—generally 40 business days
for the ACCC and three months for the Competition Tribunal
- they
have different tests that need to be satisfied for them to be granted—the
ACCC has to be satisfied that the acquisition would not have the effect or
likely effect of substantially lessening competition; whereas the Competition
Tribunal needs to be satisfied that the acquisition would result or likely
result in such a benefit to the public that the acquisition should take place
- merits
review is available for decisions on merger clearances by the ACCC, but not
for decisions on merger authorisations by the Competition Tribunal.
All other authorisations
Currently, authorisation is granted by the ACCC and is
available in relation to:
- making
or giving effect to a contract, arrangement or understanding which contains a
cartel provision (subsection 88(1A))
- making
or giving effect to a contract, arrangement or understanding which affects
competition (subsection 88(1))
- a
requirement for the giving of a covenant which has the purpose, effect or
likely effect of substantially lessening competition (subsection 88(5))
- a
private disclosure of information (subsection 88(6A))
- secondary
boycotts (subsection 88(7))
- trading
restrictions in industrial agreements (subsection 88(7A))
- exclusive
dealing (subsection 88(8))
- resale
price maintenance (subsection 88(8A))
- a
dual listed company arrangement (subsection 88(8B))
- a
person acquiring a controlling interest in a body corporate, within the
meaning of section 50A (subsection 88(9)).
|
Key
provisions
Items 27–29 relate to definition provisions
affecting authorisation. Item 27 repeals and replaces the definition of authorisation
in subsection 4(1) of the CCA so that it captures all authorisations
under the amended provisions of Division 1 of Part VII. This means that
merger authorisations will become subject to the authorisations process
outlined in section 88, as opposed to being assessed under its own bespoke
regime as is currently the case. The definition of clearance—which
relates to a merger clearance granted by the ACCC—is repealed as all mergers
are to occur via one process, the merger authorisation process. Item
29 inserts a definition of merger authorisation to
distinguish it from the definition proposed by item 27, so as to ensure
that the relevant test applied is the one under section 50 or 50A (as the case
may be), rather than the generic authorisation process which is
covered under proposed section 88.
Item 1 repeals and replaces section 88 of the CCA
which deals with authorisations. Proposed subsection 88(1) empowers the
ACCC to grant authorisation to a person to engage in conduct which might
otherwise contravene one or more provisions of Part IV of the CCA. The
effect of proposed subsection 88(1) is to expand the scope of the
section by making section 46 or 46A (which relate to the misuse of market
power) and section 50 (which deals with mergers and is currently subject to a
bespoke authorisation regime which is discussed below) subject to the
authorisation regime.
The effect of an authorisation once in force is that it
immunises the relevant conduct from the provisions to which it relates. For
example, an authorisation that is granted in relation to making a contract
where the purpose, effect or likely effect of that contract is to substantially
lessen competition (an offence under subparagraph 45(2)(a)(ii)) provides a
statutory protection to the maker of the contract.
Currently, most of the authorisation provisions provide
immunity for the applicant and ‘to every other person named or referred to in
the application’.[132]
Proposed paragraph 88(2)(c) extends the authorisation to ‘any particular
persons or classes of persons, as specified in the authorisation, who become
engaged in the conduct’. This allows groups of persons to benefit from the
authorisation. In addition to broadening the group of potential persons covered
by an authorisation, proposed subsection 88(5) permits the ACCC to grant
a single authorisation in relation to all conduct specified in the application;
or it may grant separate authorisations for any of the conduct. The effect is
to reduce regulatory burdens on applicants by avoiding the need to apply for
multiple authorisations to immunise what would otherwise amount to multiple
contraventions of Part IV. Currently, each authorisation can only deal with one
type of conduct. However, any reduction in regulatory burden is conditional
upon the ACCC providing for a single authorisation which permits conduct which would
otherwise be multiple contraventions of Part IV.
Proposed subsection 88(3) permits the ACCC to grant
an authorisation subject to conditions. Currently, authorisation is a ‘yes’ or
‘no’ decision, that is, there is no scope for conditional approval. This is a
significant change to the law as it allows the ACCC a broad discretion to
impose conditions on the applicant. According to the Explanatory Memorandum to
the Bill:
The ability to grant an authorisation subject to conditions
allows the [Australian Competition and Consumer] Commission to address elements
of the conduct which are a cause for concern, rather than denying the
application outright on the basis of those concerns.[133]
While this amendment makes the authorisation regime more
flexible, the flexibility is not without risk. Proposed subsection
88(3) gives the ACCC a wide discretion to impose conditions. Conditions
are not defined in the CCA, although proposed subsection 88(4)
indicates that—without limiting the application of proposed subsection
88(3)—in relation to a merger authorisation, the ACCC may grant
authorisation subject to an undertaking under section 87B of the CCA.
The ACCC’s power under section 87B is broad:
The [Australian Competition and Consumer] Commission may
accept a written undertaking given by a person for the purposes of this section
in connection with a matter in relation to which the Commission has a power or
function under this Act (other than Part X).[134]
Given the foregoing, undertakings could be required in
relation to authorisations other than merger authorisations, and could relate
to any matter within the ACCC’s powers or functions. Once accepted,
undertakings can only be varied or withdrawn with the consent of the ACCC.[135]
More generally, proposed subsection 88(1)
explicitly provides that authorisation can only relate to conduct engaged in
for the purposes of the relevant provision(s) in Part IV of the CCA. As
such, only conduct relating to Part IV can be authorised. However, proposed
subsection 88(3)—which permits the ACCC to impose conditions on an
authorisation—is not so constrained. It would therefore appear that conditions
could be imposed which are outside of Part IV. It would appear reasonable to
provide that any conditions imposed should only relate to the conduct being
authorised, which would be limited to conduct relating to Part IV of the CCA.
Such an approach would be analogous to proposed paragraph 93AAA(1)(b) (at
item 7) in relation to conditions that can be imposed on a notification
relating to resale price maintenance. The ACCC’s ability to impose conditions
is explicitly limited to only relate to resale price maintenance.
Proposed subsection 88(4) provides that in relation
to a grant of a merger authorisation, the ACCC may require an undertaking from
the applicant. This indicates that the ACCC’s power to impose a condition on
authorisation is quite far reaching. The ACCC did express some concern that its
workload would increase with the expansion of conduct able to be immunised by
way of authorisation.[136]
In addition to a potential increased administrative burden for the ACCC, the
amendments also subject applicants to increased uncertainty and risk. The
uncertainty relates to whether the ACCC will conditionally approve an
authorisation, and the risk is the form that any conditions take (such as an
undertaking for instance). If the uncertainty and/or risks are sufficiently
great, then the applicant may not seek authorisation, which would in turn not
increase the workload of the ACCC.
Proposed subsections 88(6)–(7) maintain the current
provisions in section 88, being:
- the
ACCC cannot authorise conduct which has already taken place and
- the
applicant may withdraw their application at any time.
Item 2 repeals subsection 90(2) which requires the
ACCC to take into account any submissions in relation to the application made
to it by the applicant, the Commonwealth, a state, or by another person, in
determining whether to grant authorisation. It is replaced by broader
consultation provisions in item 3, specifically proposed subsections
90(6)–(6A).
Section 90 currently sets out the tests to be satisfied
before the ACCC grants an authorisation of the conduct referred to in existing section
88. Given the changes to section 88 proposed by item 1 to agglomerate
the authorisation provisions and broaden its application to include all Part IV
conduct, analogous changes are made to section 90.
Proposed subsections
90(7) and (8) restate the tests to provide clarity. Under proposed
subsection 90(7) the ACCC must not make a determination granting
authorisation under section 88 unless it is satisfied:
-
the conduct would not have the effect or likely effect of
substantially lessening competition (competition test) or
-
the conduct would result or likely result in a benefit to the
public, and the benefit would outweigh the detriment to the public that would
result or likely result from the conduct (welfare test).
Proposed subsection 90(8) provides the exception to
that general rule. The competition test does not apply to the per se
prohibitions in Part IV—namely the cartel provisions, secondary boycotts,
and resale price maintenance. Authorisation relating to conduct which would
otherwise contravene these provisions needs to satisfy the welfare test.
A third test currently exists under subsections 90(8A),
(8B) and (9) in relation to specified conduct, which provides that
authorisation may only be granted where the ACCC is satisfied that the proposed
conduct would result, or likely result, in such a benefit to the public that
the proposed conduct should be allowed (benefit test). Subsection 90(9A) provides
that in determining what amounts to a benefit for these purposes, the ACCC must
regard the following as benefits to the public:
- a significant increase in the real value of exports
- a significant substitution of domestic production for imported
goods and
-
all other relevant matters that relate to the international
competitiveness of any Australian industry.
Currently subsection 90(9A) applies in relation to
authorisations for arrangements by dual listed companies[137]
and for overseas acquisitions.[138]
Item 4 amends subsection 90(9A) so that the matters listed are to be
taken into account by the ACCC in determining an application for authorisation
to which section 49 applies or to an application for a merger authorisation.
The relevant matter is what amounts to a benefit. Currently
authorisation for this type of conduct is assessed under the welfare test.
Ordinarily what amounts to a benefit under the welfare test would be left for
the courts to assess. The effect of item 4 is to specify particular
matters that must be regarded as benefits under the welfare test. Item 4
provides a non-exhaustive statutory definition of what amounts to a benefit,
namely the benefit test, and provides that that definition must be used by the
ACCC in assessing applications for authorisation of mergers or conduct that
would be covered by section 49. The consequence of this amendment is that a
broader range of benefits must be taken into account by the ACCC than is
currently the case in relation to mergers. As a result, this may make it easier
for applicants to demonstrate that the proposed conduct to be authorised
satisfies the welfare test.
Section 93 of the CCA deals with the procedure by
which, and the limits within which, corporations are entitled to obtain
statutory protection in relation to exclusive dealing conduct which may
otherwise breach section 47 and in relation to disclosure of pricing
information to competitors to which Division 1A of Part IV applies. One of the
reasons for the changes to section 93 is that Division 1A is repealed by the
Bill.
Subsection 93(3) empowers the ACCC to notify a corporation
that the conduct or proposed conduct which the corporation set out in a
notification is not approved. Notification was discussed in relation to the
amendments proposed in Schedule 8. Item 5 repeals and replaces
subsection 93(3). The scope of conduct captured by proposed subsection 93(3)
is a consequential amendment made as a result of the changes to the scope of
notification proposed in Schedule 8. In particular, the scope of
notification is expanded to include the forcing provisions.
Item 7 inserts proposed section 93AAA into
the CCA which empowers the ACCC to impose conditions on notifications
which relate to resale price maintenance. There is currently no provision which
allows the ACCC to impose conditions in relation to notification, and in any
event, resale price maintenance has only become subject to the notification
provisions as a result of the amendments proposed in Schedule 8. If the
ACCC exercises this power it must provide a written statement of its reasons
for imposing the relevant conditions.
Item 6 repeals and replaces subsection 93(3B) of
the CCA. Currently, that subsection requires the ACCC to provide a
written statement of its reasons for not approving the conduct that was
specified in a notification. Proposed subsection 93(3B) deals with a
notification which is subject to a condition imposed by the ACCC where the ACCC
is satisfied that the corporation or other person has failed to comply with
those conditions. In the event that that occurs, the ACCC may give notice in
writing to the corporation or other person stating that it is so satisfied and
a statement of its reasons.
The amendments also reflect necessary changes as a result
of proposed amendments to the process of notification.
A person who is dissatisfied with the notice given by the
ACCC may apply to the Competition Tribunal for a review.[139]
Section 102 of the CCA empowers the Competition Tribunal to review determinations
by the ACCC in relation to an application for authorisation as well as the
variation or revocation of an authorisation. Subsection 102(4) deals with review
of a decision by the ACCC to give a notice under 93(3) advising that the
conduct proposed in the authorisation application—that is, exclusive dealing
which may otherwise breach section 47 and disclosure of pricing information to
competitors—is not approved. The Tribunal must make a decision setting aside
the ACCC’s notice if the applicant for the review satisfies the Tribunal (as
currently relevant) that the conduct has or is likely to result in a benefit to
the public and that benefit outweighs the detriment to the public constituted
by any lessening of competition. Item 126 removes reference to
‘constituted by any lessening of competition’ and hence broadens the potential
detriment to which the Competition Tribunal may have regard in making a
determination to set aside the ACCC’s notice.
About
collective bargaining
Collective bargaining is discussed in box 11.
Box 11: what is collective bargaining?
Collective bargaining is usually an arrangement whereby
two or more competing businesses jointly negotiate with a supplier over the
terms and conditions of a contract. The two businesses may appoint a third
party (usually an agent) to negotiate on their behalf. Collective bargaining
may also involve two or more businesses negotiating with a (usually large)
customer on prices, with an understanding between the two or more businesses
that if no agreement can be reached, they will both (or all) forego supplying
the customer. This type of activity is often referred to as a ‘collective
boycott’.
Collective bargaining would generally be considered
anti-competitive as it would contravene the cartel provisions of the CCA,
in particular in relation to prices received (that is, price fixing), or in
relation to agreeing to refuse to deal with a customer (that is, restricting
supply).
Since cartel conduct is per se prohibited, engaging in
collective boycott conduct would be a contravention of the CCA, unless
an exception applies. An exception is available via the notification process
in section 93AB.
|
Source: Competition Policy Review Panel, Competition policy review: final
report, Canberra, March 2015, p. 399.
Harper
review consideration
The Harper Review noted that whilst ‘collective bargaining
will often be harmful to competition, it can also have beneficial effects’ for
small business.[140]
Accordingly, the Harper Review recommended that the CCA should be amended
to introduce greater flexibility into the notification process for collective
bargaining by small business including:
- the nomination of members of the bargaining group, such that a
notification could be lodged to cover future (unnamed) members
-
the nomination of the counterparties with whom the group seeks to
negotiate, such that a notification could be lodged to cover multiple
counterparties and
- different timeframes for different collective bargaining notifications,
based on the circumstances of each application.[141]
Those recommendations were supported by the Government.[142]
Key
provisions
Item 29 inserts a new definition of collective
boycott conduct into subsection 4(1) of the CCA being conduct
that has a purpose referred to in subsection 44ZZRD(3) in relation to a
contract, arrangement or understanding (that is, the purpose condition) which
attaches to a cartel provision.[143]
Existing section 93AB of the CCA entitles
corporations that have made or propose to make or give effect to a contract
that involves an exclusionary provision or a cartel provision to lodge a collective
bargaining notice with the ACCC if the following four pre-conditions
are met:
- the contract must relate to the supply or acquisition of
particular goods or services to or from a target of the conduct
by the parties to the contract
- the notifying party must reasonably expect that it will make
contracts for the supply or acquisition of one or more of the above-mentioned goods
or services with the target
- the notifying part must reasonably expect that the price of the
goods or services to be supplied or acquired will not exceed a specified amount
in any 12 month period and
- the
notice cannot be given by a trade union or anyone acting on the direction of a
trade union.
Consistent with the recommendation of the Harper Review, item
8 amends subsection 93AB(2) to allow for notification of collective
bargaining between the parties to apply to more than one other person, referred
to as targets. Items 9–14 make minor consequential
amendments as a result of the introduction of multiple targets.
In particular, proposed subsection 93AB(7A) provides that a collective
bargaining notice for a group of contracting parties may be expressed to be
given on behalf of persons who become members of the group after the notice is
given—provided that those persons could have given the notice on their own
behalf at the time they became members of the group.
Under section 93AC of the CCA the ACCC may give a
corporation which has lodged a collective bargaining notice, a written objection
notice if it is satisfied that any benefit to the public resulting from
the provision would not outweigh the detriment to the public that would result
from the provision. Item 16 of Schedule 9 to the Bill inserts proposed
section 93ACA which empowers the ACCC to impose conditions in relation to
collective bargaining conduct. Item 15 inserts proposed subsection
93AC(2A) into the CCA so that the ACCC may issue an objection notice
relating to collective boycott conduct where the ACCC is
satisfied that a corporation has failed to comply with the conditions that have
been imposed. Item 15 represents an expansion of the ACCC’s powers in relation
to collective boycott conduct.
Section 93AD of the CCA governs when collective
bargaining notices come into force and cease to be in force. Item 17 of
Schedule 9 to the Bill amends paragraph 93AD(1)(a) so that a collective
bargaining notice comes into force 14 days (or a longer period prescribed by
regulation) after the notice is given. However, the exception to that general
rule is that a notice about collective boycott conduct enters
into force after 60 days (unless a different period is prescribed by
regulations).
Items 18 and 20 amend section 93AD to extend the
period for which a collective bargaining notice has effect. The default period
is three years by virtue of proposed subparagraph 93AD(3)(c)(i). If the
ACCC is satisfied that three years is inappropriate in the circumstances, then
it may set the period up to ten years under proposed subsection 93AD(5).
Item 21 inserts proposed section 93AG into
the CCA which provides for a stop notice for collective boycott
conduct. In effect, where a collective bargaining notice that relates
to collective boycott conduct is in force (see items 17–20
above), there has been a material change in circumstances since the notice
entered into force, and the ACCC reasonably believes that the collective
boycott conduct has or will result in serious detriment to the public,
then the ACCC may issue a stop notice—which must be accompanied by a written
statement of reasons.[144]
A stop notice comes into force at the time that it is given to a corporation.[145]
A stop notice generally ceases to be in force 90 days after it is given,
although this period can be extended by a further 90 days if the ACCC is
satisfied in all the circumstances that it is reasonable to do so.[146]
The conduct that was the subject of the collective bargaining notice is no
longer immunised from a possible contravention of subsection 44ZZRD(3) for the
duration of the stop notice.
Item 22 repeals Division 3 of Part VII which covers
merger clearances by the ACCC and merger authorisations by the Competition
Tribunal (see box 10 above). The repeal is consequential to the amendments made
above whereby all authorisations are to be assessed in the first instance by
the ACCC under new section 88 of the CCA. Item 22
introduces class exemptions which are discussed below.
About class
exemptions
Items 22–26 introduce a process for the
introduction, withdrawal, and review of class exemptions (box 12).
Box 12: what are class exemptions?
Class or block exemptions grant a ‘safe harbour’ to
certain types of conduct. As such, unlike the authorisation and notification
provisions in Part VII, class exemptions are not applicant-based. Instead,
the ACCC would be responsible for granting class exemptions which would then
apply to an entire class of businesses, rather than individual businesses. The
ACCC would need to be satisfied that the conduct would satisfy either the
competition test or the welfare test (see above).
Class exemptions exist as part of the competition
framework in the United Kingdom, the European Union, and Singapore.[147]
|
Harper
Review consideration
According to the Harper Review:
A block exemption power under the CCA may be an efficient way
to deal with certain types of business conduct that are unlikely to raise
competition concerns, either because of the parties engaged in the conduct or
the nature of the conduct itself. This would be an efficient means to provide
certainty for businesses in respect of conduct that is unlikely to raise
significant competition problems. It may also play a role in educating and
informing business about the types of conduct that do not raise competition
concerns and those that do.[148]
In its submission to the Harper Review, the ACCC set out
the features which it considered should be incorporated into a block exemption
regime being:
-
the basis for the ACCC issuing a particular block exemption
should be either that the conduct is unlikely to substantially lessen
competition or that it results in a net public benefit
- the ACCC should have the ability to set parameters that exclude
or limit the benefit of the block exemption in certain circumstances and to
revoke or amend the block exemption in particular circumstances, subject to an
appropriate consultation and notice period
-
it should be possible for the ACCC to impose a time limit on the
operation of the block exemption, after which it may review and re-consider the
terms of the block exemption and issue a new one if the public
benefit/detriment test is met and
- the
ACCC should publicly consult and issue a draft document prior to issuing the
block exemption.[149]
The Harper Review recommended that a block exemption power,
exercisable by the ACCC, should be introduced and operate alongside the
authorisation and notification frameworks in Part VII of the CCA.[150]
Key
provisions
Item 22 of Schedule 9 to the Bill repeals Division
3 of Part VII of the CCA which provides for merger clearances and
authorisations. In addition, item 22 inserts proposed sections 95AA
and 95AB. Under proposed subsection 95AA(1) the ACCC may
issue class exemptions where it is satisfied that the relevant conduct satisfies
either the competition test or the welfare test.
The determination must specify the duration of the class
exemption—being no longer than ten years.[151]
Proposed section 95AB allows the ACCC to give a
notice to a person that advises that a class exemption does not cover
particular conduct engaged in by that person, if it considers that the
competition test and the welfare test are not satisfied by the specified
conduct of the person. While such a notice is in effect, the class exemption does
not apply to the conduct specified in the notice.[152]
Item 23 inserts proposed section 101B into
the CCA to allow a person who is dissatisfied with a decision of the ACCC
to issue a notice under proposed section 95AB to apply to the Australian
Competition Tribunal (the Tribunal). Existing section 102 sets out the
functions and powers of the Tribunal. Items 24–26 insert proposed
subsections 102(5AAA), (5AAB), (5ABA) and (5D)–(5G) into the CCA to provide
for the consequences of a determination by the Tribunal which either agrees or
disagrees with a person’s application for review of the ACCC decision under
section 95AB to issue a notice to a person.
Schedule
10—Admissions of fact
Commencement
The amendments in Schedule 10 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
About
evidence
Section 83 of the CCA is an evidentiary provision
which is designed to make it easier for individual applicants to prove their
case against a respondent against whom the ACCC or some other party has
successfully brought proceedings.[153]
The section achieves its purpose by providing that findings
of fact made against a respondent in earlier proceedings will be prima facie
evidence of those facts in later proceedings by any affected person for damages
or compensation orders. All that is needed to rely on the relevant facts is a
copy of the findings sealed by the court which made them.
Harper
Review consideration
The Harper Review noted that a significant potential
deficiency has emerged in respect of the scope of section 83. Many ACCC
proceedings are resolved by the corporate defendant making admissions of
fact(s) that establish the contravention, but it is uncertain whether section
83 applies to such admissions. A number of decisions of the Federal Court
suggest that section 83 is confined to findings of fact made by the court after
a contested hearing.[154]
The Harper Review recommended amending the CCA such
that admissions of fact made by the person against whom
proceedings are brought (under section 82 or in an application under subsection
51ADB(1) or 87(1A)) are treated analogously to findings of fact
made by the courts.[155]
The Harper Review acknowledged that submitters had expressed
concern about the impact that extending section 83 to admissions of fact might
have on the willingness of parties to co-operate in cartel matters or settle
matters with the ACCC—which could compromise the effectiveness of public
enforcement of the CCA:
The assumption underlying those concerns is that companies
may choose to settle a proceeding brought by the ACCC on the basis of
admissions of fact, believing that those admissions cannot be relied upon by a
private litigant seeking compensation in a follow-on proceeding. If the
admissions could be relied upon, it might change how respondent companies
assess the advantages of settlement.[156]
Despite these concerns, the Government supported the
recommendation.[157]
Key
provisions
Item 1 repeals and substitutes section 83 of the CCA
so that in addition to findings of fact, admissions
of fact by a person against whom proceedings are brought are to be treated as
evidence in any future proceedings.
Schedule
11—Power to obtain information, documents and evidence
Commencement
The amendments in Schedule 11 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
Harper
Review consideration
The ACCC is empowered under section 155 of the CCA to
compel individuals to appear before it to answer questions about a potential
contravention, and to compel corporations and individuals to provide
information and produce documents.
Some submitters to the Harper Review criticised the ACCC’s
use of its current section 155 powers, citing the scope of the notices and the
costs of compliance. On the other hand, ACCC proposed that its powers under
section 155 should be able to be used in a wider range of circumstances.[158]
The Harper Review opined that the current penalty regime
for failing to furnish information, documents or evidence to the ACCC was
inadequate when compared with similar penalties in relation to entities subject
to enforcement by the Australian Securities and Investments Commission, and
recommended their increase.[159]
Item 4 amends subsection 155(6A) of the CCA to substantially
increase the penalties for failure to comply with a notice to produce
information, documents or evidence under section 155. Currently, a failure to
provide information, documents or evidence is subject to a fine not exceeding
20 penalty units or imprisonment for 12 months.[160]
The amendment operates to increase the maximum fine to 100 penalty units and
increase the maximum term of imprisonment to two years.[161]
In seeking to strike an appropriate balance the Harper
Review recommended that the ACCC should be able to use section 155 powers to
investigate compliance with court-enforceable undertakings on the grounds that
this would assist in protecting the integrity of undertakings as part of the
broader compliance and enforcement framework.[162]
The Government supported the recommendation.[163]
Legal
burden of proof
As set out above, it is an offence to fail to comply with section
155 of the CCA. Item 3 of Schedule 11 will introduce a defence to
this offence, to provide that the offence of refusing or failing to comply with
a notice does not apply in relation to producing documents if the person proves
that, after a reasonable search, the person is not aware of the documents and
provides a written response to the notice. However, the person will bear the
legal burden of an element of this defence. The Scrutiny of Bills Committee
noted:
A legal burden of proof is proposed to be placed on the
defendant, ensuring that the defendant would need to prove, on the balance of
probabilities, that they were not aware of the documents and that they
undertook a reasonable search.
At common law, it is ordinarily the duty of the prosecution
to prove all elements of an offence. This is an important aspect of the right
to be presumed innocent until proven guilty. Provisions that reverse the burden
of proof and require a defendant to disprove one or more elements of an
offence, interferes with this common law right.[164]
The Scrutiny of Bills Committee considered that the
explanation for the amendment as set out in the Explanatory Memorandum was
inadequate and requested the Minister’s advice as to why the legal burden of
proof needed to be reversed.[165]
The Committee received further advice from the Treasurer,
and as a result, the Committee made no further comment on the matter, apart
from requesting that the advice be made part of the Explanatory Memorandum to
the Bill.[166]
Significant
penalties
The Scrutiny of Bills Committee expressed concern about
the proposed increase in the penalties under subsection 155(6A) of the CCA.
The Committee considered that the proposed level of
penalties may be at odds with the Guide to Framing Commonwealth Offences,[167]
as well as in relation to contraventions of similar information gathering
powers by various Commonwealth bodies.[168]
As a result, the Committee sought detailed advice from the Minister on the
applicable penalty for comparable Commonwealth offences, as well as the
justification for the proposed increase as contained in the Bill.[169]
The Treasurer advised that the rationale for the increase
in fines was based on the Harper Review’s comparison of the penalties available
under section 155 of the CCA with the fines for breaching information
gathering notices under the Australian Securities
and Investments Commission Act 2001. The Committee noted that the
Harper Review’s concerns related to a perceived inadequacy of the pecuniary
penalty relating to corporations only. That is, there appeared to be no concern
with the level of sanctions (including imprisonment) that are currently able to
be imposed on individuals. The Committee therefore decided that insufficient
information was provided and as a result it drew the increased to the length of
imprisonment to Senators’ attention.[170]
Right to
privacy
The Parliamentary Joint Committee on Human Rights Scrutiny
Report considered that—similarly to the Scrutiny of Bills Committee—the Harper
Review had only provided a rationale for an increase in penalty provisions in
relation to corporations, not individuals, under section 155 of the CCA.[171]
The Committee considered that the increased penalties for failure to produce
information or documents under section 155 engage and limit the right to
privacy.[172]
The Committee considered that the Government’s statement of compatibility[173]
did not address ‘whether the measure pursues a legitimate objective (that is,
addresses a pressing and substantial concern) and is rationally connected to
that objective’,[174]
and therefore requested advice from the Treasurer. At the time of writing, a
response had been received but not published.[175]
Key
provisions
Items 1 and 2 of Schedule 11 to the Bill amend subsection
155(1) of the CCA to maintain the existing circumstances under which the
ACCC can seek information, documents or evidence, as the case may be, and remove
references to provisions in Division 3 of Part VII which are proposed to be
repealed by Schedule 9 to the Bill. Item 2 also provides for the
ACCC to seek additional information, documents or evidence in relation to a
merger authorisation.[176]
Items 1 and 2 also provide for consequential
amendments to increase the scope of the ACCC’s information gathering powers by
the addition of proposed subparagraph 155(2)(a)(iii) which relates to
undertakings under section 87B of the CCA or under section 218 of the
Australian Consumer Law (ACL). The effect of this change is to permit the ACCC
to seek additional information, documents or evidence relating to a potential or
actual contravention of an undertaking. This is a new power for the ACCC and
arose as a result of a recommendation in the Harper Review.[177]
Currently subsection 155(5) provides that a person subject
to an information gathering notice shall not refuse or fail to comply with such
a notice, or provide false or misleading evidence. Subsection 155(6A) currently
provides that if a person contravenes subsection 155(5) they are guilty of an
offence. The Harper Review considered that the insertion of a ‘reasonable
search defence’ should adequately deal with concerns about complying with
section 155 notices in the digital age where much more information may be
stored (which has consequential costs for business compliance).[178]
Item 3 inserts proposed subsections 155(5B) and 155(6) into the CCA
so that a person who is required to furnish additional information, documents or
evidence may rely on a ‘reasonable search’ defence. A person who seeks to rely
on the defence bears the legal burden of proving that, after a reasonable
search, the person is not aware of the documents.
Schedule
12—Access to services
Commencement
Parts 1–3 of Schedule 12 commence at the same time as the
amendments in Schedule 1 to the Bill.
Divisions 1 and 2 of Part 4 of Schedule 12 contain duplicate
provisions with slightly different section numbering. Only one of these
Divisions will commence, depending on when Schedule 2 to the Public Governance
and Resources Legislation Amendment Act (No. 1) 2017 commences. As the whole
of the Public Governance and Resources Legislation Amendment Act (No. 1)
2017 commenced on 23 August 2017, Division 1 of Part 4 of Schedule 12 will
commence immediately after the amendments in Schedule 1 to the Bill and
Division 2 will not commence at all.
About the
national access regime
Schedule 12 to the Bill makes a number of amendments
to the national access regime (box 13), which is set out in Part IIIA of the CCA.
Contemporaneously with the Harper Review was a PC inquiry into the national
access regime.[179]
Both reports recommended changes to the national access regime.
Box 13: what is the national access regime?
The national access regime provides a mechanism for third
party access to essential or bottleneck infrastructure services. Gaining
access is generally a two-stage process:
- An application must be made to the National Competition Council (NCC)
which then recommends the declaration of the infrastructure services, and the
Minister accepts the NCC recommendation and declares the service. Declaration
can only be made where that declaration satisfies a number of criteria (see
below). If the service is declared, third parties may seek agreement with the
service provider for access to that service.
- In the event that the third party access seeker and the service
provider are unable to agree on the provision of access to the declared
service, either the access seeker or the provider may notify the ACCC that an
access dispute exists. The ACCC will then generally arbitrate the provision
of access to the declared service.
The declaration criteria, all of which must be satisfied,
are:
- that
access or increased access to the service would promote a material increase
in competition in at least one other market (whether or not in Australia)
(‘criterion (a)’)
- that
it would be uneconomical for anyone to develop another facility to provide
the service (‘criterion (b)’)
- that
the facility is nationally significant, having regard to its size, and its
importance to both constitutional trade and commerce and the national economy
(‘criterion (c)’)
- that
access to the service is not already subject to an effective state or
territory access regime (‘criterion (e)’)
- that
access or increased access to the service would not be contrary to the public
interest (‘criterion (f)’) (see subsections 44G(2) and 44H(4)).
Note that criterion (d) was previously repealed.
|
Source: Competition and Consumer Act 2010, subsections
44G(2), 44H(4).
The
Productivity Commission recommended approach
The PC report considered that the economic problem that
the national access regime is designed to target is: ‘... an enduring lack
of effective competition, due to natural monopoly, in markets for
infrastructure services where access is required for third parties to compete
effectively in dependent markets’.[180]
To that end, the report recommended the following changes to the declaration
criteria:
-
criterion (a) should test whether declaration of (instead of
access to) a service would promote competition
- criterion (b) should be used to identify facilities that give
rise to an enduring lack of effective competition in markets for infrastructure
services
-
criterion
(b) should be applied in a different manner than in the past by directing
decision makers to test whether a facility can meet total foreseeable market —including the demand for any substitute
services—at least cost
- the
assessment of costs under criterion (b) should be based on an estimate of
production costs that would be incurred in meeting total foreseeable market
demand for the infrastructure service, including costs from coordinating
multiple users of the infrastructure facility
- criterion
(e) should be removed and separately introduce in Part IIIA:
-
a
threshold clause stating that a service cannot be declared if it is subject to
a certified access regime
- a
revocation mechanism that allows certification of a regime to be revoked if
substantial modifications have been made to the regime or the principles in
clause 6 of the Competition Principles Agreement[181]
- criterion
(f) should be amended to:
-
establish
that declaration would promote the public interest, rather than be ‘not
contrary to the public interest’ (as is currently the case)
- require
a decision maker to have regard to the possible effects on investment, and any
administrative and compliance costs that would arise due to declaration
- Assess
the effect of the declaration of (instead of access to) a service.[182]
As an alternative formulation to criterion (b), the PC
recommended amending the definition of ‘anyone’ in paragraphs 44G(2)(b) and
44H(4)(b) so as to exclude the incumbent service provider.[183]
Harper
Review consideration
The Harper Review had the
benefit of relying on the PC inquiry as part of its review and framed its
discussion around the PC recommendations:
The Panel agrees with the PC’s proposed change to criterion
(a), but considers that criterion (a) sets too low a threshold for declaration.
The burdens of access regulation should not be imposed on the operations of a
facility unless access is expected to produce efficiency gains from competition
that are significant. This requires that competition be increased in a market
that is significant and that the increase in competition be substantial.
The Panel supports the PC’s alternative recommendation in
respect of criterion (b). The alternative recommendation maintains the current
language for criterion (b), while clarifying that duplication of the facility
by the owner of the existing facility is not a relevant consideration.
As recently interpreted by the High Court in the Pilbara rail
access case, criterion (b) asks a practical question whether it would be
economically feasible, in other words profitable, for another facility to be
developed — if it would, the facility is not a bottleneck. The Panel considers
that maintaining the ‘economically feasible’ test for criterion (b) will best
promote the competition policy objectives underpinning Part IIIA. Under that
test, access regulation will only be considered where there is a bottleneck
problem that needs to be addressed. Absent a bottleneck problem, competition
and economic efficiency will be advanced if market participants are free to
negotiate private arrangements concerning access.
The Panel considers that re-framing criterion (b) such that
it requires an evaluation of whether a facility is a natural monopoly suffers
from a number of shortcomings. These include that it can be trivially satisfied
in the case of facilities that have been built with spare capacity and that it
requires the decision-maker to evaluate least cost solutions in complex
industries, burdened by information asymmetries where the risk of error is
high.
The Panel supports the PC’s recommendations in relation to
criterion (f).
Decisions to declare a service under Part IIIA, or determine
terms and conditions of access, are very significant economic decisions where
the costs of making a wrong decision are likely to be high. The Panel favours
empowering the Australian Competition Tribunal to undertake a merits review of
access decisions, including hearing directly from employees of the business
concerned and relevant experts where that would assist, while maintaining
suitable statutory time limits for the review process.[184]
To that end, the Harper Review recommendation adopted the PC’s
recommended approach for criterion (a) whilst adding that declaration should
promote a substantial increase in competition in a dependent market that is
nationally significant. The Review recommended adoption of the alternate PC
formulation for criterion (b), namely that ‘anyone’ should exclude the
incumbent service provider. The Review agreed with the PC’s recommendation that
criterion (f) should be reformulated so as to place a positive public interest
onus on access seekers.[185]
Neither the PC nor the Harper Review considered that criterion (c) required
amendment.
Government
response
The Government announced that it would adopt all of the
recommendations of the PC report, including on criteria (a) and (b) which
differed from the recommendations of the Harper Review.[186]
The Government response also noted its support for the Competition Principles
that were enunciated in the Harper Review, which for the purposes of Part IIIA
of the CCA, meant being satisfied that ‘granting third party access to
significant bottleneck infrastructure ... would promote a material increase in
competition in dependent markets and promote the public interest’.[187]
Retrospective
commencement
The Scrutiny of Bills Committee expressed reservations
over the retrospective application of Part 2 of Schedule 12 of the Bill.
As set out above, Schedule 12 provides for a range of amendments to the
national access regime, which governs third party access to nationally
significant infrastructure. Part 2 proposes to grant the Minister the
power to revoke an existing state or territory effective access regime. Item
37 provides that Part 2 applies in relation to decisions of the
Minister regarding state or territory effective access regimes made on or after
1 January 2017.
The Committee Report provided:
The committee has a long-standing scrutiny concern about
provisions that have the effect of applying retrospectively, as it challenges a
basic value of the rule of law that, in general, laws should only operate
prospectively (not retrospectively). The committee has a particular concern if
the legislation will, or might, have a detrimental effect on individuals.
Generally, where proposed legislation will have a
retrospective effect the committee expects the explanatory materials should set
out the reasons why retrospectivity is sought, and whether any persons are
likely to be adversely affected and the extent to which their interests are
likely to be affected.[188]
As a result, the Committee sought Ministerial advice as to
why 1 January 2017 was chosen as the commencement date, and also whether the
retrospective application may cause disadvantage to any individual, and if so,
the justification for doing so.[189]
The Treasurer provided a response to the Committee. The
Committee noted that ‘... the Treasurer’s advice did not address the committee’s
request for advice as to whether this retrospective application may cause
disadvantage to any person’, and as a result drew the retrospectivity to
Senators’ attention.[190]
Key provisions
Items 1 and 2 of Schedule 12 to the Bill introduce
a definition of declaration criteria in proposed section 44CA.
The declaration criteria reflect the Government’s adoption of the
PC’s recommendations, combined with the adoption of the Harper Review
recommendation on Competition Principles. To that end:
- existing criterion (a) is reformulated as proposed paragraph
44CA(1)(a)
-
existing criterion (b) is reformulated as proposed
paragraph 44CA(1)(b)
- existing criterion (c) is unchanged and is as proposed
paragraph 44CA(1)(c)
- existing criterion (f) is reformulated as proposed
paragraph 44CA(1)(d).
Proposed subsection 44CA(2) extends proposed
paragraph 44CA(1)(b) to also take into account whether the facility is
at capacity, and if so, if it is reasonably possible to expand that capacity—to
have regard to the facility as if it had such additional capacity. This
reflects the PC’s recommendation that criterion (b) should also reflect future
demand, as well as the costs involved in providing that additional capacity,
including the costs associated with declaration.
In determining whether criterion (f) is satisfied, proposed
subsection 44CA(3) provides that the National Competition Council (NCC) and
the Minister must have regard to the effect that declaration would have on
investment in infrastructure services, and investment in dependent markets, as
well as administrative and compliance costs.
Items 3 and 4 amend section 44D to clarify that if
a service provider is a state or territory body, that body needs to be in a
position to exercise some control over the access conditions to the facility in
question in order for the relevant state or territory Minister to be the
Minister responsible for declaring a service (or deciding that the service is
ineligible to be declared), rather than the Commonwealth Minister.
Items 5–11, 13–15 and 17 make minor consequential
amendments as a result of items 1 and 2. Sections 44G and 44H are
simplified to recognise the introduction of a definition of declaration
criteria as proposed section 44CA. The relevant criteria
other than the declaration criteria are moved to proposed
subsection 44F(1). Proposed subsection 44F(1A) provides
that in the event that one or more of the criteria under subsection 44F(1)
apply, the NCC is to provide reasons to the applicant explaining why those
provisions apply and that an application for declaration can therefore not be
made in relation to that service.
Item 12 reverses the current presumption that if
the designated Minister does not publish a decision on the declaration
recommendation within 60 days then the Minister is deemed to have decided not
to declare the service. Proposed subsection 44H(9) of the CCA now
effectively places a positive onus on the designated Minister to make a
decision on the declaration recommendation. In the event that no decision is
made within 60 days, proposed subsection 44H(9) deems that the
designated Minister has declared the service. The reversal may help to improve
the transparency of declaration decision making.
Items 20–37 implement the PC’s recommendations
relating to criterion (e) on effective state or territory access regimes. Proposed
Subdivision CA of Division 2A of Part IIIA is inserted to provide for the
revocation of the Commonwealth Minister’s decision made under section 44N. Section
44N relates to a decision about whether a state or territory access regime is
an effective access regime for the purposes of Part IIIA of the CCA. Proposed
section 44NBA provides that the NCC, may of its own volition, or must on application,
consider whether to recommend that the Commonwealth Minister revoke the
decision that a state or territory access regime is an effective access regime
for the purposes of Part IIIA. In so doing, the NCC may request information (proposed
section 44NBB). Upon receiving a recommendation from the NCC, the
Commonwealth Minister must decide whether or not to revoke the decision (proposed
section 44NBC). Items 21–36 make minor consequential changes as
a result of the insertion of proposed Subdivision CA, proposed by item
20.
Items 38–41 reflect recommendations from the PC
about what can be determined by the ACCC as part of arbitration, once access to
a service has been declared and the access seeker and access provider are
unable to agree.[191]
Principally, those recommendations related to the ACCC’s ability to require the
service provider to expand their facility, including capacity and/or its
geographical reach, and the burden of costs of such an expansion. To that end, proposed
subsection 44V(2A) (item 38) provides that the ACCC may make a
determination that requires the service provider to either extend the capacity
of the facility, or require the provider to expand the geographical reach of
the facility, or both. Items 39–41 make minor consequential
amendments as a result of item 38.
The amendments proposed in Part 4 of Schedule 12 relate
to annual reporting requirements of the NCC, and make consequential amendments
to section 29O as a result of the amendments relating to Part IIIA outlined
above. As set out above, Divisions 1 and 2 of Part 4 are alternative
provisions, the commencement of which is dependent on the commencement of
Schedule 2 to the Public Governance and Resources Legislation Amendment Act
(No. 1) 2017. As that Schedule has commenced, Division 1 of Part 4 of
Schedule 12 will commence immediately after the amendments in Schedule 1 to the
Bill and Division 2 will not commence at all.
Schedule
13—Application and transitional provisions
Commencement
The amendments in Schedule 13 to the Bill commence at the
same time as the amendments in Schedule 1 to the Bill.
Key
provisions
Schedule 13 to the Bill provides for application
and transitional provisions. Proposed section 180 provides for
definitions of amended Act, amending Act, and commencement
time. The commencement time is the time that Schedule
1 to the Bill commences. As explained above, the provisions in Schedule 1
to the Bill are contingent on the Competition and
Consumer Amendment (Misuse of Market Power) Act 2017 receiving the
Royal Assent. That Act received Royal Assent on 23 August 2017. As a result,
the provisions of Schedule commence on the earlier of a proclaimed date and six
months after Royal Assent.
Proposed sections 181–185 provide the
commencement or transitional arrangements for:
- the new definition of competition
- orders under section 87 made before, and still in effect at, commencement
time
- authorisations under section 88 in force at commencement
- ACCC objection notices under section 93 in force at commencement
-
merger clearances and merger authorisations.
Schedule
14—Other amendments
Commencement
The amendments in Schedule 14 to the Bill commence on the
day after Royal Assent.
Harper
Review considerations
The Harper Review considered that there were a number of
deficiencies in requiring Ministerial consent to seeking the extraterritorial
application of specified provisions of the CCA:
The requirement for ministerial consent imposes a material
hurdle for private plaintiffs seeking redress for breaches of competition law
and can give rise to substantial additional costs in the litigation. The
ministerial consideration of the issue also takes time. Further, a defendant to
a proceeding can seek judicial review of the Minister’s decision, which may
cause delay in the principal proceeding ...
The Panel considers that, today, there is a very low
likelihood that Australian competition law proceedings involving overseas
conduct would create diplomatic concerns. Accordingly, it considers that there
is no ongoing need for the requirement for ministerial consent. Removing that requirement
would reduce the costs of such actions where consent would currently be
required.[192]
Item 1 removes the requirement for Ministerial
consent in relation to a range of proceedings which involve an extended
application of the CCA to conduct outside of Australia.
Items 3–7 extend the jurisdiction of state and territory
courts to hear actions under the CCA in relation to Part 3–1 of
Schedule 2 to the CCA. Schedule 2 deals with the Australian Consumer Law
(ACL) and Part 3–1 relates to unfair practices. Items 3–7 also extend
jurisdiction of state and territory courts to hear actions under Part 3–5 of
Schedule 2 of the CCA, which relates to liability of manufacturers for
goods with safety defects.
Items 9 and 10 remove redundant provisions relating
to a requirement for the ACCC to keep a register containing records of
proceedings at conferences for product safety bans.
Item 11 extends the exceptions to the
confidentiality of notices given under Division 5 of Part 3-3 the ACL in
relation to consumer goods, or product related services associated with death
or serious injury or illness. Suppliers are under an obligation to report to
the Commonwealth Minister, within two working days of becoming aware, that a
good or product related service has been associated with death or serious
injury or illness. Section 132A provides for such notices to remain
confidential, subject to exceptions. Item 11 extends the exceptions to allow
disclosure of information to: any other agency within the meaning of the Freedom
of Information Act 1982; the Director of Public Prosecutions; a state or territory
government body (within the meaning of section 151AAA of the CCA); and a
foreign government body (within the meaning of the CCA).
Items 12 and 13 remove a drafting error relating to
cartel offences.
Items 18 and 19 clarify that the cooling-off period
under an unsolicited consumer agreement concludes at the end of the 10th
business day after the agreement was reached. It is currently possible to
interpret that traders can enter into an unsolicited consumer agreement and
accept or require payment before the end of the cooling‑off period. Items
14–17 and 20–22 make minor consequential amendments as a result of items
18 and 19.
Item 23 corrects a drafting omission where the
previous equivalent provision in the Trade Practices Act 1974 applied to
persons, but subsection 131(2) does not. Item 23 provides that section
33 of Schedule 2 of the CCA applies as a law of the Commonwealth to, and
in relation to, the conduct of any person.
Item 25 provides the ACCC with the power to apply
to a court for an order directing a person who is subject to a section 155
notice (see above) to comply with the notice. This amendment is in addition to
the amendment in Schedule 11, item 4 to the Bill which provides for a
fivefold increase in the pecuniary penalty (that is, a fine) and a doubling of
the length of imprisonment in the event that a person subject to a section 155
notice refuses or fails to comply with such notice.
Item 27 is an application provision relating to the
amendments proposed by items 11 and 14–22 above in relation to the ACL.
[1]. Competition
Policy Review Panel, Competition
policy review: final report, (Harper Review: Final Report), Treasury,
Canberra, March 2015; Australian Government, Australian
government response to the Competition Policy Review, op. cit.
[2]. F
Hilmer, M Rayner, G Taperall, National
competition policy review, (Hilmer Review), Australian Government
Publishing Service, Canberra, August 1993.
[3]. Ibid.,
p. xvii.
[4]. Productivity Commission (PC), Review
of National Competition Policy reforms, Inquiry report, 33, PC,
Canberra, 28 February 2005, p. xv.
[5]. D
Dawson, J Segal, C Rendall, Review
of the competition provisions of the Trade Practices Act, (Dawson
Review), January 2003, Canberra.
[6]. Ibid.,
chapter 1, p. 30.
[7]. Liberal
Party of Australia and the Nationals, Our
plan: real solutions for all Australians, Coalition policy document,
Election 2013, January 2013, p. 23.
[8]. T
Abbott (Prime Minister) and B Billson (Minister for Small Business), Review
of competition policy, media release, 4 December 2013.
[9]. B
Billson (Minister for Small Business), Government
releases details for competition review, media release, 11 December
2013.
[10]. B
Billson (Minister for Small Business), Government
names competition review panel, media release, 27 March 2014.
[11]. Ibid.,
p. 3.
[12]. Competition
Policy Review, Competition
policy review: issues paper , Treasury, Canberra, 14 April 2014.
[13]. Competition
Policy Review Panel, Competition
policy review: draft report , (Harper Review: Draft Report), Treasury,
Canberra, September 2014.
[14]. Harper
Review: Final Report, op. cit.
[15]. Ibid.,
p. 307.
[16]. Ibid.
[17]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit.
[18]. B
Joyce (Deputy Prime Minister and Minister for Agriculture and Water Resources),
“Effects
test” a win for farmers and small business, media release, 16
March 2016. Legislative changes to the misuse of market power provisions were
introduced by the Competition
and Consumer Amendment (Misuse of Market Power) Act 2017.
[19]. For
a discussion of the Government’s decisions on the Harper Review recommendations,
see: P Davidson, Government
response to the Harper Competition Policy Review: a quick guide, Research
paper series, 2016–17, Parliamentary Library, Canberra, 2016.
[20]. The
Treasury, ‘Competition
law amendments: exposure draft consultation’, The Treasury website, 5
September 2016.
[21]. Harper
Review: Draft Report, op. cit., p. 39.
[22]. Harper
Review: Final Report, op. cit., p. 56.
[23]. Harper
Review: Draft Report, op. cit., p. 41.
[24]. Harper
Review: Final Report, op. cit., p. 59.
[25]. Harper
Review: Draft Report, op. cit., p. 46.
[26]. Harper
Review: Final Report, op. cit. p. 64.
[27]. Ibid.,
p. 51.
[28]. Ibid.,
p. 54.
[29]. Ibid.,
recommendations 55 and 56, p. 91.
[30]. Originally
introduced as the Competition and Consumer Amendment (Misuse of Market Power)
Bill 2016, the Bill was passed as the Competition and
Consumer Amendment (Misuse of Market Power) Act 2017.
[31]. Senate
Selection of Bills Committee, Report,
5, 2017, The Senate, 11 May 2017.
[32]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 5, 2017, The Senate, 10 May 2017, pp. 12–17.
[33]. J
Kelly, ‘Market
power law worse than N Korea’s: Fels’, The Australian, 26 November
2015, p. 4.
[34]. C
Heaney, ‘Shopper
front queue: consumers set to win in competition shake-up’, Herald Sun,
26 November 2015, p. 54.
[35]. J
Westacott, ‘Consumer
choice at heart of review’, Weekend Australian, 28 November 2015, p.
33.
[36]. Explanatory
Memorandum, Competition and Consumer Amendment (Competition Policy Review)
Bill 2017, pp. 4–12, 142.
[37]. The
Statement of Compatibility with Human Rights can be found at pages 145–165 of
the Explanatory
Memorandum to the Bill.
[38]. Parliamentary
Joint Committee on Human Rights, Report,
6, 2017, Parliament of Australia, Canberra, 20 June 2017, pp. 2–7.
[39]. Harper
Review: Final Report, op. cit., p. 317.
[40]. Note
that items 2 and 7 of Schedule 3 to the Bill make separate amendments to
the definition of competition for the purposes of section 45 of
the CCA.
[41]. Harper
Review: Final Report, op. cit., p. 317.
[42]. Ibid.,
p. 316.
[43]. For
instance, section 45 deals with contracts, arrangements and understandings
affecting competition and section 47 deals with exclusive dealing conduct which
substantially lessens competition.
[44]. Australian
Competition and Consumer Commission (ACCC), Submission
to the Competition Policy Review Panel, Competition policy review: response
to the draft report, 26 November 2014, pp. 33–34.
[45]. Part
IV is mirrored in the Competition Code in Schedule 1 of the CCA, which
applies anti-competitive laws through application legislation in the states and
territories. Therefore, although the discussion which follows refers to the
provisions of Part IV, it equally applies to Part 1 of Schedule 1.
[46]. Harper
Review: Final Report, op. cit., p. 359.
[47]. Ibid.,
p. 360.
[48]. Harper
Review: Final Report, ‘Appendix A: Competition and Consumer Act 2010: model
legislative provisions’, pp. 504–506. See: Organisation for Economic
Co-operation and Development (OECD), Recommendation
of the Council concerning effective action against hard core cartels, C(98)35/FINAL,
OECD, Paris, 25 March 1998.
[49]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., p. 23.
[50]. Competition
and Consumer Amendment (Competition Policy Review) Bill 2016: Exposure Draft.
[51]. For
a useful discussion surrounding the complexity of the current provisions, see:
C Beaton-Wells and B Fisse, Australian
cartel regulation, Cambridge
University Press, Melbourne, 2011.
[52]. CCA,
subsection 44ZZRD(1).
[53]. Items
1, 9 and 10 make consequential amendments to reflect the insertion of proposed
subparagraph 44ZZRD(3)(a)(iv) into the CCA.
[54]. Harper
Review: Final Report, op. cit., p. 361.
[55]. Ibid.,
p. 361 and Chapter 18.
[56]. Ibid.,
p. 361. Norcast S.ár.L v
Bradken Limited (No 2) (2013) 302 ALR 486, [2013] FCA 235.
[57]. Harper
Review: Final Report, op. cit., p. 367.
[58]. Norcast
S.ár.L v Bradken Limited (No 2),
op. cit., [2013]
FCA 235, [231] (Gordon J).
[59]. Subsections 5(3) and 5(4) of the CCA
operate to prevent private citizens from claiming damages or seeking other
remedial orders without the written consent of the Minister. This requirement
is qualified by subsection 5(5) of the CCA which provides that the
Minister is to give consent unless he, or she, is of the opinion that the law
of the country in which the relevant conduct was engaged in required, or
specifically authorised, the engaging in of the conduct and it is not in the
national interest that the consent be given. Subsections 5(3)–(5) are set to be
repealed by item 1 of Schedule 14 to the Bill.
[60]. Harper
Review: Final Report, op. cit., p. 367.
[61]. Norcast
S.ár.L v Bradken Limited (No 2),
op. cit., [2013]
FCA 235, [14], [259] (Gordon J).
[62]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., p. 23.
[63]. Competition
and Consumer Amendment (Competition Policy Review) Bill 2016: Exposure Draft,
item 2 in Part 1 of Schedule 2.
[64]. Exposure
Draft Explanatory Materials, Competition and Consumer Amendment
(Competition Policy Review) Bill 2016: Exposure Draft, p. 12. For a discussion
of how ‘likely’ has been interpreted by the courts in relation to Part IV of
the CCA, see: P Davidson, Competition
and Consumer Amendment (Misuse of Market Power) Bill 2016, Bills digest,
87, 2016–17, Parliamentary Library, Canberra, 2017, pp. 14–15.
[65]. Section
4J of the CCA defines a joint venture for the purposes of that Act as
follows: (a) a reference to a joint venture is a reference to an activity in
trade or commerce that is carried on jointly by two or more persons, whether or
not in partnership; or carried on by a body corporate formed by two or more
persons for the purpose of enabling those persons to carry on that activity
jointly by means of their joint control, or by means of their ownership of
shares in the capital, of that body corporate; and (b) a reference to a
contract or arrangement made or understanding arrived at, or to a proposed
contract or arrangement to be made or proposed understanding to be arrived at,
for the purposes of a joint venture shall, in relation to a joint venture by
way of an activity carried on by a body corporate, be read as including a
reference to the memorandum and articles of association, rules or other
document that constitute or constitutes, or are or is to constitute, that body
corporate.
[66]. Harper
Review: Final Report, op. cit., p. 363.
[67]. For
a discussion on the substantially lessening competition test, see: P Davidson, Competition
and Consumer Amendment (Misuse of Market Power) Bill 2016, Bills digest,
op. cit., p. 17.
[68]. Item
15 of Part 1 in Schedule 2 to the Bill repeals and replaces the note to
subsection 44ZZRO(1) to specify that the defendant bears a legal burden in
relation to the matter in this section.
[69]. Criminal Code Act
1995, section 13.3(6) and definition of ‘evidential burden’ at
section 44ZRB of the CCA.
[70]. Ibid.,
section 13.5.
[71]. Item
8 of Schedule 5 of the Bill repeals section 44ZZRQ.
[72]. Competition and
Consumer Amendment Act (No. 1) 2011, section 2.
[73]. P
Pyburne, Competition
and Consumer Amendment Bill (No. 1) 2011, Bills digest 138, 2010–11,
Parliamentary Library, Canberra, 2011.
[74]. Competition and
Consumer Regulations 2010, regulation 48.
[75]. Harper
Review: Final Report, op. cit., p. 367.
[76]. Ibid.,
p. 369.
[77]. Ibid.,
p. 370.
[78]. Ibid.,
p. 372.
[79]. Ibid.,
p. 370.
[80]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., p. 24.
[81]. Harper
Review: Final Report, op. cit., pp. 370–1.
[82]. Section
4D of the CCA operates so that a provision of a contract, arrangement or
understanding, will be taken to be an exclusionary provision for
the purposes of the Act if: (a) the contract or arrangement was made, or the
understanding was arrived at between persons any two or more of whom are
competitive with each other and (b) the provision has the purpose of
preventing, restricting or limiting the supply of goods or services to, or the
acquisition of goods or services from, particular persons or classes of
persons; or the supply of goods or services to, or the acquisition of goods or
services from, particular persons or classes of persons in particular
circumstances or on particular conditions by all or any of the parties to the
contract, arrangement or understanding. The section is repealed by item 1
of Schedule 4 to the Bill.
[83]. Harper
Review: Final Report, op. cit., p. 311.
[84]. Explanatory
Memorandum, Competition and Consumer Amendment (Competition Policy Review)
Bill 2017, p. 28.
[85]. Item
21 repeals subsection 51(4) which deals with repealed subsection 45(1)
relating to contracts entered into prior to the commencement of the Trade
Practices Amendment Act 1977—which is repealed by item 2; as well as
in relation to subsection 45B(1) which deals with covenants affecting
competition. Covenants under section 45B are to be repealed as a result of item
10 of Schedule 5 to the Bill (and item 20 in relation to Schedule 1
of the CCA).
[86]. Subsections
45(5)–(8A) of the CCA are known as ‘anti-overlap’ provisions.
[87]. Subsection
45(6) of the CCA relates to the making of a contract, arrangement, or
understanding.
[88]. Explanatory
Memorandum, Competition and Consumer Amendment (Competition Policy Review)
Bill 2017, p. 32.
[89]. Section
45D of the CCA relates to secondary boycotts for the purpose of causing
substantial loss or damage.
[90]. Section
45DA of the CCA relates to secondary boycotts for the purpose of causing
substantial lessening of competition.
[91]. Section
45DB of the CCA relates to boycotts affecting trade or commerce.
[92]. Section
45E of the CCA relates to the prohibition of contracts, arrangements or
understandings affecting the supply or acquisition of goods and services.
[93]. Section
45EA of the CCA states that provisions contravening section 45E are not
to be given effect.
[94]. Section
48 of the CCA relates to resale price maintenance.
[95]. RV
Miller, Miller’s Australian competition and consumer law annotated, 39th
edn, Thomson Reuters, Sydney, 2017, p. 109.
[96]. Harper
Review: Final Report, op. cit., p. 361.
[97]. Ibid.,
pp. 308, 311.
[98]. Trade Practices
Amendment Act 1977.
[99]. Trade
Practices Act Review Committee, Report
to the Minister for Business and Consumer Affairs, (Swanson report),
Parl. Paper No. 228/1976, The Government Printer of Australia, Canberra, August
1976, p. 6.
[100]. Harper
Review: Final Report, op. cit., p. 68.
[101]. Ibid.,
p. 391.
[102]. Ibid., recommendation
36, p. 68.
[103]. Parliamentary
Joint Committee on Human Rights, Report,
6, op. cit., pp. 6–7.
[104]. The
Statement of Compatibility with Human Rights can be found at pages 145–165 of
the Explanatory
Memorandum to the Bill.
[105]. Ibid.
[106]. Parliamentary
Joint Committee on Human Rights, ‘Correspondence
register’, Australian Parliament website, Table 2: recent correspondence
received.
[107]. Parliamentary
Joint Committee on Human Rights, Report,
6, op. cit., p. 7.
[108]. Ibid.
[109]. Parliamentary
Joint Committee on Human Rights, ‘Correspondence
register’, op. cit., table 2.
[110]. Ibid.,
p. 63.
[111]. CCA,
subsection 47(2).
[112]. Ibid.,
subsection 47(2).
[113]. Ibid.,
subsection 47(6).
[114]. Ibid.,
subsection 47(4).
[115]. Ibid.,
subsection 47(3).
[116]. Ibid.,
subsection 47(3).
[117]. Ibid.,
subsection 47(7).
[118]. Ibid.,
subsection 47(5).
[119]. Ibid.,
section 75B.
[120]. Harper
Review: Final Report, op. cit., p. 376.
[121]. Ibid.
[122]. Ibid.,
p. 377.
[123]. Ibid.,
pp. 377–378.
[124]. Ibid.,
p. 379.
[125]. Notification
is also available for the forcing provisions in section 47 via section 47(10A)
of the CCA, but that section is set to be repealed by item 4 of Schedule
7 to the Bill.
[126]. ACCC,
‘Authorisation’,
ACCC website.
[127]. ACCC,
‘Notifications’,
ACCC website.
[128]. Harper
Review: Final Report, op. cit., pp. 398–399.
[129]. Ibid.,
pp. 403–405.
[130]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., p. 30.
[131]. Ibid.,
p. 31.
[132]. CCA,
subsection 88(6).
[133]. Explanatory
Memorandum, Competition and Consumer Amendment (Competition Policy Review)
Bill 2017, p. 61.
[134]. Ibid.,
subsection 87B(1).
[135]. Ibid.,
subsection 87B(2).
[136]. Harper
Review: Final Report, op. cit., p. 398 referring to ACCC, Submission
to the Competition Policy Review Panel, op. cit., pp. 65–66.
[137]. CCA,
subsections 90(8A) and 90(8B).
[138]. CCA,
subsection 90(9).
[139]. CCA,
section 101A.
[140]. Harper
Review: Final Report, op. cit., p. 400.
[141]. Ibid.,
p. 402.
[142]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., pp.
41–42.
[143]. As
discussed above, the purpose condition will be satisfied if the provision has
the purpose of directly or indirectly preventing, restricting or limiting
production, capacity to supply or supply of goods and services.
[144]. CCA,
proposed subsection 93AG(2).
[145]. CCA,
proposed subsection 93AG(4).
[146]. CCA,
proposed subsections 93AG(6) and (7).
[147]. Harper
Review: Final Report, op. cit., p. 403.
[148]. Ibid.
[149]. ACCC,
Submission
to the Competition Policy Review Panel, op. cit., p. 68.
[150]. Harper
Review: Final Report, op. cit., p. 405.
[151]. CCA,
proposed subsection 95AA(3).
[152]. CCA,
proposed subsection 95AB(3).
[153]. Miller,
Miller’s Australian Competition and Consumer Law Annotated, op. cit., p.
689.
[154]. Harper
Review: Final Report, op. cit., p. 408. See ACCC v Apollo Optical
(Australia) Pty Ltd [2001] FCA
1456; ACCC v ABB Transmission and Distribution Limited (No. 2) [2002] FCA 588;
and ACCC v Leahy Petroleum Pty Ltd (No. 3) [2005] FCA 265.
[155]. Harper
Review: Final Report, op. cit., p. 408.
[156]. Ibid.
[157]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., p. 32.
[158]. Harper
Review: Final Report, op. cit., p. 418.
[159]. Ibid.,
pp. 419–421.
[160]. Under
section 4AA of the Crimes Act 1914 a penalty unit is equivalent to $210.
This means that the maximum penalty payable by a person is $4,200. Under
subsection 4B(3) of the Crimes Act, the maximum amount payable by a corporation
is five times that amount, being $21,000.
[161]. The
maximum penalty payable by a person is equivalent to $21,000. The maximum
penalty payable by a corporation is $105,000.
[162]. Harper
Review: Final Report, op. cit., p. 419.
[163]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., p. 32.
[164]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 6, 2017, op. cit., p. 90.
[165]. Ibid.,
p. 91.
[166]. Ibid.,
p. 91–94.
[167]. The
penalty for failure to comply with notice to produce or attend provisions
should generally be six months imprisonment and/or a fine of 30 penalty units:
Attorney-General’s Department (AGD), A
guide to framing Commonwealth offences, infringement notices and enforcement
powers, AGD, Canberra, September 2011, pp. 89 and 93.
[168]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, op.
cit., p. 95.
[169]. Ibid.,
p. 96.
[170]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, op.
cit., pp. 94–98.
[171]. Parliamentary
Joint Committee on Human Rights, Report, 6, op. cit., pp. 3–4.
[172]. Ibid.,
p. 5.
[173]. The
Statement of Compatibility with Human Rights can be found at pages 145–165 of
the Explanatory
Memorandum to the Bill.
[174]. Parliamentary
Joint Committee on Human Rights, Report, 6, op. cit., p. 5.
[175]. Parliamentary
Joint Committee on Human Rights, ‘Correspondence
register’, op. cit., Table 2.
[176]. CCA,
proposed subparagraph 155(2)(b)(iii).
[177]. Harper
Review: Final Report, op. cit., p. 421.
[178]. Ibid.,
pp. 418–421.
[179]. PC,
National access regime,
Inquiry report, 66, PC, Canberra, 25 October 2013.
[180]. Ibid.,
p. 145.
[181]. Council
of Australian Governments, Competition
Principles Agreement, 11 April 1995 as amended to 13 April 2007.
[182]. PC,
National access regime, op. cit., pp. 31, 145.
[183]. Ibid.,
p. 251.
[184]. Harper
Review: Final Report, op. cit., pp. 73–74.
[185]. Ibid.,
p. 440.
[186]. Australian
Government, Australian
government response to the Competition Policy Review, op. cit., pp.
33–34.
[187]. Ibid.,
pp. 3, 34.
[188]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny digest, 5, op.
cit., p. 16.
[189]. Ibid.,
pp. 16–17.
[190]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny digest, 6, op. cit.,
pp. 98–99.
[191]. PC,
National access regime, op. cit., pp. 34–35.
[192]. Harper
Review: Final Report, op. cit., p. 415.
For copyright reasons some linked items are only available to members of Parliament.
© Commonwealth of Australia
Creative Commons
With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.
In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.
To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.
Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.
Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.
Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Enquiry Point for referral.