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2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
COMPETITION AND CONSUMER AMENDMENT (COMPETITION POLICY
REVIEW) BILL 2017
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Treasurer, the Hon Scott Morrison MP)
Table of contents
Glossary ................................................................................................. 1
General outline and financial impact....................................................... 3
Chapter 1 Definition of competition ...............................................13
Chapter 2 Cartels ..........................................................................17
Chapter 3 Price signalling and concerted practices ......................25
Chapter 4 Exclusionary provisions ................................................37
Chapter 5 Covenants affecting competition ..................................41
Chapter 6 Secondary boycotts ......................................................43
Chapter 7 Third line forcing...........................................................45
Chapter 8 Resale price maintenance ............................................49
Chapter 9 Authorisations, notifications and class
exemptions ..................................................................55
Chapter 10 Admissions of fact ........................................................81
Chapter 11 Power to obtain information, documents and
evidence ......................................................................85
Chapter 12 Access to services .......................................................93
Chapter 13 Application and transitional provisions .......................113
Chapter 14 Other amendments ....................................................119
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Chapter 15 Regulation impact statement ......................................129
Chapter 16 Statement of Compatibility with Human Rights ..........145
Index....................................................................................................167
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
Act Competition and Consumer Act 2010
ACL The Australian Consumer Law (Schedule 2
to the Competition and Consumer Act 2010)
Commission Australian Competition and Consumer
Commission
Council National Competition Council
Final Report Final Report of the Competition Policy
Review (March 2015)
Harper Review Competition Policy Review
ICCPR International Covenant on Civil and Political
Rights
ICESCR International Covenant on Economic, Social
and Cultural Rights
PC Productivity Commission
Price signalling Anti-competitive disclosure of pricing and
other information
Regime National Access Regime
Review Panel The Competition Policy Review Panel
chaired by Professor Ian Harper
RIS Regulation Impact Statement
RPM Resale Price Maintenance
Tribunal Australian Competition Tribunal
TPA Trade Practices Act 1974
1
General outline and financial impact
Overview
The Competition Policy Review
In 2014, the Government commissioned a 'root and branch' review of
Australia's competition laws and policy to ensure Australia continues to
experience long-term productivity growth.
The Competition Policy Review (Harper Review) was led by a Review
Panel chaired by Professor Ian Harper and supported by a secretariat. The
terms of reference, issued on 27 March 2014, set out that the Review
Panel was to ensure thorough engagement with all interested stakeholders.
The terms of reference further set out that the key areas of focus would be
to identify impediments across the economy that restrict competition and
reduce productivity, which are not in the broader public interest.
The Review Panel released an Issues Paper on 14 April 2014 and a Draft
Report on 22 September 2014. The Review Panel received almost 350
submissions in response to the Issues Paper and around 600 submissions
to the Draft Report.
The Review's Final Report, released on 31 March 2015, contained 56
recommendations on competition policy, law and institutions. The Harper
Review concluded that while the concepts, prohibitions and structure of
the Competition and Consumer Act 2010 (the Act) are sound, some
provisions are unnecessarily complex, imposing costs on the economy and
burdens on business, as well as inhibiting the adaptability of the laws to
changing circumstances.
The Government received 140 submissions in response to the Final
Report.
The Government released its response to the Harper Review on
24 November 2015, and supports 40 of the recommendations in full or in
principle and a further 5 recommendations in part. The Government also
noted or remained open to the remaining 11 recommendations, subject to
further review and consultation.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Exposure Draft
An Exposure Draft of this Bill was released for public consultation from
5 September 2016 to 28 October 2016. A total of 61 written submissions
were received, of which 5 were confidential.1
Definition of competition
Schedule 1 to this Bill amends the definition of 'competition' in section 4
of the Act, to clarify that competition includes competition from goods
and services that are capable of importation, in addition to those actually
imported.
Date of effect: Schedule 1 does not commence at all unless the
Competition and Consumer Amendment (Misuse of Market Power) Act
2017 receives Royal Assent. If that Act receives Royal Assent, Schedule 1
commences from a day to be fixed by Proclamation. If no earlier day is
fixed by Proclamation, Schedule 1 commences the day after 6 months
from the day this Act or the Competition and Consumer Amendment
(Misuse of Market Power) Act 2017 receives Royal Assent (whichever is
later).
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule does not raise any human
rights issue. See Statement of Compatibility with Human Rights --
Chapter 16.
Compliance cost impact: Nil compliance cost impact.
Cartels
Schedule 2 to this Bill makes a number of amendments to the Act to
simplify the provisions on cartel conduct and better target
anti-competitive conduct, including:
1
Non-confidential submissions are available at: https://consult.treasury.gov.au/
4
General outline and financial impact
• confining the application of the provisions to cartel conduct
affecting competition in Australian markets; and
• changing the scope of the joint venture exceptions to more
appropriately exempt legitimate joint ventures.
Date of effect: Part 1 of Schedule 2, containing the substantive
amendments to the provisions, commences at the same time as Schedule
1. Part 2 of Schedule 2, which renumbers the cartel provisions,
commences immediately after the commencement of Part 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16,
paragraphs.
Compliance cost impact: Nil compliance cost impact.
Price signalling and concerted practices
Schedule 3 to this Bill repeals Division 1A of Part IV of the Act, the price
signalling provisions.
Schedule 3 also extends section 45 to prohibit a corporation from
engaging in a concerted practice that has the purpose, effect or likely
effect of substantially lessening competition, and inserts an exception for
where the only parties to a concerted practice are the Crown and one or
more government authorities.
Schedule 3 also repeals the separate prohibition on exclusionary
provisions from the Act.
Date of effect: Schedule 3 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16.
Compliance cost impact: An increase of $0.64 million per year.
Exclusionary provisions
Schedule 4 to this Bill repeals the definition of 'exclusionary provision'
and a defence to the prohibition on exclusionary provisions, following the
repeal of this prohibition by Schedule 3.
As detailed in Chapter 2, a related amendment is made by Schedule 2 to
the provisions on cartel conduct, to ensure there is no gap following the
repeal of the prohibition on exclusionary provisions.
Date of effect: Schedule 4 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule does not raise any human
rights issue. See Statement of Compatibility with Human Rights --
Chapter 16.
Compliance cost impact: Nil compliance cost impact.
Covenants affecting competition
Schedule 5 to this Bill simplifies the provisions of the Act by defining
'contract' and 'party' to include covenants, and repealing redundant
provisions which separately deal with covenants.
Date of effect: Schedule 5 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
6
General outline and financial impact
Human rights implications: This Schedule does not raise any human
rights issue. See Statement of Compatibility with Human Rights --
Chapter 16.
Compliance cost impact: Nil compliance cost impact.
Secondary boycotts
Schedule 6 amends the Act to increase the maximum penalty applying to
breaches of the secondary boycott provisions. This aligns the penalty with
penalties for other breaches of the competition law.
Date of effect: Schedule 6 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16.
Compliance cost impact: Nil compliance cost impact.
Third line forcing
Schedule 7 to this Bill amends the Act to prohibit third line forcing only
where it has the purpose, effect or likely effect of substantially lessening
competition.
Date of effect: Schedule 7 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule does not raise any human
rights issue. See Statement of Compatibility with Human Rights --
Chapter 16.
Compliance cost impact: A decrease of $3.6 million per year.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Resale price maintenance
Schedule 8 to this Bill amends the resale price maintenance (RPM) and
notification provisions to allow a corporation or person to notify the
Commission of RPM conduct, as an alternative to seeking authorisation
from the Commission for RPM conduct.
Schedule 8 also provides an exemption from the RPM prohibition for
conduct between related bodies corporate.
Date of effect: Schedule 8 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule does not raise any human
rights issue. See Statement of Compatibility with Human Rights --
Chapter 16.
Compliance cost impact: An increase of $0.16 million per year.
Authorisations, notifications and class exemptions
Schedule 9 to this Bill amends Part VII and Part IX of the Act to:
• consolidate the various authorisation provisions, including
those relating to mergers, into a single authorisation process;
• grant the Commission a 'class exemption' power;
• allow the Commission to impose conditions on notifications
for resale price maintenance and collective bargaining that
involves collective boycott conduct;
• grant the Commission a power to issue a 'stop notice'
requiring notified collective boycott conduct that is the
subject of a notification to cease; and
• provide for Tribunal review of Commission merger
authorisation determinations.
Date of effect: Items 1 to 103 of Schedule 9 commence at the same time
as Schedule 1. Item 104 commences immediately after items 1 to 103.
8
General outline and financial impact
Items 105 to 132 commence at the same time as Schedule 1. Item 133
commences immediately after Schedule 1. Items 134 to 167 commence at
the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16.
Compliance cost impact: A decrease of $0.44 million per year.
Admissions of fact
Schedule 10 to this Bill extends section 83 of the Act so that a party
bringing certain proceedings may rely on both admissions of fact and
findings of fact made in certain other proceedings.
Date of effect: Schedule 10 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16.
Compliance cost impact: Nil compliance cost impact.
Power to obtain information, documents and evidence
Schedule 11 to this Bill extends the Commission's power to obtain
information, documents and evidence in section 155 to cover
investigations of alleged contraventions of court enforceable undertakings
and merger authorisation determinations.
Schedule 11 also introduces a 'reasonable search' defence to the offence
of refusing or failing to comply with section 155, and increases the fine
for non-compliance with section 155.
9
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Date of effect: Schedule 11 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16.
Compliance cost impact: A decrease of $1.3 million per year.
Access to services
Schedule 12 amends Part IIIA of the Act, which contains the National
Access Regime (Regime), to ensure that it better addresses the economic
problem of an enduring lack of effective competition in markets for
nationally significant infrastructure services.
Date of effect: Schedule 12 commences at the same time as Schedule 1.
Proposal announced: The proposal was announced in the Australian
Government Response to the Competition Policy Review on
24 November 2015.
Financial impact: Nil.
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16.
Compliance cost impact: Nil compliance cost impact.
Application and transitional provisions
Schedule 13 to this Bill inserts a new Division 3 into Part XIII of the Act,
which deals with the transitional application of amendments made by a
number of other Schedules to this Bill.
Date of effect: Schedule 13 commences at the same time as Schedule 1.
Proposal announced: This proposal relates to those announced in the
Australian Government Response to the Competition Policy Review on
24 November 2015.
10
General outline and financial impact
Financial impact: Nil.
Human rights implications: This Schedule does not raise any human
rights issue. See Statement of Compatibility with Human Rights --
Chapter 16.
Compliance cost impact: Nil compliance cost impact.
Other amendments
Schedule 14 to this Bill makes various amendments to streamline the
administration of the Act, to reduce compliance burdens for business,
individuals and within Government, while preserving the protections
available under the Act.
Date of effect: Schedule 14 commences on the day after Royal Assent.
Proposal announced: The measures in Schedule 14 were announced on
13 June 2014 in a communique by the Legislative and Governance Forum
on Consumer Affairs.
Financial impact: Nil.
Human rights implications: This Schedule is compatible with human
rights. See Statement of Compatibility with Human Rights -- Chapter 16.
Compliance cost impact: A small but unquantifiable decrease in
compliance costs.
Summary of regulation impact statement
Regulation impact on business
Impact: The measures included in this Bill have an overall reduction in
annual compliance costs.
Main points:
• The Government has been informed of the regulatory impacts
of various reform options by the findings of Harper Review,
previous independent reviews and inquiries, and through
public and targeted consultations at multiple stages.
11
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• The Harper Review made a number of recommendations
which are deregulatory in nature and result in a compliance
cost saving for those subject to the law, specifically those
related to: the definition of competition; third line forcing;
class exemptions; and the power to obtain information,
documents and evidence.
• A number of the recommendations made by the Harper
Review involve substantive changes to improve the
competition law, specifically those related to: price signalling
and concerted practices; resale price maintenance; and
collective bargaining. These measures will result in an
increase in compliance costs, particularly during the initial
transitional period as businesses seek legal advice to ensure
their practices continue to be compliant with the Act. The
increase in compliance costs also incorporates the costs of
seeking exemption for conduct via authorisation or
notification. While the increased availability of exemptions is
beneficial in terms of certainty, only the financial cost is
quantified.
• The remainder of the measures contained in this Bill are
expected to have nil compliance cost impact.
12
Chapter 1
Definition of competition
Outline of chapter
1.1 Schedule 1 to this Bill amends the definition of 'competition' in
section 4 of the Act, to clarify that competition includes competition from
goods and services that are capable of importation, in addition to those
actually imported.
Context of amendments
1.2 The provisions of the Act are focused on conduct that damages
competition in markets in Australia. When applying the provisions of the
Act, it is therefore necessary to analyse the relevant market and the forms
of competition which may affect that market.
1.3 'Market' and 'competition' are both defined terms within the
Act, and the Harper Review considered the appropriateness of the
respective definitions.
1.4 Competition is defined in section 4 to include competition from
imported goods or from services rendered by persons not resident or not
carrying on business in Australia.
1.5 Market is defined in section 4E to mean a market in Australia
for goods and services that are substitutable for, or otherwise competitive
with, each other. It includes the area of close competition between firms
for goods and services.
1.6 The Harper Review found that although the current definition of
market appropriately focuses on Australian markets, the definition of
competition should be amended so there is no doubt it includes
competition from potential imports of goods and services, not just actual
imports.
13
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Summary of new law
1.7 Schedule 1 amends the definition of 'competition' to clarify that
it includes potential imports of goods and services and is not limited to
actual imports of goods and services.
Comparison of key features of new law and current law
New law Current law
Competition expressly includes Competition includes goods and
goods and services that are capable of services that are imported.
being imported, in addition to goods
and services that are imported.
Detailed explanation of new law
1.8 The definition of competition is amended so that the term
specifically includes:
• Competition from goods that are imported, or are capable of
being imported, into Australia; and
• Competition from services that are rendered, or are capable
of being rendered, by persons not resident or not carrying on
business in Australia. [Schedule 1, item 1, subsection 4(1)]
1.9 The express inclusion of goods and services that are 'capable' of
being imported does not require consideration of every product and
service that could conceivably be imported into Australia. Rather, this
change clarifies that a credible threat of import competition is a relevant
component of competition analysis.
1.10 Where there is only a remote possibility of importation, for
example because importation would not be commercially viable, this
possibility would not constitute a credible threat of import competition
and should not form part of a competition analysis as the goods or
services are not 'capable' of being imported.
Commencement, application and transitional provisions
1.11 Schedule 1 does not commence at all unless the Competition and
Consumer Amendment (Misuse of Market Power) Act 2017 receives Royal
14
Definition of competition
Assent. If that Act receives Royal Assent, Schedule 1 commences from a
day to be fixed by Proclamation. If no earlier day is fixed by
Proclamation, Schedule 1 commences the day after 6 months from the day
this Act or the Competition and Consumer Amendment (Misuse of Market
Power) Act 2017 receives Royal Assent (whichever is later).
15
Chapter 2
Cartels
Outline of chapter
2.1 Schedule 2 to this Bill makes a number of amendments to the
Act to simplify the provisions on cartel conduct and better target
anti-competitive conduct, including:
• confining the application of the provisions to cartel conduct
affecting competition in Australian markets; and
• changing the scope of the joint venture exceptions to more
appropriately exempt legitimate joint ventures.
Context of amendments
2.2 Division 1 of Part IV of the Act prohibits certain types of
provisions within contracts, arrangements or understandings between
competitors that amount to cartel conduct.
2.3 A provision of a contract, arrangement or understanding
between competitors is a 'cartel provision' if it has: the purpose of output
restriction, market sharing or division, or bid-rigging; or the purpose,
effect or likely effect of price-fixing. Cartel conduct is anti-competitive in
most circumstances, as it usually increases prices or reduces consumer
choice, and is prohibited on a per se basis.
2.4 The Act contains both criminal and civil sanctions for
contravention of the prohibition on cartel provisions, at Subdivisions B
and C of Division 1 of Part IV of the Act. Subdivision D contains a
number of exceptions to the general prohibition, some of which are
available for both the criminal and civil sanctions, and some of which are
available for only one type of sanction.
2.5 A number of specific changes were recommended by the Harper
Review, which were intended to simplify the cartel conduct provisions
and better target them at anti-competitive conduct. These included
broadening the exceptions for joint ventures, which the Harper Review
considered were too narrow and potentially captured pro-competitive
conduct.
17
Competition and Consumer (Competition Policy Review) Bill 2017
Summary of new law
2.6 Schedule 2 to this Bill makes a number of amendments to
Division 1 of Part IV, to simplify the cartel conduct provisions and better
target anti-competitive conduct.
2.7 The defined term 'trade or commerce' is incorporated into
various provisions within Division 1 of Part IV, to expressly confine the
application of the provisions to cartel conduct affecting competition in
Australia or between Australia and other places.
2.8 The joint venture exceptions are broadened to apply to:
• arrangements or understandings (in addition to contracts);
and
• joint ventures for the acquisition of goods and services (in
addition to the production or supply of goods and services).
2.9 The joint venture exceptions are also amended so that they only
apply to:
• cartel provisions that are for the purposes of, and reasonably
necessary for, undertaking the joint venture; and
• joint ventures that are not carried on for the purpose of
substantially lessening competition.
2.10 The burdens of proof for the joint venture exceptions are also
amended to require the defendant to prove the elements of the relevant
exception on the balance of probabilities.
2.11 The 'output restriction' purpose condition in
paragraph 44ZZRD(3)(a) is broadened to include restrictions on
acquisitions of goods or services, to address any gap resulting from the
repeal of the separate prohibition on exclusionary provisions.
Comparison of key features of new law and current law
New law Current law
The cartel conduct provisions apply The cartel conduct provisions are not
to conduct 'in trade or commerce', expressly confined to conduct 'in
i.e. conduct occurring within trade or commerce'.
Australia, or between Australia and
places outside Australia.
18
Cartels
New law Current law
The joint venture exceptions apply to The joint venture exceptions apply
contracts, arrangements or only to contracts or intended
understandings. contracts.
The joint venture exceptions apply to The joint venture exceptions apply to
joint ventures for the acquisition of joint ventures for the production
goods, in addition to joint ventures and/or supply of goods or services.
for the production and/or supply of
goods or services.
The joint venture exceptions apply to The joint venture exceptions apply to
cartel provisions that are for the cartel provisions that are for the
purposes of a joint venture and purposes of a joint venture.
reasonably necessary for undertaking
a joint venture.
The joint venture exceptions do not The joint venture exceptions are
apply to joint ventures that are carried available to any joint venture within
on for the purpose of substantially the definition of section 4J of the Act.
lessening competition.
The defendant bears a legal burden of The defendant bears an evidential
proof, in establishing the joint venture burden of proof, in establishing the
exceptions. joint venture exceptions.
The 'output restriction' purpose The 'output restriction' purpose
condition refers to production, condition refers to production,
capacity, supply and acquisition. capacity and supply.
Detailed explanation of new law
Cartel conduct affecting 'trade or commerce'
2.12 The Harper Review was of the view that, for cartel conduct to be
an offence within Australia, it should have an effect on trade or commerce
within, to or from Australia, consistent with the treatment of cartel
conduct in comparable overseas jurisdictions.
2.13 Schedule 2 amends a number of provisions in Division 1 of
Part IV to include a specific requirement that cartel conduct must be 'in
trade or commerce'. Trade or commerce is defined in section 4 to mean
trade or commerce within Australia, or between Australia and places
outside Australia. [Schedule 2, items 3 to 8, subsection 44ZZRD (note), paragraphs
44ZZRD(4)(c) to (e), 44ZZRD(4)(f), 44ZZRD(4)(g), 44ZZRD(4)(h), 44ZZRD(4)(ha),
44ZZRD(4)(i) and 44ZZRD(4)(j)]
2.14 The intention of this amendment is to expressly confine the
application of the provisions to cartel conduct that affects businesses or
consumers in Australia.
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Competition and Consumer (Competition Policy Review) Bill 2017
2.15 This amendment aligns the cartel conduct provisions with the
Act's objective of enhancing the welfare of Australians.
Exceptions for joint ventures
2.16 The Harper Review's view was that the narrow framing of the
joint venture exceptions to the cartel provisions may have the effect of
limiting legitimate commercial transactions and increasing business
compliance costs.
2.17 The Harper Review also noted that broadening the joint venture
exception for cartel conduct will not put joint ventures beyond the reach
of the competition law, as section 45 prohibits joint venture arrangements
that have the purpose, effect or likely effect of substantially lessening
competition.
2.18 Schedule 2 makes a number of amendments to broaden the joint
venture exceptions to both the criminal cartel provisions and the civil
cartel provisions (in sections 44ZZRO and 44ZZRP respectively).
2.19 Firstly, the amended joint venture exceptions apply to
arrangements and understandings containing cartel provisions, in addition
to contracts containing such provisions. This recognises that not all
features of a joint venture will be contained in a formal written contract.
[Schedule 2, items 11, 12 and 17, subsections 44ZZRO(1) and 44ZZRP(1)]
2.20 Secondly, the amended joint venture exceptions are extended to
apply to joint ventures for the acquisition of goods or services. The
amended exceptions apply to one or more of the production, supply or
acquisition of goods or services. [Schedule 2, items 13 and 18, paragraphs
44ZZRO(1)(b) and 44ZZRP(1)(b)]
2.21 Joint ventures for the acquisition of goods or services are
common, and may encourage pro-competitive economic activity, for
example by allowing smaller businesses to increase their bargaining
power, decrease their cost base and become more price-competitive.
2.22 Thirdly, the amended joint venture exceptions only apply to
cartel provisions that are both for the purposes of the joint venture and
reasonably necessary for undertaking the joint venture (where the
reference to 'purpose' should be read in the context of section 4F of the
Act). [Schedule 2, items 13 and 18, paragraphs 44ZZRO(1)(a) and 44ZZRP(1)(a)]
2.23 The addition of the 'reasonably necessary' element tightens the
exceptions to ensure that they exclude cartel provisions that are not
reasonably necessary for the joint venture.
20
Cartels
2.24 For example, a provision that specified the price at which
outputs of a mining joint venture should be sold may be reasonably
necessary for undertaking a mining joint venture. However a provision
that similarly specified that output from mines not part of the joint venture
must be sold at the same price may be for the purposes of, but is unlikely
to be reasonably necessary for, the joint venture.
2.25 Fourthly, the amended joint venture exceptions only apply to
joint ventures that are not carried on for the purpose of substantially
lessening competition. This amendment confines the exceptions to joint
ventures established for genuine commercial purposes. [Schedule 2, items 13
and 18, paragraphs 44ZZRO(1)(ba) and 44ZZRP(1)(ba)]
2.26 The defence in section 76C to proceedings relating to an
exclusionary provision illustrates a precedent for this approach. That
defence (which is repealed by Schedule 4 to this Bill) is similarly limited
to exclusionary provisions that are for the purposes of a joint venture and
which do not have the purpose, effect or likely effect of substantially
lessening competition.
2.27 The reference to 'purpose' should also be read in the context of
section 4F of the Act, such that a defendant will be unable to rely on the
joint venture exceptions if the purpose of substantially lessening
competition is a substantial purpose, even if it is not the only purpose or
the primary purpose.
2.28 Finally, the joint venture exceptions are amended to increase the
standard of proof that a defendant must discharge in raising the relevant
exception. To raise the joint venture exception in a civil action (section
44ZZRP), the defendant must prove the relevant matters on the 'balance
of probabilities'. To raise the joint venture exception in a criminal action
(section 44ZZRO), the defendant is under a 'legal burden' and this must
also be discharged on the balance of probabilities. [Schedule 2, items 12, 15, 17
and 20, subsections 44ZZRO(1), 44ZZRO(1)(note), 44ZZRP(1) and 44ZZRP(2)]
2.29 In either case, the defendant must meet the standard of a
'balance of probabilities' to raise the relevant joint venture exception, as
opposed to the standard of proof for the current evidential burden ('a
reasonable possibility'). Given this practical similarity, the two exceptions
are discussed together below.
2.30 The increase in the burden of proof on the defendant is
appropriate and justifiable in light of the extension of the exceptions to
arrangements or understandings containing a cartel provision.
2.31 Currently, for either of the exceptions to apply, the relevant
cartel provision must be contained in a contract and the defendant must
21
Competition and Consumer (Competition Policy Review) Bill 2017
satisfy an evidential burden - that is, the defendant must produce evidence
suggesting a reasonable possibility that the matters in section 44ZZRO or
44ZZRP exist. It is likely that the production of the contract, which should
be readily available to the defendant if it exists, would satisfy this
evidential burden. It would then fall to the prosecution to prove on the
balance of probabilities (in a civil action) or beyond reasonable doubt (in a
criminal action), that the evidence produced does not establish the
relevant exception - for example, by proving that the cartel provision is
not for the purposes of the joint venture. Under the current exceptions, an
evidential burden on the defendant is reasonable as the primary evidence
as to the nature of the claimed joint venture would be before the court.
2.32 In contrast, under the amended joint venture exceptions which
extend to arrangements or understandings, the relevant element of the
joint venture may be contained across several documents of greater or
lesser formality, and may not be contained in any form of written
documentation (for example, it may have been established through a
series of conversations or agreed in a meeting). In this circumstance, it is
likely to be relatively easy and inexpensive for a defendant to produce
evidence suggesting a reasonable possibility that their joint venture falls
within the relevant exception, even if this were not the case.
2.33 However, it would be extremely difficult and expensive for the
prosecution to obtain sufficient evidence to prove in the first instance, to
the applicable standard, that the relevant exception did not apply, as the
evidence needed to do this may be known only to, and be held by, the
defendant. This practical difficulty may create scope for abuse of the joint
venture exceptions by parties who are not genuinely engaged in a joint
venture to which the exceptions apply.
2.34 Increasing the standard of proof which the defendant must meet
improves this situation as, in practice, the defendant is required to provide
stronger evidence to the court in order to prove on the balance of
probabilities that the relevant exception applies. The defendant will be in a
unique position to easily and cheaply produce such evidence, having
ready access to the full range of formal and informal correspondence
between the parties.
2.35 With the additional information before the court, the prosecution
would then have sufficient information to determine whether to make a
case in reply and thereby seek to prove to the requisite standard that the
exception does not apply (for example, to argue based on that evidence
that the joint venture was, in fact, carried on for the purpose of
substantially lessening competition).
2.36 Widening the application of the exceptions will decrease the
ongoing business compliance costs for genuine commercial joint venture
22
Cartels
undertakings, by increasing certainty that genuine joint venture activities
will not contravene the cartel conduct prohibition. However, without the
higher burden of proof on the defendant, it is likely that the practical
difficulties for the prosecutor would be such that anti-competitive,
collusive conduct would be able to avoid the cartel conduct prohibitions.
The higher burden is therefore necessary in order to broaden exceptions in
the manner described above.
Exclusionary provisions
2.37 The 'output restriction' purpose condition is amended to prohibit
cartel provisions with the purpose of directly or indirectly preventing,
restricting or limiting production, capacity, supply or acquisition. The
inclusion of acquisition is achieved by adding a fourth subparagraph to
paragraph 44ZZRD(3)(a). [Schedule 2, item 2, subparagraph 44ZZRD(3)(a)(iv)]
2.38 This change is made as a result of the repeal of the separate
prohibition on exclusionary provisions, as detailed in Chapters 3 and 4,
and addresses a possible gap in the law following that repeal.
Renumbering
2.39 Part 2 of Schedule 2 renumbers Division 1 of Part IV to the Act,
in order to make the cartel conduct provisions easier to navigate.
[Schedule 2, item 38, Division 1 of Part IV]
2.40 Amendments are also made to Schedule 1 to the Act, to mirror
the renumbering of the Act itself. [Schedule 2, item 39, Division 1 of Part 1 of
Schedule 1 to the Act]
2.41 Schedule 2 also provides for references in other Acts,
instruments or documents to be construed as a reference to the
renumbered provision where appropriate. [Schedule 2, item 40]
Consequential amendments
2.42 Following the amendments to the joint venture exceptions,
consequential amendments are made to sections 44ZZRO and 44ZZRP so
that they also apply to arrangements and understandings. [Schedule 2, items
14 and 19, paragraphs 44ZZRO(1)(c), 44ZZRO(1)(d), 44ZZRP(1)(c) and 44ZZRP(1)(d)]
2.43 Following the addition of subparagraph 44ZZRD(3)(a)(iv),
amendments are made to various provisions of the Act to add a reference
to the new subparagraph 44ZZRD(3)(a)(iv) alongside existing references
23
Competition and Consumer (Competition Policy Review) Bill 2017
to subparagraph 44ZZRD(3)(a)(iii). [Schedule 2, items 1, 9 and 10, subsection
44ZZRD(5) and paragraphs 6(2C)(h) and 44ZZRD(7)(a)]
2.44 Following the amendment to apply the joint venture exceptions
to arrangements and understandings, complex additional subsections
relating to arrangements and understandings have been removed from
section 44ZZRO. [Schedule 2, item 16, subsections 44ZZRO(1A) and 44ZZRO(1B)] .
2.45 As a defendant is now under a legal burden to raise the joint
venture exceptions, subsection 44ZZRO is amended to remove a
requirement for the defendant to give the prosecutor a written notice
setting out the facts and witnesses on whom the defendant wishes to rely.
[Schedule 2, item 16, subsections 44ZZRO(2) to 44ZZRO(4)]
2.46 Schedule 2 also makes amendments to Schedule 1 to the Act, to
correspond to the amendments made by Schedule 2 to the Act itself and
apply those amendments to persons. [Schedule 2, items 21 to 37, subsections
44ZZRD(4)(note), 44ZZRD(5), 44ZZRO(1), 44ZZRO(1A) to 44ZZRO(5), 44ZZRP(1),
44ZZRP(1A) and 44ZZRP(2), paragraphs 44ZZRD(4)(c) to 44ZZRD(4)(e),
44ZZRD(4)(f), 44ZZRD(4)(g), 44ZZRD(4)(h), 44ZZRD(4)(ha), 44ZZRD(4)(i),
44ZZRD(j), 44ZZRD(7)(a), 44ZZRO(1)(a), 44ZZRO(1)(b), 44ZZRO(1(c),
44ZZRO(1)(d), 44ZZRP(1)(a), 44ZZRP(1)(b), 44ZZRP(1)(c) and 44ZZRP(1)(d) and
subparagraph 44ZZRD)(3)(a)(iv) of Schedule 1 to the Act]
Commencement, application and transitional provisions
Part 1 of Schedule 2 commences at the same time as Schedule 1. Part 2 of Schedule 2
commences immediately after the commencement of Part 1.
24
Chapter 3
Price signalling and concerted practices
Outline of chapter
3.1 Schedule 3 to this Bill repeals Division 1A of Part IV of the Act,
the price signalling provisions.
3.2 Schedule 3 also extends section 45 to prohibit a corporation
from engaging in a concerted practice that has the purpose, effect or likely
effect of substantially lessening competition, and inserts an exception for
where the only parties to a concerted practice are the Crown and one or
more government authorities.
3.3 Schedule 3 also repeals the separate prohibition on exclusionary
provisions from the Act.
Context of amendments
Price signalling
3.4 Division 1A of Part IV of the Act was added in 2012 and
prohibits the anti-competitive disclosure of pricing and other information
(price signalling). The provisions apply only to a single industry (banking)
and no cases have ever been brought for contravention of the prohibitions.
3.5 The Harper Review noted that Division 1A is complex,
particularly as defining the circumstances under which price disclosure is
pro-competitive or benign is difficult. The public disclosure of pricing
information can help consumers to make informed choices and is unlikely
to be harmful to competition. Where such disclosures occur in private, this
may facilitate anti-competitive collusion between competitors, such as the
coordination of pricing decisions resulting in higher price outcomes.
However, the private disclosure of pricing information may in some
circumstances be pro-competitive or a necessary part of business, for
example in the case of a joint venture or similar type of collaborative
business activity.
3.6 The Review further considered that other provisions of the Act
could deal with anti-competitive price signalling, particularly section 45.
25
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
It also considered that there was no policy rationale for price signalling
laws that applied only to the banking sector.
3.7 The Harper Review concluded that the price signalling
provisions are not fit for purpose and recommended repealing them.
3.8 It further recommended that concerns about the ability of
section 45 to address price signalling be addressed by expanding the
section to include a prohibition on concerted practices (in addition to
contracts, arrangements or understandings) with the purpose, effect or
likely effect of substantially lessening competition.
Exclusionary provisions
3.9 See Chapter 4 for detail on the context of the repeal of the
separate prohibition on exclusionary provisions.
Summary of new law
3.10 Division 1A of Part IV of the Act is repealed, and section 45 of
the Act is expanded to include the concept of a 'concerted practice'.
3.11 An exemption is inserted at subsection 45(8AA), where the only
persons engaging in a concerted practice are the Crown (in right of the
Commonwealth, a State or Territory) and one or more government
authorities.
3.12 Subparagraphs 45(2)(a)(i) and 45(2)(b)(i) are repealed, to
remove the separate prohibition on exclusionary provisions from the Act.
26
Price signalling and concerted practices
Comparison of key features of new law and current law
New law Current law
The anti-competitive disclosure of The anti-competitive disclosure of
pricing and other information is dealt pricing and other information is
with under the more general separately and specifically prohibited.
prohibitions in the competition law.
A corporation is prohibited from No equivalent.
engaging in a concerted practice that
has the purpose, effect or likely effect
of substantially lessening
competition.
An exemption from the prohibition No equivalent.
on concerted practices is added where
the only parties are a government and
one or more authorities of that
government.
There is no separate prohibition on There is a separate prohibition on
contracts, arrangements or contracts, arrangements or
understandings containing understandings containing
exclusionary provisions. exclusionary provisions.
Section 51 provides a range of Section 51 provides a range of
additional exceptions related to additional exceptions related to
specific contracts, arrangements, specific contracts, arrangements and
understandings and concerted understandings.
practices.
Detailed explanation of new law
3.13 Schedule 3 repeals Division 1A of Part IV of the Act, relating to
the anti-competitive disclosure of pricing and other information.
[Schedule 3, item 1, Division 1A of Part IV]
3.14 Schedule 3 also broadens section 45 to apply to 'concerted
practices'. This is intended to capture conduct previously falling within
the separate prohibitions within Division 1A. At the same time,
subsections of section 45 are amended for simplification. [Schedule 3, items
2, 4 and 5, subsections 45(1) to 45(3),45(6) 45(7) and 45(8)]
3.15 Schedule 3 also inserts an exception into section 45 where the
only parties to a concerted practice are the Crown and one or more
government authorities. [Schedule 2, item 5, subsection 45(8AA)]
27
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Concerted practices
3.16 Schedule 3 amends section 45 to prohibit corporations from
engaging in a 'concerted practice' that has the purpose, effect or likely
effect of substantially lessening competition. Schedule 3 also rewrites
subsections 45(1), 45(2) and 45(3) to incorporate concerted practices and
simplify the provision. Section 45 will continue to also prohibit making,
arriving at or giving effect to a contract, arrangement or understanding
with the purpose, effect or likely effect of substantially lessening
competition. [Schedule 3, item 1, subsections 45(1), 45(2) and 45(3)]
3.17 Schedule 3 does not insert a definition of 'concerted practice'
into the Act. The Harper Review considered it unnecessary to introduce a
legislative definition of 'concerted practice', as the word 'concerted' has a
clear and practical meaning.
3.18 The concept of a 'concerted practice' under section 45 is to be
distinguished from the concept of 'acting in concert' as it appears in
section 45D. The concept of a 'concerted practice' is to be read and
applied in the context of section 45 and with reference to the explanatory
material that follows, and not in the context of section 45D or any case
authority or explanatory material on section 45D. The following is
intended to guide the interpretation of the term while retaining a flexible
and principled application of the concept.
Characteristics of a concerted practice
3.19 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 this conduct substitutes, or would be likely to
substitute, cooperation in place of the uncertainty of competition.
3.20 It is not necessary that any (or all) of the parties to a concerted
practice should act:
• in the same manner;
• in the same market; or
• at the same time.
3.21 It is intended that the concept of a 'concerted practice' should
capture conduct that falls short of a contract, arrangement or
understanding as the courts have interpreted each of those terms in
section 45.
3.22 A concerted practice does not require, but may involve:
28
Price signalling and concerted practices
• the formality or legally enforceable obligations characteristic
of a contract;
• the express communication characteristic of an arrangement.
A concerted practice may be established in the absence of
any direct contact between the firms, for example where
firms communicate indirectly through an intermediary such
as a peak industry body; or
• the commitment characteristic of an understanding. A
concerted practice may exist even if none of the parties is
obliged, either legally or morally, to act in any particular
way.
Example 3.1 - Concerted practice
In a small country town, there are three petrol stations: X, Y and Z.
Immediately before adjusting its prices, X sends an email to Y and Z
with a price. After several emails, it becomes clear to Y and Z that
immediately after sending the email with the price, X changes its price
to match the email. Y and Z join in, and each emails their own
proposed price adjustments to the other two. A practice develops so
that, with a few exceptions, where one petrol station emails their
prices, the three stations all change their prices to match the price in
the email.
At no point do any of them expressly or implicitly agree to reciprocate
the communication or to change their prices accordingly. On some
occasions after one of the stations announces a price rise, one of the
other stations chooses not to match the price, and thereby gains extra
customers on that occasion by increasing their price by less than the
other two stations and having the lowest price. There are no
consequences of this occasional divergence from the usual practice.
X, Y and Z are each likely to have contravened section 45 by engaging
in a concerted practice with the purpose, effect or likely effect of
substantially lessening competition. Even though none of the parties
committed to communicate or change their prices, and even though
there were some occasions where a petrol station did not change its
prices in accordance with the email, the effect of the overall practice
was that the petrol stations could increase their prices safe in the
knowledge that this would be unlikely to result in a loss of customers
as the others would most likely reciprocate. This practice has
substantially reduced price competition for petrol in the town.
3.23 A concerted practice may exist in addition to, or ancillary to, a
contract, arrangement or understanding.
29
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
3.24 It is not necessary that a concerted practice have an
anti-competitive 'provision', as it is the practice itself which has the
anti-competitive purpose, effect or likely effect.
3.25 The concept of a concerted practice is not intended to capture
mere innocent parallel conduct, for example where two firms who are
determining their prices independently happen to charge similar prices for
the same product (see Example 3.4).
3.26 Similarly, it is not intended to capture conduct such as the public
disclosure of pricing information which facilitates price comparison by
consumers, as this conduct will increase rather than substantially lessen
competition.
3.27 The following examples illustrate that a concerted practice:
• does not necessarily involve regular or repeated conduct - a
single instance of conduct may constitute a concerted
practice (Example 3.2);
• will typically, but not necessarily, involve the
communication of commercial information either by one
party to another, or between the parties, generally to reduce
or eliminate uncertainty as to the future conduct of the firm
making the communication; and
• does not require that any (or all) of the parties to the practice
reciprocate the actions of the first party or in any way change
their conduct as a result of the first party's actions - the
actions of the first party will be sufficient to establish the
concerted practice, and the culpability of each other party to
the concerted practice will depend on the nature of their
involvement and their subsequent action.
3.28 Once conduct has been found to be a concerted practice, the
central issue, and the determinant of whether the relevant conduct is
prohibited under section 45, is whether the concerted practice has the
purpose, effect or likely effect of substantially lessening competition.
Example 3.2 - Concerted practice as a single instance of conduct
Salmon fishers in a small geographic region form an industry
association that meets regularly, usually to discuss general industry
issues. At one meeting, one fisher (X) states that they will restrict their
output to a certain quantity for the next three months, in order to
increase the price of salmon in the region. X shares this information in
the hope that the other fishers will similarly restrict their output, so that
30
Price signalling and concerted practices
X can adopt the strategy without fearing it will lose customers to the
other fishers.
X has shared commercially sensitive information which reduces
uncertainty as to X's likely output over the next three months. X is
likely to have contravened section 45, by engaging in a concerted
practice with the purpose or likely effect of substantially lessening
competition, even if X was unable to convince all of the other salmon
fishers to adopt a similar strategy and even some or all of the others did
not adopt such a strategy (that is, even if the ultimate effect was not a
substantial lessening of competition).
Example 3.3 - Concerted practice as communication of commercial information,
reciprocity not required
Bank X and Bank Y are two competing banks. A week before banks
are expected to announce their respective interest rates for the next
quarter, X sends Y a document setting out the interest rate it will
announce the following week. Y did not ask for this information, and
does not act on this information by either reciprocating with
information about its own intended interest rate or changing its strategy
to match X's interest rate.
The different actions of X and Y will have different implications under
section 45.
X is likely to have contravened section 45, by engaging in a concerted
practice with the purpose or likely effect of substantially lessening
competition, even if this was not the actual effect because Y did not act
on the information.
X's communication to Y has made Y a party to a concerted practice.
However, Y is not likely to have contravened section 45, as Y did not
use the information to inform a decision or change strategy, and this
conduct did not have the purpose, effect or likely effect of substantially
lessening competition. Y could further ensure it did not breach section
45 by expressly rejecting X's approaches and requesting that X not
communicate any further information of this nature.
Example 3.4 - Mere parallel conduct
Company X manufactures and distributes the most popular budget
television, which is stocked by all major television retailers and two
smaller retailers. X supplies the televisions to large retailers for $300
each, and charges the smaller retailers $320 each due to the lower
quantity ordered.
The major retailers are able to sell the televisions for $320 and make a
commercial profit. However, the two smaller retailers independently
determine that they cannot sell the televisions for any less than $340
and still make a commercial profit.
31
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
The conduct of the two smaller retailers is unlikely to constitute a
concerted practice. The two smaller retailers have a similar cost base,
and have taken this cost base into account in independently
determining the prices they will charge for the television. This is
merely innocent parallel conduct, which the concerted practices
prohibition in section 45 is not intended to capture.
Crown exemption
3.29 An exemption is inserted at subsection 45(8AA), so that
section 45 does not apply to a concerted practice where the only persons
engaging in it are, or would be:
• the Crown in right of the Commonwealth, and one or more
authorities of the Commonwealth; or
• the Crown in right of a State or Territory, and one or more
authorities of that State or Territory. [Schedule 3, item 5,
subsection 45(8AA)]
3.30 This exemption is similar to the exemption for related bodies
corporate in subsection 45(8), and recognises that although the Crown can
engage in market activities through government authorities, the Crown
and its authorities cannot benefit from the exemption for related bodies
corporate.
3.31 This exemption ensures that the prohibition against concerted
practices does not unnecessarily hinder the social policy objectives that
the Commonwealth, a State or a Territory may pursue through market
activities. In particular, the exemption exists to ensure that cooperation by
authorities to fulfil community service obligations is not hindered.
Example 3.5 - Exemption for related bodies corporate
A State government is responsible for the governance of two
State-owned electricity corporations. Each year, the State government
asks the providers to coordinate which geographical areas each
corporation will agree to service over the next year. This information
allows the State government to ensure that community service
obligations are met and there is no area left without an electricity
provider if no private provider is available.
While this conduct may constitute a concerted practice, this would not
contravene section 45 due to the exemption in subsection 45(8AA).
Although the two electricity corporations have shared what would
ordinarily be commercially sensitive information, the only parties to
this concerted practice are a State government and two authorities of
that State government.
32
Price signalling and concerted practices
Operation of section 45
3.32 The following is intended to clarify the operation of section 45
as amended. Where provisions are amended for simplification, their
operation is not intended to change except as described in this Chapter.
3.33 Paragraphs 45(1)(a) and 45(1)(b) set out that a corporation must
not enter into or give effect to a contract, arrangement or understanding, if
the contract, arrangement or understanding (or a provision thereof) has the
purpose, or would have or be likely to have the effect, of substantially
lessening competition. [Schedule 3, item 1, paragraphs 45(1)(a) and 45(1)(b)]
3.34 Paragraph 45(1)(c) sets out that a corporation must not engage
with one or more persons in a concerted practice that has the purpose, or
has or is likely to have the effect, of substantially lessening competition.
[Schedule 3, item 1, paragraph 45(1)(c)]
3.35 Subsection 45(2) makes it clear that a corporation must not give
effect to a prohibited provision of a contract, arrangement or
understanding that was made or arrived at before the commencement of
section 45 as amended. [Schedule 3, item 1, paragraph 45(2)]
3.36 Subsection 45(3) contains a specific definition of 'competition'
for the purposes of section 45, which focuses on the relevant markets in
which competition is to be considered. When considering whether conduct
substantially lessens competition for the purposes of section 45, the
appropriate markets in which competition is to be assessed include any
market in which a corporation (or related body corporate) that is party to
the contract, arrangement or understanding containing the prohibited
provision supplies or acquires goods or services (or would supply or
acquire goods or services, but for the anti-competitive provision).
3.37 With the introduction of the concept of a concerted practice, the
definition of competition is further extended, for the purposes of
section 45, in relation to a concerted practice. This ensures that there is a
consistent approach to determining the markets for analysis of any
potential anti-competitive effects. [Schedule 3, item 1, paragraph 45(3)(b)]
3.38 Subsection 45(5A) is inserted to prevent the application of
section 45 to conduct which would also contravene section 47, or would
do so aside from subsection 47(10), an authorisation under section 88 or a
notification under section 93. This applies only to contracts, arrangements
and understandings, and not to concerted practices. This provision
replaces the former subsection 45(6) insofar as it referred to conduct
under section 47. [Schedule 3, item 9, subsection 45(5A)]
33
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
3.39 In addition to the new exception in subsection 45(8AA),
section 45 contains a number of existing exceptions, which are amended
to incorporate concerted practices:
• an anti-overlap provision which prevents section 45
capturing conduct which would contravene more specific
prohibitions (subsection 45(6));
• an exception for the acquisition of shares in the capital of a
body corporate or any assets of a person (subsection 45(7));
and
• an exception where the only parties to the contract,
arrangement, understanding or concerted practice are related
bodies corporate (subsection 45(8)). [Schedule 3, item 5,
subsections 45(6) to 45(8)]
3.40 Similarly, the exception in subsection 51(2) is amended to
extend the exception to concerted practices. This means that in
determining whether a contravention of Part IV (other than sections 45D,
45DA, 45DB, 45E, 45EA or 48) has been committed, regard shall not be
had to concerted practices which meet the applicable requirements of
subsection 51(2) as amended. [Schedule 3, items 16, 18, 19 and 20, subsection
51(2AA), paragraphs 51(2)(a), 51(2)(aa), 51(2)(c), 51(2)(d) and 51(2)(g)]
Exclusionary provisions
3.41 Schedule 3 to this Bill also repeals subparagraphs 45(2)(a)(i)
and 45(2)(b)(i) to remove the separate prohibition on exclusionary
provisions from the Act. This is achieved by repealing subsections 45(1)
to 45(3) and rewriting the provisions without the separate prohibition on
exclusionary provisions. [Schedule 3, item 2, subsections 45(1) to 45(3)]
3.42 As detailed in Chapter 4, section 4D, which contains the
definition of exclusionary provision, is repealed as the repeal of the
separate prohibition on exclusionary provisions makes the definition
redundant. [Schedule 4, item 1, section 4D]
3.43 As detailed in Chapter 2, a consequential amendment is made to
the cartel conduct provisions to address any gap in the law as a result of
the repeal of the separate prohibition on exclusionary provisions. [Schedule
2, item 2, subparagraph 44ZZRD(3)(a)(iv)]
34
Price signalling and concerted practices
Consequential amendments
3.44 Minor consequential amendments are made to various
provisions of the Act to reflect the addition of the concept of concerted
practices and other amendments as detailed in this Chapter. [Schedule 3,
items 3, 11 to 15, 17 and 21 to 29, subsections 45(5A), 45(8A), 45(9), 51(4),93AC(2),
166(1) and 166(3), paragraphs 4(2)(a), 4(2)(b), 6(2)(d), 51(2)(b), 84(1)(b), 84(3)(b),
93AB(1)(a) and 93AB(1)(b) and subparagraph 6(2)(b)(i)]
3.45 Schedule 3 also makes amendments to Schedule 1 to the Act, to
correspond to the amendments made by Schedule 3 to the Act itself and
apply those amendments to persons. [Schedule 3, items 6 to 10 and 30 to 37,
Division 1A of Part 1 of Schedule 1, subsections 45(1) to 45(3), 45(5A), 45(6), 45(7) to
45(9), 51(2AA) and 51(4), and paragraphs 51(2)(a), 51(2)(aa), 51(2)(b), 51(2)(c),
51(2)(d) and 51(2)(g) of Schedule 1 to the Act]
Commencement, application and transitional provisions
3.46 Schedule 3commences at the same time as Schedule 1.
35
Chapter 4
Exclusionary provisions
Outline of chapter
4.1 Schedule 4 to this Bill repeals the definition of 'exclusionary
provision' and a defence to the prohibition on exclusionary provisions,
following the repeal of this prohibition by Schedule 3.
4.2 As detailed in Chapter 2, a related amendment is made by
Schedule 2 to the provisions on cartel conduct, to ensure there is no gap
following the repeal of the prohibition on exclusionary provisions.
Context of amendments
4.3 Sub-paragraphs 45(2)(a)(i) and 45(2)(b)(i) of the Act
respectively, prohibit making a contract or arrangement, arriving at an
understanding, or giving effect to a contract, arrangement or
understanding, containing an exclusionary provision.
4.4 Exclusionary provision is defined in section 4D, and broadly
means a provision of an actual or proposed contract, arrangement or
understanding between competitors, where the provision has the purpose
of preventing, restricting or limiting supplies of goods and services to, or
acquisitions from, particular persons or classes of persons.
4.5 Section 76C contains a defence to proceedings relating to an
exclusionary provision where the provision is for the purposes of a joint
venture and does not have the purpose, effect or likely effect of
substantially lessening competition.
4.6 The prohibition on exclusionary provisions substantially
overlaps with the prohibition on cartel provisions, particularly where a
provision in a contract, arrangement or understanding between
competitors has the purpose of:
• restricting the actual or likely production of goods, supply of
goods or services, or the capacity to supply services (i.e.
output restriction) (paragraph 44ZZRD(3)(a)); or
37
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• allocating customers or geographical areas of supply or
acquisition between the parties (i.e. market sharing or
division) (paragraph 44ZZRD(3)(b).
4.7 Where a provision has the purpose of output restriction or
market sharing or division, that provision is likely to constitute both a
cartel provision and an exclusionary provision.
4.8 Section 45 contains a number of anti-overlap provisions which
prevent the application of section 45 to conduct which contravenes one of
several other provisions. However, there is no anti-overlap provision
preventing the application of section 45 to conduct which contravenes the
prohibition on cartel provisions.
4.9 The Harper Review considered that this overlap is unnecessary
and increases the complexity of the law, and recommended that the
separate prohibition on exclusionary provisions be repealed, with an
amendment to the provisions on cartel conduct to address any resulting
gap in the law.
Summary of new law
4.10 Schedule 4 to this Bill repeals the definition of 'exclusionary
provision' in section 4D and makes consequential amendments to remove
references to section 4D throughout the Act.
4.11 The defence to the exclusionary provision prohibition is also
repealed as it is no longer needed.
Comparison of key features of new law and current law
New law Current law
'Exclusionary provision' is not 'Exclusionary provision' is defined in
defined in the Act. the Act.
There is no defence as there is no There is a defence to the prohibition
longer a separate prohibition on against exclusionary provisions.
exclusionary provisions.
Detailed explanation of new law
4.12 Schedule 4 repeals the definition of 'exclusionary provision', in
section 4D. [Schedule 4, item 1, section 4D]
38
Exclusionary provisions
4.13 The definition of 'exclusionary provision' is redundant
following the repeal of the separate prohibition on exclusionary provisions
(as detailed in Chapter 3).
4.14 Schedule 4 to this Bill also repeals section 76C, the defence to
the prohibition on exclusionary provisions, as it is made redundant by the
repeal of the separate prohibition. [Schedule 4, item 2, section 76C]
Consequential amendments
4.15 Consequential amendments are made to provisions of the Act
which reference section 4D or exclusionary provisions, to remove such
references. [Schedule 4, items 3-5, subsections 93AC(1) and 10.08(1)]
Commencement, application and transitional provisions
4.16 Schedule 4commences at the same time as Schedule 1.
39
Chapter 5
Covenants affecting competition
Outline of chapter
5.1 Schedule 5 to this Bill simplifies the provisions of the Act by
defining 'contract' and 'party' to include covenants, and repealing
redundant provisions which separately deal with covenants.
Context of amendments
5.2 Section 45 concerns contracts, arrangements or understandings
that restrict dealings or affect competition. The operation of section 45 is
detailed in Chapter 3.
5.3 Sections 45B and 45C relate to covenants and largely duplicate
the concepts of section 45. Covenants are a form of agreement in which
one or more parties promise to do, or refrain from doing, some action. The
distinction between contracts and covenants appears throughout the Act,
for example in section 87 which details the orders the Court may make
and contains separate references to contracts and covenants.
5.4 In a legal sense, there are technical differences between
contracts and covenants. However, the Harper Review found that these
technical differences have little to no impact on the agreement's effect on
competition.
5.5 The Harper Review recommended that provisions which are
redundant or unnecessarily duplicate other provisions could be removed,
and identified the provisions relating to covenants as one example of
unnecessary duplication.
Summary of new law
5.6 Schedule 5 to this Bill simplifies the provisions of the Act by
inserting definitions of 'contract' and 'party' and defining those terms to
include covenants.
5.7 Provisions which deal separately with covenants, which are now
redundant, are repealed.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Comparison of key features of new law and current law
New law Current law
Contract is defined, to include a Contract is not defined.
covenant.
Party to a contract that is a covenant, Party is not defined.
is defined to include a person bound
by or entitled to the benefit of a
covenant.
Covenants are dealt with under the Throughout the Act, contracts and
provisions of the Act referring to covenants are dealt with under
contracts. separate provisions.
Detailed explanation of new law
5.8 Schedule 5 to this Bill inserts a definition of 'contract' into the
Act, and deems 'contract' to include a covenant. The definition does not
define contract more generally, as the definition is well established in the
common law. [Schedule 5, item 1, subsection 4(1)]
5.9 Schedule 5 also inserts a definition of 'party' to clarify that a
party to a contract that is a covenant, includes a person who is bound by,
or entitled to the benefit of, the covenant. [Schedule 5, item 1, subsection 4(1)]
Consequential amendments
5.10 The new definitions of 'contract' and 'party' render the separate
provisions concerning covenants redundant. As a result, those provisions
are repealed and other provisions are amended as required to remove any
remaining references to covenants. [Schedule 5, items 2-17, sections 45B, 45C,
and 44ZZRQ, subsections 4(3), 45(5), 46A(6), 87(3) and 87(5), paragraphs 4F(1)(a),
6(2)(e), 87(3)(a), 87(3)(c) and 87(3)(d), and subparagraphs 4F(1)(a)(i) and 6(2)(b)(i)]
5.11 Schedule 5 also makes amendments to Schedule 1 to the Act, to
correspond to the amendments made by Schedule 2 to the Act itself and
apply those amendments to persons. [Schedule 5, items 18-20, section44ZZRQ,
subsection 45(5), section 45B and 45C of Schedule 1]
Commencement, application and transitional provisions
5.12 Schedule 5 commences at the same time as Schedule 1.
42
Chapter 6
Secondary boycotts
Outline of chapter
6.1 Schedule 6 to this Bill amends the Act to increase the maximum
penalty applying to breaches of the secondary boycott provisions. This
aligns the penalty with penalties for other breaches of the competition law.
Context of amendments
6.2 Broadly, a secondary boycott involves one person, in concert
with another person, engaging in conduct that hinders or prevents a third
person supplying goods or services to, or acquiring goods or services
from, a fourth person.
6.3 Sections 45D and 45DB prohibit secondary boycotts, where the
purpose and actual or likely effect of the conduct is respectively: to cause
substantial loss or damage to the fourth person's business; or to prevent or
substantially hinder the third person from engaging in trade or commerce
involving the movement of goods between Australia and overseas.
6.4 Section 76 details the maximum pecuniary (monetary) penalties
for breaches of the Act. Under paragraph 76(1A)(a), a corporation that
breaches the secondary boycott provisions (section 45D or 45DB) is liable
to a civil penalty not exceeding $750,000. By comparison, other breaches
of the Act attract maximum penalties of $10 million or higher depending
on the benefit obtained and the body corporate's annual turnover.
6.5 Secondary boycotts are harmful to trading freedom and therefore
harmful to competition. The Harper Review saw no reason for the
significant variation in maximum penalties, and recommended aligning
the maximum penalty for breaches of secondary boycott provisions with
the maximum penalty for other breaches of the competition law.
Summary of new law
6.6 Schedule 6 to this Bill increases the maximum pecuniary penalty
that applies for secondary boycotts, in line with the maximum penalty for
other breaches of the competition law.
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Competition and Consumer (Competition Policy Review) Bill 2016
Comparison of key features of new law and current law
New law Current law
The maximum penalty for a breach of The maximum penalty for a breach of
the secondary boycott provisions is the secondary boycott provisions is
the greatest of: $750,000.
• $10,000,000;
• three times the total value of the
benefits obtained from the
secondary boycott; or
• if the court cannot determine the
total value of these benefits, 10%
of the annual turnover of the
corporation for the twelve months
leading up to when the secondary
boycott occurred.
Detailed explanation of new law
6.7 Paragraph 76(1A)(a) provides for a separate maximum
pecuniary penalty of $750,000 for a breach of certain listed provisions.
Schedule 6 removes sections 45D and 45DB from the provisions listed in
paragraph 76(1A)(a). [Schedule 6, item 1, subsection 76(1A)(a)]
6.8 The effect of this amendment is that the maximum pecuniary
penalty for a breach of the secondary boycott provisions is instead
determined by paragraph 76(1A)(b), and is therefore the greatest of:
- $10,000,000;
- three times the total value of the benefits obtained from the
secondary boycott; or
- if the court cannot determine the total value of these benefits,
10% of the annual turnover of the corporation for the twelve
months leading up to when the secondary boycott occurred.
6.9 These amounts are a maximum penalty, and the court has
discretion to set a penalty lower than the maximum.
Commencement, application and transitional provisions
6.10 Schedule 6 commences at the same time as Schedule 1.
44
Chapter 7
Third line forcing
Outline of chapter
7.1 Schedule 7 to this Bill amends the Act to prohibit third line
forcing only where it has the purpose, effect or likely effect of
substantially lessening competition.
Context of amendments
7.2 Third line forcing is a form of exclusive dealing (also known as
a vertical trading restriction) and involves the supply of goods or services,
or the giving of a particular price or discount, on the condition that the
purchaser also acquire goods or services from another unrelated person, or
a refusal to supply because the purchaser will not agree to such a
condition.
7.3 Third line forcing is prohibited under subsections 47(6)
and 47(7) and paragraphs 47(8)(c) and 47(9)(d) of the Act. It is prohibited
on a per se basis, that is, it is prohibited irrespective of its purpose, effect
or likely effect.
7.4 Third line forcing may be exempted from the prohibition, and
protected from legal action under the Act, for example, by filing a
notification with the Commission under section 93 of the Act. The
Commission may revoke the notification if it considers that the likely
public detriment from the conduct outweighs the likely any public benefit
from the conduct.
7.5 Australia is the only comparable jurisdiction that prohibits third
line forcing on a per se basis. Other jurisdictions, including the United
States, Canada, the European Union and New Zealand, assess similar
conduct under a test that looks at the effect of the conduct on competition.
7.6 The Harper Review noted that third line forcing is similar to
second line forcing, in which a corporation supplies a product on the
condition that the purchaser acquires another product from the same
corporation (or a related corporation). Second line forcing is also known
as 'bundling' or 'tying', and is not prohibited on a per se basis. Rather, it
is prohibited where the conduct has the purpose, effect or likely effect of
substantially lessening competition.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
7.7 The Harper Review found there was no need for third line
forcing to be prohibited on a per se basis and singled out from other forms
of vertical trading restriction which are subject to a competition test. The
Harper Review acknowledged the availability of an exemption through
the notification process, but found that the regulatory cost of lodging a
notification is unnecessary, because in most cases the notification will be
allowed.
7.8 The Harper Review recommended that third line forcing be
prohibited only where the conduct has the purpose, effect or likely effect
of substantially lessening competition.
Summary of new law
7.9 Schedule 7 to this Bill amends section 47 of the Act so that third
line forcing is only prohibited where it has the purpose, effect or likely
effect of substantially lessening competition.
Comparison of key features of new law and current law
New law Current law
Third line forcing is prohibited only Third line forcing is prohibited on a
where it has the purpose, effect or per se basis.
likely effect of substantially lessening
competition.
Detailed explanation of new law
7.10 Subsection 47(1) of the Act prohibits a corporation engaging in
exclusive dealing in trade or commerce. Subsections 47(2) to 47(9) set out
various forms of conduct which constitute exclusive dealing, including
third line forcing in subsections 47(6) and 47(7) and paragraphs 47(8)(c)
and 47(9)(d).
7.11 Subsection 47(10) provides that the forms of exclusive dealing
listed in that subsection are only prohibited where they have the purpose,
effect or likely effect of substantially lessening competition. Forms of
exclusive dealing not listed in subsection 47(10) are prohibited on a per se
basis.
7.12 Schedule 7 amends subsection 47(10) so that all forms of
exclusive dealing are prohibited where the conduct has the purpose, effect
46
Third line forcing
or likely effect of substantially lessening competition. The references to
the specific types of exclusive dealing conduct to which the test currently
applies are removed. [Schedule 7, item 1, subsection 47(10)]
7.13 As all third line forcing conduct is now subject to a substantial
lessening of competition test, Schedule 9 makes consequential
amendments to the notification provisions. These amendments are
detailed in Chapter 9, and ensure the grounds on which the Commission is
able to consider a notification are consistent for all forms of exclusive
dealing that may be notified.
7.14 Following the amendment to the provisions for notification of
exclusive dealing, subsection 47(10A), which specifically deals with
notifications for third line forcing, is repealed. [Schedule 7, item 4, subsection
47(10A)]
Consequential amendments
7.15 Schedule 7 makes a minor amendment to the wording in
paragraphs 47(10)(a) and 47(10(b). References to 'that conduct' have
been changed to 'the conduct that constitutes the practices of exclusive
dealing', to make clear that the 'practice' referred to in subsection 47(1) is
also 'conduct'. [Schedule 7, items 2 and 3, paragraphs 47(10(a) and 47(10)(b)]
7.16 Schedule 7 also makes amendments to Schedule 1 to the Act, to
correspond to the amendments made by Schedule 7 to the Act itself and
apply those amendments to persons. [Schedule 7, items 5-8, subsections 47(10)
and 47(10A) and paragraph s47(10(a) and 47(10)(b) of Schedule 1 to the Act]
Commencement, application and transitional provisions
7.17 Schedule 7 commences at the same time as Schedule 1.
47
Chapter 8
Resale price maintenance
Outline of chapter
8.1 Schedule 8 to this Bill amends the resale price maintenance
(RPM) and notification provisions to allow a corporation or person to
notify the Commission of RPM conduct, as an alternative to seeking
authorisation from the Commission for RPM conduct.
8.2 Schedule 8 also provides an exemption from the RPM
prohibition for conduct between related bodies corporate.
Context of amendments
8.3 Broadly, RPM involves the supply of goods on the condition
that the goods not be sold below a price specified by the supplier. RPM is
a form of vertical restraint concerning resale prices, and is prohibited
under section 48 on a per se basis. Section 96 specifies conduct that
constitutes RPM.
8.4 The Harper Review noted that RPM may have varied impacts on
competition. In some circumstances, RPM may facilitate anti-competitive
collusion. However, RPM will not have a substantial effect on
competition in a market if the good or service is subject to strong
competition. RPM may be pro-competitive and beneficial for consumers
where, for example, it creates an incentive for retailers to invest in training
their staff on the use of a complex product.
8.5 The Harper Review also noted that RPM is becoming more
commonplace in online markets, which are an increasingly significant part
of the economy. A number of online business models now use distribution
arrangements which may constitute RPM, but provide benefits such as
expanding the range of product sold in Australia.
8.6 The Commission may grant authorisation for RPM conduct
where it would result in a net public benefit. Authorisation for RPM has
been available since 1995, but is seldom used relative to authorisations for
other prohibited conduct. The Harper Review noted a concern that the cost
and delay of the authorisation process is a deterrent to businesses seeking
exemption for a retailing or distribution strategy involving RPM,
particularly where this would delay the launch of a new product.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
8.7 Notification is available for other forms of vertical restriction,
including third line forcing, but is not available for RPM. Notification is
generally a quicker and less expensive means of obtaining an exemption.
8.8 The Harper Review considered it prudent to retain a per se
prohibition on RPM, but recommended that notification be made available
for RPM. The Panel noted that the Commission could withdraw the
exemption if it considered that the anti-competitive harm of the conduct
outweighed any public benefit.
8.9 The Harper Review also recommended that the prohibition on
RPM should not apply to related bodies corporate.
Summary of new law
8.10 Schedule 8 amends the resale price maintenance and notification
provisions to allow a corporation or person to notify the Commission of
RPM conduct, as an alternative to seeking authorisation from the
Commission for RPM conduct.
8.11 Schedule 8also provides an exemption from the RPM
prohibition for conduct between related bodies corporate.
Comparison of key features of new law and current law
New law Current law
A corporation or other person may Notification is not available for RPM
notify the Commission of RPM conduct.
conduct.
Actions between related bodies Acts between related bodies corporate
corporate do not constitute engaging may constitute engaging in RPM
in RPM conduct. conduct.
Detailed explanation of new law
Notification
8.12 Schedule 8 amends section 48 to provide that the prohibition
against RPM does not apply to a corporation or other person engaging in
conduct that constitutes RPM if the corporation or other person has given
50
Resale price maintenance
the Commission a notice under section 93(1), and that notice is in force.
[Schedule 8, items 1 and 2, subsections 48(1) and 48(2)]
8.13 Section 93 is renamed to indicate that notification is now
available under that section for RPM conduct. Subsection 93(1) sets out
the types of conduct or proposed conduct for which a corporation or other
person may give a notice to the Commission. Schedule 8 amends
subsection 93(1) to include conduct of the kind referred to in section 48
(that is, RPM). The subsection is also split into two paragraphs for
simplification. [Schedule 8, items 3 to 5, Subdivision A of Division 2 of Part VII,
subsection 93(1)]
8.14 Subsection 93(3A), which allows the Commission to give a
written notice to revoke a notification if it is satisfied that the public
benefits of the notified conduct will not outweigh the detriments, is also
amended to incorporate conduct of the kind referred to in section 48.
[Schedule 8, item 9, paragraph 93(3A)(a)]
8.15 Subsection 93(7A) is amended so that subsection 93(1) notices
for conduct referred to in section 48 come into force:
- at the end of the period of 60 days, or such other period as is
prescribed by the regulations, starting on the day when the
corporation or other person gave the Commission notice; or
- if the Commission gives notice to the corporation or other
person under subsection 93A(2) during that period - when the
Commission decides not to give the corporation or other person
a notice under subsection 93(3A). [Schedule 8, item 13,
subsection 93(7A)]
8.16 The latter timing applies where, within the initial 60 day or
otherwise prescribed period, the Commission issues a draft notice
proposing to revoke a notification under subsection 93(3A) and invites the
corporation and other interested persons to request a conference with the
Commission (under subsection 93A(2)) but then decides not to give a
notice under subsection 93(3A).
8.17 Subsections 93(7B) and 93(7C), respectively outline when
certain types of notifications do not come into force or cease to be in
force. Each of these subsections is amended to apply to conduct under
section 48 (that is, RPM). [Schedule 8, items 14 and 16, subsections 93(7B) and
93(7C)]
8.18 Section 48 applies to a 'corporation or other person', and so
provisions of section 93 relating to section 48 are amended to refer to a
'corporation or other person'. Provisions within section 93 relating to
other sections of the Act remain applicable to corporations only. The
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
application of these other sections to persons occurs through the operation
of Schedule 1 to the Act. [Schedule 8, items 6, 7, 8, 10, 11, 15, 17, 18, 19 and 20,
subsections 93(2), 93(3A), 93(5), 93(6), 93(10) and 93A(2), paragraphs 93(2)(a),
93(3A)(a), 93(7C)(b), 93(8)(a) and 93(8)(b) and subparagraphs 93(7B)(b)(i) and
93(7B)(b)(ii)]
8.19 Section 93 is further amended by Schedule 9 to allow the
Commission to impose conditions on a notification for RPM conduct. If
the Commission reasonably believes that it would have grounds to give
the corporation or person a notice under subsection 93(3A) (that the
conduct is not approved), but that those grounds would not exist if
particular conditions relating to the proposed conduct were complied with,
then the Commission may impose those conditions. [Schedule 9, item 7,
section 93AAA]
8.20 If the Commission is satisfied that the corporation or other
person has failed to comply with those conditions, the Commission may at
any time revoke the RPM notification by issuing a written notice that sets
out the reasons the Commission is so satisfied. [Schedule 9, item 6, subsection
93(3B)]
8.21 The decision of the Commission to impose conditions on a
notification given under section 93 is subject to Tribunal review. If the
person satisfies the Tribunal either that the Commission would not have
had grounds to object to the notice under subsection 93(3A), or that the
conditions imposed would not have addressed those grounds, the Tribunal
must set aside the notice. If the Tribunal is not so satisfied, it must affirm
the notice. [Schedule 9, item 25, subsection 105(5AAB)]
8.22 The decision of the Commission to revoke a notification, on the
basis that a person has not complied with conditions, is also subject to
Tribunal review. If a person satisfies the Tribunal that they have in fact
complied with the conditions, the Tribunal must set aside the notice
revoking the notification. If the Tribunal is not so satisfied, it must affirm
the notice. [Schedule 9, item 25, subsection 105(5AAA)]
8.23 Further amendments to the notification provisions are made by
Schedule 9 and detailed below in Chapter 9.
Related bodies corporate
8.24 A new subsection is added to section 96, so that the actions
listed in subsection 96(3) do not constitute engaging in RPM if the
supplier and second person are related bodies corporate. [Schedule 8, item 21,
subsection 96(8)]
8.25 This change reflects the general tenet of competition law that
companies within a corporate group are treated as a single economic
52
Resale price maintenance
entity and are not considered to be competitors. This also brings section
48 in line with the prohibitions in sections 45 and 47, which do not apply
to trading arrangements entered into between related companies.
Consequential amendments
8.26 Schedule 8 makes a number of consequential amendments as a
result of providing for notification in respect of RPM, including to provide
that certain elements of section 93 should only apply to notification for
exclusive dealing, and not to RPM. [Schedule 8, items 2 and 12, subsections 48(2)
and 93(7)]
8.27 As a result of the repeal of the price-signalling provisions
detailed in Chapter 3, notification is no longer required for
price-signalling and section 93 is amended to remove any reference to
those provisions. [Schedule 8, items 5, 9, 13, 14 and 16, subsections 93(1), 93(7A),
93(7B), and 93(7C) and paragraph 93(3A)(a)]
8.28 As a result of the removal of the per se prohibition on third line
forcing, and the change to a competition-based test as detailed in
Chapter 7, third line forcing is removed from the subsections of section 93
which detail additional or different requirements for conduct notified
under specified sections only. [Schedule 8, items 9, 13, 14 and 16, subsections
93(7A), 93(7B), 93(7C) and paragraph 93(3A)(a)]
8.29 Schedule 8 also makes amendments to Schedule 1 to the Act
corresponding with amendments made to the Act itself by Schedule 8.
These amendments to Schedule 1 of the Act apply the Schedule 8 changes
to persons. [Schedule 8, items 22 and 23, section 48 of Schedule 1 to the Act]
Commencement, application and transitional provisions
8.30 Schedule 8 commences at the same time as Schedule 1.
53
Chapter 9
Authorisations, notifications and class
exemptions
Outline of chapter
9.1 Schedule 9 to this Bill amends Part VII and Part IX of the Act
to:
• consolidate the various authorisation provisions, including
those relating to mergers, into a single authorisation process;
• grant the Commission a 'class exemption' power;
• allow the Commission to impose conditions on notifications
for resale price maintenance and collective bargaining that
involves collective boycott conduct;
• grant the Commission a power to issue a 'stop notice'
requiring collective boycott conduct that is the subject of a
notification to cease; and
• provide for Tribunal review of Commission merger
authorisation determinations.
Context of amendments
9.2 Part VII of the Act covers authorisations (Division 1),
notifications (Division 2) and merger clearances and authorisations
(Division 3). While these processes have different features, each provides
an exemption from the application of Part IV of the Act.
Simplification
9.3 The Harper Review considered that the authorisations and
notifications provisions were unnecessarily complex, generating excessive
regulatory and administrative costs and creating a focus on technicalities
over issues of substance.
9.4 The Harper Review recommended two principal changes to
simplify the authorisations and notifications provisions:
55
Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• ensuring that only a single authorisation application is
required for a single business arrangement or transaction; and
• empowering the Commission to grant authorisation on the
basis that the conduct would not be likely to substantially
lessen competition.
Mergers
9.5 Submissions to the Harper Review raised concerns about the
Commission's formal merger clearance process and the merger
authorisation processes undertaken by the Tribunal. A merger clearance
can only be granted if the Commission is satisfied that the merger will not
substantially lessen competition. A merger authorisation can only be
granted if the Tribunal is satisfied that there will be net public benefits
from the merger.
9.6 The Harper Review noted that the formal clearance process has
not been used since it was introduced in 2007, and that the merger
authorisation process has been used only a few times since it was
reformed in 2007.
9.7 Unlike authorisations for other conduct prohibited under Part IV,
the Commission is not currently the decision-maker at first instance for
merger authorisations. Instead, the Tribunal makes the decision at first
instance and there is no avenue for review of these decisions other than
seeking judicial review by the Federal Court.
9.8 The Harper Review recommended combining the formal
clearance process with the merger authorisation process to create a single,
streamlined authorisation process with the following features:
• the Commission should be the decision-maker at first
instance (as it is better suited to undertaking investigations);
• the Commission should be empowered to authorise a merger
if satisfied the merger would not substantially lessen
competition or would result, or be likely to result, in a net
public benefit;
• the formal process should not be subject to prescriptive
information requirements, but the Commission should be
empowered to require the production of business and market
information;
56
Authorisations, notifications and class exemptions
• the formal process should be subject to strict timelines that
cannot be extended except with the consent of the merger
parties;
• decisions of the Commission should be subject to review by
the Tribunal under a process that is also governed by strict
timelines; and
• the review by the Tribunal should be based upon the material
that was before the Commission, but the Tribunal should
have the discretion to allow a party to adduce further
evidence, or to call and question a witness, if the Tribunal is
satisfied there is sufficient reason.
Class exemptions
9.9 The Harper Review recommended granting the Commission the
power to issue a 'class exemption' for business practices (types or kinds
of conduct) that are unlikely to generate competition concerns, or are
likely to generate a net public benefit. Such exemptions would remove the
need to make individual applications by creating 'safe harbours' for
business and thereby reduce compliance and administration costs and
increase certainty.
Collective Bargaining
9.10 Collective bargaining by businesses may be detrimental to
competition and consumer welfare. Such behaviour may allow firms to
exploit consumers, force out competition, and reduce general economic
welfare. The same is true of collective boycotts, where a bargaining group
refuses to deal with suppliers or customers. However, in certain
circumstances collective bargaining conduct can be beneficial for
competition. Similarly, in some circumstances a collective boycott can be
an appropriate and useful tool to support collective bargaining.
9.11 For example, small businesses will typically have less
bargaining power than one large supplier, putting them at a disadvantage
in individual negotiations. By negotiating as a collective, small business
may be able to negotiate with bargaining power equal to a larger firm, and
achieve a more efficient and pro-competitive outcome.
9.12 The Harper Review considered that the collective bargaining
notification process is potentially of significant benefit to small business
and could be more widely used. It recommended reforms to introduce
greater flexibility into the collective bargaining notification process,
including:
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• enabling notifications to cover future members of the
bargaining group and multiple counterparties;
• enabling the Commission to impose conditions on
notifications involving collective boycotts;
• extending the time allowed for the Commission to consider
notifications involving collective boycotts before they come
into force; and
• giving the Commission a 'stop power' to require collective
boycotts to cease in exceptional circumstances.
Summary of new law
9.13 Schedule 9 simplifies the various authorisation provisions into a
single authorisation provision that allows the Commission to authorise
conduct that would otherwise be prohibited under Part IV.
9.14 Schedule 9also repeals the formal merger clearance and
authorisation processes contained in Division 3 of Part VII. Mergers will
now be subject to the general authorisation process in section 88. Among
other things, this means the decision-maker at first instance for merger
authorisations will change from the Tribunal to the Commission.
9.15 Schedule 9 introduces a 'class exemption' power, allowing the
Commission to exempt conduct or categories of conduct if it is unlikely to
raise competition concerns or is likely to generate net public benefits.
9.16 Schedule 9 also amends the notification process for collective
bargaining, including by allowing the Commission to impose conditions
on notifications which include collective boycott activity, and granting the
Commission the power to issue a 'stop notice' requiring collective boycott
conduct to cease.
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Authorisations, notifications and class exemptions
Comparison of key features of new law and current law
New law Current law
The Commission can grant an The Commission can grant an
authorisation if it is satisfied that authorisation only if it is satisfied the
conduct: conduct is likely to result in a net
- will not (or is not likely to) public benefit.
substantially lessen competition or
- is likely to result in a net public
benefit.
There is a single authorisation There are separate authorisation
provision for all types of provisions applying to mergers and
authorisations, with some procedural other types of authorisations.
differences between merger and
non-merger authorisations.
The decision-maker at first instance The decision-maker at first instance
for merger authorisations is the for merger authorisations is the
Commission. Tribunal.
No separate merger clearance The Commission can grant a merger
provision. clearance if it is satisfied the merger
will not (or is not likely to)
substantially lessen competition.
The Commission's determination on The Tribunal's determination on a
a merger authorisation is subject to merger authorisation is not subject to
merits review by the Tribunal. merits review.
The Commission may impose The Commission can only approve or
conditions on collective boycott and reject collective boycott notifications.
RPM notifications. Notification is not available for RPM
conduct.
A collective boycott must cease when There is no provision for a 'stop
the Commission gives a 'stop notice'. notice'.
Detailed explanation of new law
Repeal of the formal merger clearance and authorisation processes
9.17 Schedule 9 broadly adopts the recommendations of the Harper
Review in relation to merger authorisations, with some slight differences
in detail as discussed below.
9.18 Schedule 9 repeals the existing Division 3 of Part VII. This
includes the formal merger clearance process, and the separate merger
authorisation process. [Schedule 9, item 22, Division 3 of Part VII]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
9.19 The general authorisation provisions are amended to incorporate
merger authorisations and also to simplify the provisions.
9.20 The following paragraphs outline the authorisation process as
applicable to all authorisations, followed by detail of several provisions
which are specific to merger authorisations.
Simplification of the general authorisation process
9.21 Schedule 9 significantly simplifies the authorisation provisions
by removing separate provisions applicable to specific types of
authorisations, and instead including a single provision under which
conduct may be authorised (section 88) and a single test for authorisation
(section 90).
9.22 The following paragraphs explain the operation of the amended
provisions, which apply to all types of authorisations (both merger and
non-merger). Except as described below, these amendments are not
intended to change the authorisation process itself. Rather, they are
intended to reduce the complexity of the provisions of the Act that set out
the authorisation process.
Power to grant authorisation
9.23 Section 88 no longer contains several provisions allowing
authorisation to be granted for different types of conduct prohibited by
Part IV. Instead, subsection 88(1) allows the Commission to grant an
authorisation to a person to engage in conduct to which one or more
provisions of Part IV would or might apply. This power is discretionary
and is exercisable on application by a person. [Schedule 9, item 1, subsection
88(1)]
9.24 The power to grant authorisation under section 88(1) now
extends to conduct under section 46 (misuse of market power) and
section 50 (mergers).
9.25 The Commission may grant a single authorisation for several
types of conduct, or separate authorisations for any of the conduct to
which the application relates. [Schedule 9, item 1, subsection 88(5)]
9.26 'Engage in conduct' is defined in subsection 4(2) of the Act as
'doing or refusing to do any act'. Although subsection 4(2) of the Act
does not expressly include the acquisition of shares or assets, these are
'acts' and mergers may now be authorised under section 88 on the basis
that sections 50 or 50A, which are contained in Part IV, would or might
apply to such acquisitions.
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Authorisations, notifications and class exemptions
9.27 The Commission may still only prospectively authorise conduct.
The Commission does not have the power to grant authorisation for past
conduct, that is, conduct (including mergers) engaged in before the
Commission determined the application for authorisation. This replaces
the former subsections 88(6B), (8D) and (12) with a general rule for all
types of authorisation. [Schedule 9, item 1, subsection 88(6)]
Authorisation subject to conditions
9.28 The Commission may continue to grant an authorisation subject
to conditions specified in the authorisation, and the protection of an
authorisation does not apply if any of the conditions are not complied
with. [Schedule 9, item 1, subsection 88(3)]
9.29 For example, where a merger authorisation is granted on the
basis of a condition that is to be complied with before the merger takes
place, and the merger is completed without the condition having been
complied with, the merger will not be in accordance with the
authorisation. This means the merger will not benefit from the protection
afforded by the authorisation and the merger may contravene section 50.
9.30 The ability to grant an authorisation subject to conditions allows
the 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.
Effect of an authorisation
9.31 While an authorisation is in force, the provisions of Part IV
specified in the authorisation do not apply to the conduct specified in the
authorisation, to the extent it is engaged in by:
• the applicant;
• any other person named or referred to in the application as a
person who is engaged in, or proposed to be engaged in, the
conduct; and
• any particular person or class of persons, as specified in the
authorisation, who become engaged in the conduct.
[Schedule 9, item 1, subsection 88(2)]
9.32 An authorisation provides protection only for the conduct and
provisions specified in that authorisation. This protection does not extend
to conduct not specified in the authorisation or to provisions of Part IV
that may also apply to the conduct but which have not been specified in
the authorisation.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Applications for authorisation
9.33 An application for authorisation must specify both the relevant
conduct that is to be engaged in, and the provisions of Part IV that would
or might apply to the specified conduct. [Schedule 9, item 1, subsection 88(1)]
9.34 Where a single application for authorisation deals with a merger
and other conduct under Part IV, the application is only considered to be a
'merger authorisation' insofar as it relates to the merger. Where the
procedure for merger authorisations differs from the procedure for
non-merger authorisations, the procedure applicable to each type of
authorisation applies to the corresponding component of the authorisation.
9.35 The requirements for an application for authorisation (including
a minor variation, revocation or revocation and substitution) are set out in
subsection 89(1). Schedule 9 to the Bill removes the requirement that the
application must be in the form prescribed by the regulations, and instead
requires that the application be in the form approved by the Commission
in writing. An application must be accompanied by any other information
or documents required by the form. [Schedule 9, item 77, paragraph 89(1)(a)]
9.36 This change introduces greater flexibility into the authorisation
process by allowing the Commission to determine which information is
likely to be required to assess proposed conduct.
9.37 The application fee will continue to be prescribed by the
regulations.
9.38 The applicant may withdraw their application for authorisation
at any time, by writing to the Commission. [Schedule 9, item 1, subsection
88(7)]
Test for authorisation
9.39 Section 90 is amended to incorporate merger authorisations and
simplify the provision. It no longer contains separate tests for granting
authorisation for different types of conduct prohibited by Part IV.
9.40 Subsection 90(7) now contains a single 'authorisation test'
which applies to all types of authorisations. The new test provides that the
Commission must not grant an authorisation unless it is satisfied in all the
circumstances either:
• that the conduct would not have the effect, or would not be
likely to have the effect, of substantially lessening
competition; or
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• that the conduct would result, or be likely to result, in a
benefit to the public which would outweigh the detriment to
the public that would result, or be likely to result, from the
conduct. [Schedule 9, item 3, subsection 90(7)]
9.41 The first limb of the test is a new basis for granting
authorisation. The second limb is consistent with the tests previously
contained in section 90.
9.42 Section 90(8) specifies that the first limb is not applicable to the
extent that the conduct specified in an application for authorisation is
prohibited on a per se basis. [Schedule 9, item 3, subsection 90(8)]
9.43 This means that authorisations for cartel conduct (Division 1 of
Part IV), secondary boycotts (sections 45D or 45DB) or resale price
maintenance (section 48) may only be granted if the Commission is
satisfied of the second limb of the test.
9.44 This avoids a mismatch between the basis on which the conduct
is prohibited, which does not look to whether the purpose, effect or likely
effect of the conduct is a substantial lessening of competition, and the
basis on which authorisation for that conduct may be granted.
9.45 Subsections 90(8A), (8B) and (9), which contain specific tests
for authorisation of dual-listed company arrangements and overseas
mergers, are repealed. [Schedule 9, item 3, subsections 90(8A) to 90(9)]
Power to seek additional information
9.46 Currently, the Commission may consult with interested parties
before making an authorisation determination. Under section 90(2), it is
required to take all submissions received from the applicant, the
Commonwealth, a State or any other person into account.
9.47 The new subsection 90(6) replaces 90(2) and explicitly provides
that the Commission may invite written submissions from interested
persons within a specified period, and give the applicant or another person
written notice to provide further or particular information, or consult with
persons as reasonable and appropriate. The Commission may consult with
persons as it considers reasonable and appropriate [Schedule 9, item 3,
subsection 90(6)]
9.48 The new subsection 90(6A) provides that before making its
determination, the Commission must take into account submissions and
information received under subsection 90(6) within the period specified in
the written notice (if any), but is not required to take into account
submissions and information received after the specified period. This does
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
not prevent the Commission taking such information into consideration if
it wishes to do so. [Schedule 9, item 3, subsection 90(6A)]
Period for consideration and default determination
9.49 Schedule 9 does not change the period for consideration, or
default determination, of a non-merger application. Under subsection
90(10), if the Commission does not determine an application for a
non-merger application within the 'relevant period' (as set out in
subsection 90(10A)), it is taken to have granted the authorisation.
Tribunal review of general authorisations
9.50 Currently, a person dissatisfied with a Commission authorisation
determination may apply to the Tribunal for a review under section 101 of
the Act. Schedule 9 continues the position that the Tribunal conducts a
rehearing of non-merger authorisations. [Schedule 9, item 118,
subsection 101(2)]
Minor variation, revocation, and revocation and substitution
9.51 Sections 91A, 91B and 91C, respectively, deal with minor
variations, revocation, and revocation and substitution of an authorisation.
Schedule 9 sets out powers of the Commission and the requirements
related to these processes. The powers and requirements are broadly
consistent with those that apply for the original application for
authorisation.
9.52 Subsection 91A(4) is amended so that the test for granting a
minor variation of an authorisation corresponds to the new test applying to
the original grant of authorisation.
9.53 If the Commission granted the authorisation on the grounds (in
paragraph 90(7)(a)) that the conduct would not, or would not be likely to
substantially lessen competition, then it must not grant the minor variation
unless it is satisfied in all the circumstances that the variation would not,
or would not be likely to increase the extent to which the conduct lessens
competition. [Schedule 9, item 92, paragraph 91A(4)(a)]
9.54 If the Commission granted the authorisation on the grounds (in
paragraph 90(7)(b)) that the conduct would, or would be likely to generate
a net public benefit, then it must not grant the minor variation unless it is
satisfied in all the circumstances that the variation would not, or would
not be likely to, reduce the net public benefit of the conduct. [Schedule 9,
item 92, paragraph 91A(4)(b)]
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Authorisations, notifications and class exemptions
9.55 Subsection 91A(4A) makes clear that this test does not require
the Commission to complete a fresh assessment of the conduct in its
entirety. The Commission need not have regard to conduct that is
unaffected by the variation. This is intended to ensure the focus is on the
effect of the minor variation, and to ensure applications for minor
variations can be efficiently determined by the Commission. [Schedule 9,
item 92, subsection 91A(4A)]
9.56 Prior to making its determination in relation to a minor variation,
revocation or revocation and substitution of an authorisation the
Commission may seek additional information from, or consult with,
persons in accordance with subsection 90(6). The requirements for the
Commission to consult in relation to a minor variation, revocation or
revocation and substitution of an authorisation are included elsewhere in
sections 91A, 91B and 91B. [Schedule 9, items 92 to 94, subsections 91A(2A),
91B(3A), 91B(3B), 91C(3A) and 91C(3B)]
9.57 Subsections 91A(3), 91B(4) and 91C(4) respectively set out the
information the Commission must consider before it may make a
determination granting or refusing a minor variation, revocation or
revocation and substitution. Where the Commission seeks certain
information within a specified period, because of the application of
subsection 90(6) to section 91A, 91B or 91C, the Commission is only
required to consider information received within that period. The
Commission may consider late information if it wishes to do so.
[Schedule 9, items 92 to 94, subsections 91A(3), 91B(4) and 91C(4)]
9.58 The tests for revocation and revocation and substitution of an
authorisation remain the same, although minor amendments are made
within sections 91B and 91C to reflect the other amendments made by
Schedule 9 (such as the move to a single test for authorisation under
subsection 90(7)). [Schedule 9, items 93 and 98, subsections 91B(5) and 91C( 7)]
Merger authorisations
9.59 The paragraphs below refer to merger authorisations generally,
except where they distinguish between domestic and overseas merger
authorisation.
New defined terms
9.60 The definition of 'clearance' is repealed, as merger clearances
no longer exist under the Act. [Schedule 9, item 28, subsection 4(1)]
9.61 Similarly, the definition of 'authorisation' is amended to reflect
the repeal of Division 3 of Part VII. [Schedule 9, item 27, subsection 4(1)]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
9.62 Definitions are inserted into subsection 4(1), to distinguish
between a 'merger authorisation' and an 'overseas merger authorisation'.
[Schedule 9, item 29, subsection 4(1)]
9.63 A merger authorisation is defined as:
• an authorisation for a person to engage in conduct to which
section 50 or 50A would or might apply; but
• not authorisation for a person to engage in conduct to which
any provision of Part IV, other than section 50 or section
50A, would or might apply. [Schedule 9, item 29, subsection 4(1)]
9.64 An overseas merger authorisation is defined to mean a merger
authorisation that is not an authorisation for conduct to which section 50
would or might apply. By implication, a merger authorisation that is not
an overseas merger authorisation is a 'domestic merger authorisation'.
[Schedule 9, item 29, subsection 4(1)]
9.65 A domestic merger authorisation is an authorisation that is not
an overseas merger authorisation. [Schedule 9, item 122, paragraph
102(1AA)(1)(a)]
Authorisation subject to conditions
9.66 The Commission may make it a condition of granting a merger
authorisation that a person must give, and comply with, an undertaking
under section 87B. If the person does not comply with this condition, the
protection of the merger authorisation will not apply. Subsection 87B(4)
sets out additional consequences for failure to comply with a section 87B
undertaking. [Schedule 9, item 1, subsection 88(4)]
9.67 The application form for a merger application, as approved by
the Commission, may contain a section 87B undertaking not to make the
acquisition while the Commission is considering the application. [Schedule
9, item 78, subsection 89(1AA)]
Period for consideration and default determinations
9.68 Given their commercial sensitivity, the Act sets shorter
timeframes for considering merger authorisations than for non-merger
authorisations. Schedule 9 preserves the existing period for consideration
of a domestic merger authorisation, as well as the default position in the
event the Commission has not made a determination by the end of that
period.
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Authorisations, notifications and class exemptions
9.69 Under subsection 90(10B), the Commission has 90 days to
determine a domestic merger authorisation, beginning on the day the
Commission receives the application. [Schedule 9, item 82, subsection 90(10B)]
9.70 The 90 day period may be extended under subsection 90(12) if
the applicant informs the Commission in writing, before the end of the
initial 90 day period (or other base period as applicable), that they agree to
the Commission taking a specified longer period. [Schedule 9, item 84,
subsection 90(12)]
9.71 If the Commission has not determined an application for a
domestic merger authorisation by the end of the 90 day period (or the
longer period, if extended under subsection 90(12)), the Commission is
taken to have refused the application. [Schedule 9, item 82, subsection 90(10B)]
9.72 Similarly, no changes are made to the timing for, or default
decision on, overseas merger authorisations under subsection 90(11). The
Commission continues to have 30 days, from the day on which the
application is received, to determine the application. If the Commission
has not determined an application for an overseas merger authorisation by
the end of the 30 day period, the Commission is taken to have granted the
application.
Period for determining minor variations, revocations or revocation and
substitutions of domestic merger authorisations
9.73 Subsections 90(10B), 90(12) and 90(13) carry over the timing
for determining an original application for a domestic merger
authorisation to an application for a minor variation, revocation or
revocation and substitution of that domestic merger authorisation.
[Schedule 9, items 82, 92, 93 and 99, subsections 91A(5), 91B(5) and 91C(7A)]
9.74 This means that the Commission will be deemed to have refused
to grant the minor variation, revocation or revocation and substitution if it
has not determined the application within 90 days (or longer period if
extended in accordance with those subsections).
9.75 This does not apply in relation to overseas merger
authorisations.
Tribunal review of merger authorisations
9.76 The Tribunal may review a determination of the Commission in
relation to:
• an application for a merger authorisation;
• an application for a minor variation of a merger authorisation;
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• an application for, or the Commission's proposal for, the revocation
of a merger authorisation; and
• an application for, or the Commission's proposal for, the revocation
of a merger authorisation and the substitution of another merger
authorisation. [Schedule 9, items 118 and 128, subsections 101(2) and 102(8)]
9.77 Under subsection 101(2), the Tribunal's review is not a
rehearing of the matter where it relates to a determination of any of these
applications. [Schedule 9, item 118, subsection 101(2)]
9.78 Subsection 102(10) provides that when conducting a review in
relation to a domestic merger authorisation, the Tribunal must not have
regard to any information, documents or evidence other than:
• information referred to in the Commission's reasons for its
determination;
• any information or report given to the Tribunal under
subsection 102(6);
• the information, documents or evidence referred to in
subsection 102(7);
• information given to the Tribunal as a result of the Tribunal
seeking such information, and consulting with such persons,
as it considers reasonable and appropriate for the sole
purpose of clarifying the information, documents or evidence
referred to in subsection 102(7); and
• any information, documents or evidence referred to in
subsection 102(9). [Schedule 9, item 128, subsection 102(10)]
9.79 Subsection 102(9) grants the Tribunal a power to allow a person
to provide new information, documents or evidence that the Tribunal is
satisfied was not in existence at the time of the Commission's
determination. This allows the Tribunal to take account of a change in
circumstances that has occurred since the Commission's determination.
For example, if there is a new entry to the relevant market after the
Commission's determination is made, the Tribunal may allow a person to
provide new information about the entrant so this change in circumstances
can be taken into account in the Tribunal's review. [Schedule 9, item 128,
subsection 102(9)]
9.80 The limitations on the information that may be considered by the
Tribunal appropriately balance the interests of all parties to a review of a
merger authorisation matter. In particular, they are intended to ensure that
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Authorisations, notifications and class exemptions
applicants for merger authorisation provide the Commission with all
relevant material at the time of the application, and do not delay
production of that material until later in the process or until Tribunal
review. The limitations also facilitate the Tribunal conducting its review
expeditiously, given the time sensitive nature of merger transactions.
9.81 Subsection 102(9) ensures that the parties to an application for
review are not unfairly prejudiced by the limitations of the Tribunal
review where there is genuinely new relevant information, documents or
evidence that was not in existence at the time of the Commission's
determination.
9.82 Subsection 102(1AA) provides that the Tribunal must determine
an application for review of a domestic merger authorisation within the
relevant period. This 'relevant period' is 90 days, beginning on the day
the Tribunal receives the application, unless:
• the Tribunal allows new information, documents or evidence
under subsection 102(9), in which case the period is extended
to 120 days. This extension allows the Tribunal sufficient
time to consider the new material.; or
• the Tribunal determines in writing before the end of the
initial 90 or 120 day period (as applicable) that the matter
cannot be dealt with properly within that initial period, either
due to its complexity or other special circumstances, and that
an extended period of up to a further 90 days in addition to
the initial period applies. [Schedule 9, item 122, subsections
102(1AA), 102(1AC) and 102(1AD)]
9.83 If the Tribunal determines to extend its period of consideration
under subsection 102(1AD), it must notify the applicant and the
Commission of the determination before the end of the initial 90 or 120
day period (as applicable). [Schedule 9, item 122, paragraph 102(1AD)]
9.84 If the Tribunal does not make a determination on a domestic
merger authorisation matter within the applicable period, it is taken to
have affirmed the Commission's determination. [Schedule 9, item 122,
subsection 102(1AB)]
9.85 Schedule 9 continues the requirement that the Tribunal must
make a determination on the review of overseas merger authorisations
within 60 days unless it considers that the matter cannot be dealt with
properly within that period (in accordance with subsection 102(1AA)).
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Providing false or misleading information
9.86 A new section 92 replaces former section 95AZN. Section 92
prohibits a person giving false or misleading information to the
Commission or Tribunal under Division 1 of Part VII or Part XIB, in
connection with:
• an application for merger authorisation;
• an application for a minor variation of a merger
authorisation;
• an application for, or the Commission's proposal for, the
revocation or revocation and substitution of a merger
authorisation; or
• the Tribunal's review in relation to any of the above
applications or proposals. [Schedule 9, item 100, subsection 92(1)]
9.87 Section 92 will be contravened where a person is negligent as to
whether the information is false or misleading in a material particular. The
requirement of negligence will also be satisfied by proof that the person
knew, or was reckless as to whether, the information was false or
misleading in a material particular. [Schedule 9, item 100, subsection 92(2)]
9.88 Consequential amendments are made throughout the Act to
replace references to section 95AZN with references to section 92.
[Schedule 9, items 54-62, 69 and 72, sections 76A and 76B, subsections 75B(1), 76A(2),
76B(2) to 76B(4), paragraphs 76(1A)(c), 76(1B)(a),76B(5)(a), 81A(1)(d) and 89(1)(a),
and subparagraph 76(1)(a)(iii)]
Class exemption power
9.89 Schedule 9 inserts a new Division 3 of Part VII that allows the
Commission to create class exemptions for particular kinds of conduct, so
as to create 'safe harbours' for business and thereby reduce compliance
and administration costs associated with individual authorisations.
[Schedule 9, item 22, Division 3 of Part VII]
9.90 The new subsection 95AA grants the Commission a power to
determine that one or more specified provisions of Part IV do not apply to
conduct of a kind specified in the determination. [Schedule 9, item 22, section
95AA]
9.91 Parties will need to self-assess whether their conduct falls within
a class exemption.
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Authorisations, notifications and class exemptions
Test for determination of a class exemption
9.92 The Commission may only determine a class exemption if it is
satisfied in all the circumstances that conduct of that type satisfies one
limb of the two-limb test in subsection 95AA(1). That is, that the conduct
of that kind would:
• not have the effect or would not be likely to have the effect,
of substantially lessening competition; or
• result, or be likely to result, in a benefit to the public which
would outweigh the detriment that would result, or be likely
to result, from the conduct. [Schedule 9, item 22, subsection
95AA(1)]
9.93 This test for the Commission to determine a class exemption is
therefore the same as the test that the Commission would apply when
authorising a particular instance of conduct. Parties will need to self-
assess whether their conduct falls within a particular class exemption.
Form of a class exemption
9.94 A class exemption is a legislative instrument within the meaning
of section 8 of the Legislation Act 2003, and must be registered on the
Federal Register of Legislation. [Schedule 9, item 22, subsection 95AA(1)]
9.95 Under subsection 33(3) of the Acts Interpretation Act 1901, the
Commission's power to make a class exemption includes a power to
revoke or vary a class exemption. The power to revoke or vary a class
exemption is subject to the same conditions as the power to make the
initial class exemption, including that the Commission must be satisfied
with respect to the matters listed in subsection 95AA(1). [Schedule 9, item
22, note at subsection 95AA(1)]
9.96 It is expected that the Commission will conduct appropriate
consultation prior to any decision to vary or revoke a class exemption.
When a class exemption commences and ceases to be in force
9.97 A class exemption enters into force on the day it is made or a
later date as specified in the determination. A class exemption remains in
force until the end of the period specified in the determination, or until the
Commission revokes the determination (whichever is earliest). [Schedule 9,
item 22, subsection 95AA(4)]
9.98 To ensure that class exemptions remain relevant and appropriate,
the Commission's determination must specify a period for which the class
exemption is to be in force. This period cannot be more than 10 years,
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
which is consistent with the general rule in the Legislation Act 2003 that
legislative instruments automatically 'sunset' after they have been in force
for 10 years. [Schedule 9, item 22, subsection 95AA(3)]
Limitation and withdrawal of the benefit of a class exemption
9.99 A class exemption exempts 'conduct of a kind' rather than a
particular instance of that conduct. As a result, the Commission may not
be made aware of, be able to anticipate, every circumstance of future
conduct to which the exemption may apply before it determines a class
exemption. As a result, there may be some circumstances in which it
would not be appropriate for particular conduct to be exempted, despite
falling within the class exemption.
9.100 Where the Commission does identify particular circumstances in
which a class exemption should not apply, it may specify a number of
limitations. These limitations allow the Commission to restrict the
application of the class exemption to:
• persons of a specified kind;
• circumstances of a specified kind;
• conduct that complies with specified conditions.
[Schedule 9, item 22, subsection 95AA(2)]
9.101 Where the Commission later forms the view, based on the facts
and circumstances of a particular case, that the class exemption should not
apply in that particular case, section 95AB allows the Commission to
withdraw the benefit of a class exemption in that if it is satisfied that the
particular conduct would not meet either of the two limbs of the test in
subsection 95AA(1). [Schedule 9, item 22, subsection 95AB(1)]
9.102 To withdraw the benefit of the class exemption in a particular
case, the Commission must give a person written notice and must, in or
with the notice, give a written statement of its reasons for withdrawing the
benefit of the class exemption. [Schedule 9, item 22, subsections 95AB(1) and
95AB(2)]
9.103 A notice of withdrawal comes into force when the Commission
gives it to the person, and therefore the benefit of a class exemption can
only be withdrawn on a prospective basis. The Commission cannot
retrospectively withdraw the benefit of a class exemption. [Schedule 9,
item 22, paragraph 95AB(4)(a)]
9.104 While a notice of withdrawal is in force, the class exemption
does not apply to the specified conduct engaged in by the recipient of the
notice. [Schedule 9, item 22, subsection 95AC(3)]
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Authorisations, notifications and class exemptions
9.105 A notice of withdrawal ceases to be in force (and the benefit of
the class exemption is reinstated) at the earliest of the following times:
• if the Tribunal sets aside the notice under subsection
102(5G), at the end of the day the Tribunal sets it aside;
• when the Commission revokes the notice; or
• the time the specified under subsection 95AA(3).
[Schedule 9, item 22, paragraph 95AB(4)(b)]
Tribunal review in relation to a class exemption
9.106 As a class exemption is a legislative instrument, it is subject to
disallowance by Parliament. The Commission's decision to determine the
class exemption is not subject to merits review by the Tribunal.
9.107 However, the Commission's decision to withdraw the benefit of
a class exemption in a particular case is reviewable by the Tribunal. A
person dissatisfied with the giving of a notice under section 95AB may
apply to the Tribunal for a review. An application for review must be
made within the time prescribed under the regulations. The Tribunal must
review the giving of the notice if the applicant for review is the recipient
of the notice or the Tribunal is satisfied the person has a sufficient interest.
[Schedule 9, item 23, subsection 101B]
9.108 The Tribunal must make a determination setting aside the notice
of withdrawal if the applicant for review satisfies the Tribunal that the
conduct specified in the notice of withdrawal would satisfy one of the
limbs of the test in subsection 95AA(1). [Schedule 9, item 26, paragraph
102(5G)(a)]
9.109 If the Tribunal is not so satisfied, then it must make a
determination affirming the Commission's notice of withdrawal.
[Schedule 9, item 26, paragraph 102(5G)(b)]
Collective bargaining notifications and collective boycott conduct
9.110 Schedule 9 makes a number of changes to the provisions related
to the notification of collective bargaining and collective boycotts, in
order to make the notification process easier and allow greater flexibility
in the bargaining process, particularly for small businesses.
New defined term
9.111 A definition of collective boycott conduct is inserted into
subsection 4(1), to mean conduct that has a purpose referred to in
subsection 44ZZRD(3) in relation to a contract, arrangement or
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
understanding. This definition applies across the Act, wherever there is a
reference to 'collective boycott conduct'. [Schedule 9, item 29, subsection 4(1)]
Scope of a collective bargaining notification
9.112 A corporation may give a notification of collective bargaining
conduct, if the requirements of section 93AB are satisfied. A notice of
collective bargaining may include collective boycott conduct. [Schedule 9,
item 17, paragraph 93AD(1)(a)]
9.113 A new subsection 93AB(7A) is inserted, to allow the protection
of a collective bargaining notice to extend to include people who join the
bargaining group after the notice is given to the Commission. However,
future members are only covered if the notice is expressed in such a way
as to allow future members, and if those future members could have given
the notice on their own behalf at the time they became members of the
collective bargaining group. [Schedule 9, items 14 and 17 to 19, subsections
93AD(3)(note) and 93AB(7A), and paragraphs 93AD(1)(a) and 93AD(3)(c)]
9.114 This means that, at the time of joining the bargaining group, the
relevant future member(s) must meet the requirements set out in
section 93AB.
9.115 These amendments ensure that the protection afforded by a
collective bargaining notification can be appropriately extended if the
membership of the bargaining group changes.
9.116 Amendments are also made throughout section 93AB to allow
one notice by the bargaining group to deal with multiple counterparties.
This removes the need for the group to give the Commission separate
notices for each counterparty it intends to deal with. [Schedule 9, items 8 to
13, subsections 93AB(2) to 93AB(4) and paragraphs 93AB(4)(a) and 93AB(4)(b)]
Commission may impose conditions on a collective bargaining
notification
9.117 Schedule 9 also adds a new section 93ACA, to allow the
Commission to impose conditions on collective bargaining notifications
which wholly or partially relate to collective boycott conduct. [Schedule 9,
item 16, subsection 93ACA(1)]
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Authorisations, notifications and class exemptions
9.118 The Commission may only impose conditions where it
reasonably believes that it would have grounds to issue an objection
notice relating to the collective bargaining notification, but that those
grounds would not exist if particular conditions relating to the proposed
conduct were complied with. The Commission may only impose
conditions that would remove the grounds for issuing an objection notice.
[Schedule 9, item 16, subsection 93ACA(1)]
9.119 The Commission must impose the conditions by written notice,
and must give the corporation a written statement of its reasons for
imposing the conditions. [Schedule 9, item 16, subsection 93ACA(2)]
9.120 The Commission's decision to impose conditions on a collective
bargaining notice (which includes collective boycott conduct) is
reviewable by the Tribunal. If the person satisfies the Tribunal either that
the Commission would not have had grounds to object to the notice, or
that the conditions imposed would not have addressed those grounds, the
Tribunal must set aside the notice. If the Tribunal is not so satisfied, it
must affirm the notice. [Schedule 9, item 26, subsection 102(5D)]
9.121 If the Commission imposes conditions on a collective bargaining
notice which includes collective boycott conduct, and the Commission is
satisfied the corporation has failed to comply with those conditions, the
Commission may give the corporation an objection notice. [Schedule 9, item
15, subsection 93AC(2A)]
9.122 If the Commission gives an objection notice under subsection
93AC(2A), this is reviewable by the Tribunal. If the Tribunal is satisfied
that the person did not fail to comply with the conditions, it must set aside
the objection notice and the notification remains effective. If the Tribunal
is not so satisfied, it must affirm the objection notice. [Schedule 9, item 25,
subsection 102(5AB)]
When a collective bargaining notice commences and ceases to be in force
9.123 A collective bargaining notice, which does not relate to
collective boycott conduct, comes into force 14 days after the corporation
gives the Commission the notice. The regulations may prescribe a longer
or shorter period than this. [Schedule 9, item 17, paragraph 93AD(1)(a)]
9.124 Where a collective bargaining notice incorporates collective
boycott conduct, it will come into force 60 days after the corporation gave
the Commission the notice. The regulations may prescribe a longer or
shorter period. This longer period recognises the greater level of harm that
may be caused by collective boycott activity and the need to allow the
Commission a longer period to consult with relevant parties and to
consider the proposed conduct and whether to object to the notice.
[Schedule 9, item 17, paragraph 93AD(1)(a)]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
9.125 A collective bargaining notice ceases to be in force at the earliest
of the following times:
• When it is withdrawn or taken to be withdrawn; or
• If the Commission gives the Corporation an objection notice,
31 days after the 'relevant day' (as set out in subsection
93AD(4)) or a later day specified in writing by the
Commission; or
• At the end of:
- The period of three years, beginning on the day the
corporation gave the collective bargaining notice; or
- An alternative period determined by the Commission
under subsection 93AD(5). [Schedule 9, item 18, paragraph
93AD(3)(c)]
9.126 New subsection 93AD(5) allows the Commission to determine
an alternative period for a collective bargaining notice to expire, if it
determines that the 3 year period is not appropriate in all the
circumstances. The alternative period set by the Commission may be any
period up to 10 years, beginning on the day the corporation gives the
Commission the collective bargaining notice. The Commission must give
the corporation a written notice determining the alternative period and
stating its reasons. [Schedule 9, item 20, subsections 93AD(5) and 93AD(6)]
9.127 The Commission's decision to set an alternate period under
subsection 93AD(5) is reviewable by the Tribunal. If the Tribunal is
satisfied that the default period of 3 years is appropriate in all the
circumstances, or the alternate period set by the Commission is not
appropriate in all the circumstances, it must set aside the notice under
subsection 93AD(5). If it is not so satisfied, it must affirm the notice.
[Schedule 9, item 26, subsection 102(5E)]
Stop notices for collective boycott activity
9.128 Where a corporation has given the Commission a notice of
collective bargaining that relates to collective boycott conduct, and that
notice remains in force, Schedule 9 grants the Commission a power to
issue a 'stop notice' requiring the collective boycott conduct to cease.
[Schedule 9, item 21, section 93AG]
9.129 A stop notice may only be given by the Commission where the
following conditions are met:
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Authorisations, notifications and class exemptions
• there has been a material change of circumstances since the
Commission previously gave a stop notice (if applicable) or
since the collective bargaining notice came into force; and
• the Commission reasonably believes that:
- the collective boycott conduct has resulted in serious
detriment to the public; or
- serious detriment to the public is imminent as a result of
the collective boycott conduct. [Schedule 9, item 21, subsection
93AG(1)]
9.130 This ensures that once a notification is in force, the Commission
has the flexibility to respond to changing circumstances where the conduct
poses harm which is different to, or greater than, the actual or likely harm
that was apparent at the time of the notification. This allows the
Commission to intervene and stop serious, harmful conduct while it
prepares a final objection or conditions notice.
9.131 The Commission must, at the time it gives the corporation the
stop notice, give the corporation a written statement of its reasons for
giving the stop notice. [Schedule 9, item 21,subsection 93AG(2)]
9.132 The effect of a stop notice is that the collective bargaining
notification is taken not to be in force under section 93AD and that the
legal protection available for a collective boycott is temporarily
suspended, to the extent the notification relates to collective boycott
conduct. [Schedule 9, item 21, subsection 93AG(3)]
9.133 Despite a stop notice, collective bargaining may continue whilst
the collective bargaining notification remains in force, provided it does
not involve collective boycott conduct.
9.134 The stop notice comes into force at the time the Commission
gives the corporation the stop notice. [Schedule 9, item 21, subsection 93AG(4)]
9.135 The Commission may extend a stop notice by up to 90 days, if it
is satisfied that in all the circumstances it is reasonable to do so. If the
Commission extends the stop notice, it must do so by giving the
corporation a written notice which must include, or be accompanied by, a
written statement of the Commission's reasons for the extension. [Schedule
9, item 21, subsections 93AG(7) and 93AG(8)]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
9.136 The stop notice ceases to be in force at the earliest of the
following times:
- the end of 90 days (or the end of up to 180 days, if the
Commission extends the stop notice); or
- when the Commission issues a final objection notice under
subsections 93AC(1) or 93AC(2); or
- when the Commission issues notice under subsection 93ACA(1)
imposing conditions; or
- when the Commission withdraws the stop notice (if it is
withdrawn). [Schedule 9, item 21, subsection 93AG(5)]
9.137 The Commission's decision to issue a stop notice is not
reviewable by the Tribunal. This is because a stop notice can only be
issued in order to prevent actual or imminent serious detriment to the
public. The prevention of such detriment would be undermined by a
merits review process, which would divert the Commission's resources
away from assessing the conduct itself and onto the review. The lack of
merits review is appropriate as a stop notice can only be in place for a
maximum of 90 days before the Commission must either: extend the
notice, issue a final objection notice or final conditions notice, or
withdraw the stop notice. A final objection notice or final conditions
notice is reviewable by the Tribunal.
9.138 The Commission's decision to extend the stop notice is
reviewable by the Tribunal under subsection 102(5F). If the applicant for
review satisfies the Tribunal that in all the circumstances it was not
reasonable to extend the stop notice, the Tribunal must make a
determination setting aside the notice of extension. If the Tribunal is not
so satisfied, it must make a determination affirming the notice of
extension. [Schedule 9, item 26, subsection 102(5F)]
Consequential amendments
Notification amendments
9.139 As detailed in Chapter 8, Schedule 9 makes consequential
amendments to the notification provisions of Part VII to reflect related
amendments detailed in this Chapter, Chapter 7 and Chapter 8 (allowing
notification for RPM, allowing for conditions to be imposed on RPM
notifications, and simplifying the assessment of all forms of exclusive
dealing under a single test).
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Authorisations, notifications and class exemptions
Radiocommunications Act 1992
9.140 Schedule 9 also makes consequential amendments to provisions
within Part 3.2 (Spectrum Licences) and Part 3.3 (Apparatus Licences) of
the Radiocommunications Act 1992, to update references to provisions in
the Competition and Consumer Act 2010 (the Act) which are amended by
Schedule 9. [Schedule 9, items 164-167, sections 68A, 71A, 106A and 114A of the
Radiocommunications Act 1992].
9.141 Sections 68A, 71A, 106A and 114A of the
Radiocommunications Act 1992 currently refer to section 50 and
subsections 81(1) and (1A) of the Act. However, since 2006 those
provisions of the Radiocommunications Act 1992 have incorrectly
referred to authorisation provisions related to section 50A (overseas
acquisitions) following amendments made by the Trade Practices
Legislation Amendment Act (No. 1) 2006. Consequential amendments to
the Radiocommunications Act 1992 were overlooked at that time.
9.142 Those sections are repealed and re-written with reference to
Parts VII and IX of the Act. Firstly, certain actions (the issue of, and
authorisations under, a spectrum licence or apparatus licence) are deemed
to be an 'acquisition' and 'conduct' for the purposes of certain provisions
of the Act. Secondly, those provisions of the Act are specified as section
50, subsections 81(1) and (1A), and Parts VII and IX to the extent that the
provisions of those Parts relate to section 50.
9.143 This ensures that where certain actions under the
Radiocommunications Act 1992 are brought within the scope of the
prohibition in section 50 of the Act, an authorisation may be sought in
relation to those actions.
Other consequential amendments
9.144 Schedule 9 makes a number of consequential amendments
throughout the Act to update references in the Act to new, amended or
repealed provisions of Part VII. [Schedule 9, items 5, 30-53, 63-68, 70, 71, 73-76,
80, 81, 83, 85-91, 95-97, 101-105, 107-117, 119-121, 123-127, 129-145, Part VII
(heading), Division 1 of Part VII (heading), Division 1 of Part IX (heading) and
Division 3 of Part IX, sections 29P, 45EA, 81A, 93AA, 101A, 102A, 150J, 157AA and
174, subsections 8A(6), 90(9A), 25(1), 44ZZRS(1), 45(6A), 45(9), 45D(1), 45DA(1),
45DB(1), 45E(8), 46A(6), 49(1), 50(1), 50(2), 50(5), 80AC(1), 80AC(2), 81A(3), 81A(6),
87B(1A), 87ZP(1), 90(5), 90(10), 90(11), 90(12), 90(13), 90(15), 90A(1), 91(2A), 91C(5),
93(3A), 93(4), 93(5), 93(6), 93(7C), 93(9), 93AB(1), 93A(1), 93A(3), 93A(4), 93A(10A),
101(1A), 101(1C), 102(1), 102(5AC), 109(1A), 163(5), 165(3A), 172(2B), 172(3) and
174(2), paragraphs 44ZZR(1)(b), 44ZZRS(2)(a), 44ZZRT(1)(b), 44ZZRT(2)(b), 45(6)(a),
50(4)(b), 50(4)(c), 50(4)(d), 80AC(1)(b), 80AC(1)(d), 80AC(1)(e), 81A(1)(b), 81A(1)(e),
81A(1)(f), 90B(2)(c), 91C(6)(a), 93(1A)(a), 93(7A)(b), 93(10)(a), 93AB(6)(a), 95(1)(ga),
101(1B)(a), 102(1A)(a), 102(1A)(b), 102(1A)(c), 157(1)(a), 157(1)(ba), 165(1)(a) and
170(3)(a), subparagraphs 44ZZRS(2)(b)(i), 45(6)(b)(i), 93(7B)(b)(ii), 155(2)(b)(iv) and
170(3(b)(ii) and sub-subparagraph 102(4)(a)(ii)(B)]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
9.145 Schedule 9 also makes consequential amendments to Schedule 1
to the Act corresponding with amendments made to the Act itself by
Schedule 9 (where applicable). [Schedule 9, items 146-163, section 45EA,
subsections 44ZZRS(1), 45(6A), 45(9), 45D(1), 45DA(1), 45E(8), 50(1) and 50(5),
paragraphs 44ZZRR(1)(b), 44ZZRS(2)(a), 44ZZRT(1)(b), 44ZZRT(2)(b), 45(6)(a),
50(4)(b), 50(4)(c) and 50(4)(d) and subparagraphs 44ZZRS(2)(b)(i) and 45(6)(b)(i) of
Schedule 1 to the Act]
Commencement, application and transitional provisions
9.146 Items 1 to 103 of Schedule 9 commence at the same time as
Schedule 1. Item 104 commences immediately after items 1 to 103.
Items 105 to 132 commence at the same time as Schedule 1. Item 133
commences immediately after Schedule 1. Items 134 to 163 commence at
the same time as Schedule 1.
80
Chapter 10
Admissions of fact
Outline of chapter
10.1 Schedule 10 to this Bill extends section 83 of the Act so that a
party bringing certain proceedings may rely on both admissions of fact
and findings of fact made in certain other proceedings.
Context of amendments
10.2 Consumers or businesses harmed by a contravention of the
competition law can seek relief by commencing a private action before the
Federal Court (for example, a person may commence an action for
damages under section 82).
10.3 Section 83 of the Act is intended to facilitate private actions by
enabling findings of fact made in certain proceedings against a
corporation to be used as prima facie evidence against that corporation in
certain other proceedings. For example, if the Commission brings an
action against a corporation seeking pecuniary penalties under section 77
or an injunction under section 80 for a contravention of the Act, and
during that proceeding the court makes a finding of fact, that finding may
be relied upon by a person later bringing a private action.
10.4 This mechanism helps to reduce the cost of private actions, as a
person relying on a previous finding of fact as prima facie evidence does
not need to establish that fact.
10.5 Many proceedings brought by the Commission are resolved by a
corporation making admissions of fact that establish the contravention.
However, it is uncertain whether section 83 also applies to admissions of
fact, and the extent to which litigants in subsequent proceedings may rely
on these admissions.
10.6 The Harper Review noted this lack of clarity was an impediment
to the right to private enforcement of the competition law, and
recommended amending section 83 to clarify that it applies to admissions
of fact as well as findings of fact. This would enhance the effectiveness of
section 83 as a means of reducing the cost of private actions, and thereby
facilitating access to justice.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Summary of new law
10.7 Schedule 10 amends section 83 so that a party bringing certain
proceedings (such as an action for damages under section 82) may rely on
both admissions of fact and findings of fact made in certain other
proceedings (such as an action by the Commission seeking pecuniary
penalties under section 77 or an injunction under section 80).
Comparison of key features of new law and current law
New law Current law
Admissions of fact made by a person, Findings of fact made by a court in
and findings of fact made by a court, certain proceedings against a person
in certain proceedings against a may be used in certain other
person may be used in certain other proceedings against that person under
proceedings against that person under the Act.
the Act.
Detailed explanation of new law
10.8 The scope of section 83 is broadened so that where a person has
made an admission of fact in certain proceedings against that person, and
that person was found in those proceedings to have contravened or been
involved in a contravention of certain provisions of the Act, that
admission can be used as prima facie evidence of that fact in certain other
proceedings against that person. [Schedule 10, item 1, subsection 83(1)]
10.9 An admission of fact can only be used against the person who
made the admission. [Schedule 10, item 1, subsection 83(1)]
10.10 Both admissions of fact and findings of fact may be proved by a
document under the seal of the court from which the finding or admission
appears. Admissions of fact may also be proved by a document from
which the admission appears that is filed in the court. [Schedule 10, item 1,
subsection 83(2)]
10.11 Subsections 83(1) and (2) together ensure that admissions
cannot be relied upon as prima facie evidence in subsequent proceedings
unless they have first been tested by a court and have therefore been taken
into consideration in that court finding that the person contravened or was
involved in a contravention of the Act.
10.12 As with findings of fact, an admission of fact proved in
accordance with subsection 83(2) is only prima facie evidence of that fact,
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Admissions of fact
meaning that the defendant is not precluded from producing contrary
evidence to disprove that fact.
10.13 Section 83 is also rewritten for simplification. The operation of
section 83 is not intended to change except as detailed in this Chapter.
[Schedule 10, item 1, section 83]
Commencement, application and transitional provisions
10.14 Schedule 10 commences at the same time as Schedule 1.
10.15 The amendments made by Schedule 10 only apply to admissions
of fact made on or after the commencement of the application provision in
Schedule 10. Admissions of fact made prior to the commencement of this
provision may not be relied on in subsequent proceedings, irrespective of
whether the proceedings commenced before or after the commencement
of Schedule 10 .This preserves the context in which those admissions of
fact were made and ensures that admissions are made with knowledge of
how those admissions may be relied upon. [Schedule 10, item 2, application
provision]
83
Chapter 11
Power to obtain information, documents
and evidence
Outline of chapter
11.1 Schedule 11 to this Bill extends the Commission's power to
obtain information, documents and evidence in section 155 to cover
investigations of alleged contraventions of court enforceable undertakings
and merger authorisation determinations.
11.2 Schedule 11 also introduces a 'reasonable search' defence to the
offence of refusing or failing to comply with section 155, and increases
the fine for non-compliance with section 155.
Context of amendments
Operation of section 155
11.3 The Commission's primary investigative power is contained in
section 155. Given that the competition law is concerned with regulating
conduct which often occurs secretively, such as cartel conduct, the
Commission requires strong coercive powers to investigate and uncover
such contraventions.
11.4 A section 155 notice may be issued by the Commission in
relation to the matters specified in subsection 155(1), and may require a
person to furnish information to the Commission, to produce documents
to the Commission, or to appear before the Commission to give evidence
and produce documents.
11.5 Under subsection 155(5), a person shall not refuse or fail to
comply with a notice, or knowingly provide false or misleading evidence
or information. Subsection 155(6A) makes it an offence to contravene
subsection 155(5), and sets out the applicable maximum fine or term of
imprisonment upon conviction.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Scope of section 155
11.6 The Commission may accept a court-enforceable undertaking
under section 87B of the Act, or section 218 of the Australian Consumer
Law (Schedule 2 to the Act).
11.7 A section 155 notice may be issued by the Commission in
relation to a range of matters that are specified in subsection 155(1). The
investigation of an alleged contravention of a court-enforceable
undertaking is not currently a matter in relation to which a section 155
notice may be issued.
11.8 The Harper Review recommended extending section 155 to
cover the investigation of alleged contraventions of court-enforceable
undertakings (that is, a breach of one or more terms of such an
undertaking).
11.9 The Harper Review considered that the ability to gather
information about a possible contravention of an undertaking accepted by
the Commission would assist in protecting the integrity of undertakings as
part of the broader compliance and enforcement framework.
Search for documents
11.10 As noted by the Harper Review, section 155 notices have been a
longstanding element of Australia's competition law. The power to
compel the production of evidence, information and documents is crucial
to the Commission's administration and enforcement of the Act.
11.11 However, in the digital age, businesses retain many more
documents, such as emails, than in the past. Strict compliance with a
section 155 notice may require an electronic search of tens of thousands of
documents, which can constitute a significant compliance cost.
11.12 In recognition of the increasing cost of documentary searches,
courts have modified the rights of discovery in recent years. For example,
the Federal Court Rules 2011 require a party to undertake a 'reasonable
search' for documents. Under the Rules, in making a reasonable search,
consideration may be given to factors such as the number of documents to
be searched and the ease and cost of retrieving a document.
11.13 In light of these developments, the Harper Review
recommended introducing a 'reasonable search' defence to the offence of
a 'refusal or failure to comply' with a section 155 notice.
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Power to obtain information, documents and evidence
Penalty for non-compliance with section 155
11.14 Subsection 155(6A) currently sets out that the maximum fine
upon conviction for an offence under section 155 is 20 penalty units for an
individual.
11.15 Under subsection 4B(3) of the Crimes Act 1914, unless the
contrary intention appears and if the court thinks fit, the penalties for
corporations are five times that of individuals. Consequently, the
maximum pecuniary penalty under section 155 is 100 penalty units. When
applied to a corporation, this equates to a maximum fine of $18,000 (at
current penalty rates).
11.16 By comparison, the maximum pecuniary penalties for a
corporation failing or refusing to comply with similar notice-based
investigative powers are significantly higher. For example, section 63 of
the Australian Securities and Investments Commission Act 2001 applies a
maximum pecuniary penalty of 100 penalty units for individuals (which
equates to $90,000 for corporations, at current penalty rates).
11.17 The Harper Review noted that compliance with compulsory
investigative powers facilitates the Commission's ability to investigate
competition concerns, and considered that the current maximum penalty is
inadequate. It recommended that the maximum penalty for an offence
under section 155 be increased, in line with similar notice-based
evidence-gathering powers of other regulators.
Summary of new law
11.18 Section 155 is broadened, so that a notice may be issued in
relation to an alleged contravention of a court-enforceable undertaking
made to the Commission under section 87B or section 218 of the
Australian Consumer Law or in relation to an application for merger
authorisation.
11.19 A defence is introduced to section 155, so that a person who is
not aware of the requested documents after undertaking a reasonable
search is taken not to have contravened subsection 155(5).
11.20 The maximum penalty for non-compliance with a section 155
notice is increased.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Comparison of key features of new law and current law
New law Current law
If a person has refused or failed to No equivalent.
comply with a notice to produce
documents it is a defence if, after a
reasonable search, the person is not
aware of the documents.
A section 155 notice may be issued in A section 155 notice may not be
relation to alleged contraventions of issued in relation to alleged
court-enforceable undertakings given contraventions of court-enforceable
under section 87B of the Act or undertakings.
section 218 of the Australian
Consumer Law, and in relation to a
merger authorisation decision.
The maximum penalty for The maximum penalty for
non-compliance with a section 155 non-compliance with a section 155
notice is 100 penalty units or 2 years notice is 20 penalty units or 12
imprisonment (for an individual). months imprisonment (for an
individual).
Detailed explanation of new law
Scope of section 155
11.21 Schedule 11 simplifies subsection 155(1) by moving provisions
relating to the scope of section 155 to a new subsection 155(2). Schedule
11 also expands the scope of section 155 to allow the Commission to give
a notice in relation to:
• matters that constitute, or may constitute, a contravention of
the terms of an undertaking accepted under section 87B of
the Act or section 218 of the Australian Consumer Law; or
• a matter that is relevant to the Commission's decision under
subsection 90(1) in relation to a merger authorisation.
[Schedule 11, item 2, subsection 155(2)]
11.22 The inclusion of merger authorisations follows the amendments
to the merger authorisation process, as detailed in Chapter 9.
11.23 These amendments assist in protecting the integrity of
undertakings as part of the broader compliance and enforcement
framework of the Act.
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Power to obtain information, documents and evidence
'Reasonable search' defence
11.24 Schedule 11 inserts a 'reasonable search' defence into
section 155 in relation to the failure or refusal to comply with a notice
requiring the production of documents.
11.25 A person will not have contravened paragraph 155(5)(a), and
will not be guilty of an offence under subsection 155(6A), to the extent
that:
• the section 155 notice relates to producing documents;
• after a reasonable search, the person is not aware of the
documents; and
• the person provides a written response to the notice,
including a description of the scope and limitations of the
search. [Schedule 11, item 3, subsection 155(5B)]
Determining what constitutes a 'reasonable search'
11.26 In determining whether a search is reasonable, the following
factors may be taken into account:
- the nature and complexity of the matter to which the notice
relates;
- the number of documents involved;
- the ease and cost of retrieving a document, relative to the
resources of the person who was given the notice; and
- any other relevant matter. [Schedule 11, item 3, subsection 155(6)]
11.27 This list is not exhaustive and does not limit the matters that
may be taken into account in determining whether a search is reasonable.
It may be appropriate for other factors to be considered under paragraph
s155(6)(d), 'any other relevant matter'. Such a relevant matter may be, for
example, the costs of document review relative to the resources of the
person who was given the notice, or whether the Commission and the
person agreed to the scope of the search.
11.28 Whether a person has made a reasonable search is an objective
test. The defence will not be established where the recipient of a
section 155 notice subjectively decides that it is not reasonable to conduct
a search at all, or has conducted only a limited search, if this falls short of
what would objectively be considered reasonable.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Awareness of documents
11.29 The recipient of a section 155 notice may only rely on the
reasonable search defence to the extent that, after a reasonable search, the
person is not 'aware' of the documents.
11.30 The defence will not be established where the recipient of a
section 155 notice chooses not to search for a document the person is
aware exists, or chooses not to produce a document that the person is
aware exists.
Written response to the Commission
11.31 Under paragraph 155(5B)(c), a person may only rely on the
reasonable search defence if they have provided the Commission with a
written response to the section 155 notice. This written response must
include a description of the scope of the search which the person
undertook, and a description of the limitations of the search. That is, the
response must outline those factors which the person considers made it
unreasonable to search any further than they searched or made it
reasonable to limit the search in the way they did. [Schedule 11, item 3,
paragraph 155(5B)(c)]
11.32 The purpose of this requirement is to ensure the Commission has
sufficient information to make an assessment of whether it also considers
the person has conducted a reasonable search. Without this requirement,
the Commission's first opportunity to test the reasonableness of a person's
search would be in proceedings against that person relating to an offence
under subsection 155(5)(a).
Burden of proof
11.33 The defendant bears a legal burden of establishing that they have
undertaken a reasonable search, which must be discharged on the 'balance
of probabilities' (that is, the defendant must establish, on the balance of
probabilities, that they undertook a reasonable search and after that
reasonable search they were not aware of the requested documents).
[Schedule 11, item 3, note at subsection 155(5B)]
11.34 It is appropriate to cast the matter as a defence rather than as an
element of the offence, and to place a legal burden on the defendant,
because the facts amounting to a reasonable search will be peculiarly
within the knowledge of the defendant. For example, it is likely that only
a defendant will possess information such as how many documents could
possibly have been searched to find the documents the notice requested,
and how many documents were actually searched.
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Power to obtain information, documents and evidence
11.35 With this knowledge, the defendant could readily and cheaply
provide evidence to establish, on the balance of probabilities, that they
conducted a reasonable search.
11.36 By contrast, it would be extremely difficult and costly for the
prosecution to gather the same evidence through its own investigations.
This would constitute a significant hurdle for the prosecution and allow
the new defence to undermine the integrity of section 155, particularly
given the breadth of matters which may be relevant to determining
whether the search conducted by the defendant constitutes a 'reasonable
search'.
11.37 Moreover, once the defendant meets their legal burden, the
prosecution must still disprove the defence beyond a reasonable doubt in
order to establish a contravention of paragraph 155(5)(a). This is a
significantly higher standard to meet than a balance of probabilities.
11.38 The introduction of this defence, which has not previously been
available to defendants facing prosecution under section 155, is only made
possible and viable by placing the legal burden on the defendant.
Penalty for non-compliance with section 155
11.39 The maximum penalty for a contravention of section 155(5) is
increased to 100 penalty units (500 penalty units for corporations) or
imprisonment for two years. [Schedule 11, item 4, subsection 155(6A)]
11.40 This aligns the penalty under section 155 with the penalty for
non-compliance with similar notice-based evidence-gathering powers of
other regulators.
Commencement, application and transitional provisions
11.41 Schedule 11 commences at the same time as Schedule 1.
11.42 Following the commencement of Schedule 11, section 155
notices that were in force immediately before commencement continue in
force, and, with the exception of the increased penalty, the amended
section 155 applies in relation those notices as if they had been issued
under section 155 as amended. [Schedule 11, item 5, application provision]
11.43 The effect of this is to allow the 'reasonable search' defence to
be used for section 155 notices that were in force immediately before the
commencement of Schedule 11. However, the increased penalty under
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
subsection 155(6A) does not apply to notices that were served prior to the
commencement of Schedule 11. [Schedule 11, item 5, application provision]
92
Chapter 12
Access to services
Outline of chapter
12.1 Schedule 12 to this Bill amends Part IIIA of the Act, which
contains the National Access Regime (Regime), to ensure it better
promotes effective competition in dependent markets. It does this by
addressing the economic problem of an enduring lack of effective
competition in markets for nationally significant infrastructure services.
Context of amendments
The economic problem addressed by the Regime
12.2 The Regime provides a regulatory framework for third parties to
seek access to nationally significant infrastructure services that are owned
and operated by others.
12.3 The Regime promotes effective competition in dependent
markets. It achieves this by addressing the economic problem of natural
monopoly in markets for infrastructure services that face an enduring lack
of effective competition. Large, usually sunk, fixed costs and economies
of scale, which are typical characteristics of natural monopoly, can serve
as impediments to prospective competitors entering the markets.
12.4 A provider may have the ability and incentive to deny access to
a service, or restrict output and charge monopoly prices, where there is a
lack of effective competition in markets for that service. This can reduce
economic efficiency where access to the service is required for third
parties to compete effectively in dependent (upstream or downstream)
markets. As a consequence, transactions that would enhance community
wellbeing may not proceed.
12.5 The Regime provides a means of promoting competition in
dependent markets, which rely on a service provided by nationally
significant infrastructure to compete effectively. As part of this, the
Regime considers if a facility owner is earning a commercial investment
return so as not to impair investment incentives.
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The operation of the access Regime
12.6 The Regime enables third parties to seek access to nationally
significant infrastructure services. It includes Part IIIA of the Act, and
clause 6 of the Competition Principles Agreement, that sets out general
principles to assess the effectiveness of State and Territory access
regimes.
12.7 A declaration under the Regime gives an access seeker the right
to negotiate access to a service provided by means of a facility.
Declarations are therefore limited to matters that are defined as a service
under s 44B. This includes the use of an infrastructure facility, handling or
transporting goods, or a communications service.
12.8 The designated Minister is only able to make a declaration once
they have received a recommendation from the National Competition
Council (Council). The Council must be satisfied that the four declaration
criteria are met when making a recommendation to declare a service.
When considering the Council's recommendation, the Minister must be
satisfied those same four criteria are met, before deciding to declare a
service. The criteria determine when access regulation will and will not
apply, as they constrain the considerations of the Council and Minister.
Developments in the past few years
12.9 The declaration criteria have been examined in a number of
cases heard by both the Federal and High Courts. The declaration criteria
have been subject to several different interpretations in these cases, with
particular implications for how competition in dependent markets should
be assessed. For investment to continue to be made in nationally
significant infrastructure, it is important that the Regime is easily
understood, creates outcomes that are predictable and addresses the
economic problem of natural monopoly in markets for infrastructure
services.
12.10 The Regime has been reviewed three times, by the Productivity
Commission in 2001 and 2013, and then by the Harper Review in 2015.
Both the 2013 and 2015 reviews examined the application of the
declaration criteria and whether they were achieving the objectives of the
Regime. These two reviews involved extensive consultation with the
public and the States and Territories.
12.11 The Government decided in 2014 that it would respond to both
reviews following the conclusion of the Harper Review.
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12.12 The Government decided to implement all of the
recommendations of the Productivity Commission as part of its response
to the Harper Review. These amendments seek to refocus and clarify the
intent of the Regime. In particular, they seek to clarify the declaration
criteria that the Council and Minister must be satisfied of in order to
recommend that a service be declared, or declare the service, respectively.
This then determines when arbitration by the Commission will be
available to access seekers or access providers.
Summary of new law
12.13 Schedule 12 amends the Regime to ensure that it remains an
accessible and effective regulatory option, which can boost competition in
the economy and create predictable outcomes. The primary changes
included in this Schedule are:
- amend and clarify the declaration criteria that must be used by
the Council and designated Minister;
- amend the default position, whereby the Minister is now deemed
to have made a decision in accordance with the declaration
recommendation of the Council if the Minister has not
responded within 60 days; and
- amend and clarify the scope of a determination made by the
Commission to 'extend' a facility in an access dispute.
- provide the Minister with power to revoke certification on
recommendation by the Council, if the regime ceases to be
effective.
Comparison of key features of new law and current law
New law Current law
Declaration criteria
The declaration criteria that must be The declaration criteria that must be
considered by the Council and considered by the Council and
Minister are contained in a single Minister are replicated across
section. multiple sections.
The decision maker must consider Declaration criterion (a) requires the
whether access (or increased access) decision maker to consider whether
on reasonable terms and conditions as access (or increased access) would
a result of declaration would promote promote a material increase in
a material increase in competition. competition.
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New law Current law
The decision maker must consider The decision maker must consider
whether total foreseeable market whether it is uneconomical for
demand could be met by the facility anyone to develop another facility to
over the declaration period at least provide the service.
cost when compared to two or more
facilities.
No change. The decision maker must consider
whether the facility is of national
significance, having regard to its size,
importance to constitutional trade or
commerce and to the national
economy.
The decision maker must consider The decision maker must consider
whether access (or increased access) whether access (or increased access)
would promote the public interest. would not be contrary to the public
interest.
The decision maker cannot declare a The decision maker must consider
service if it is subject to an effective whether the service is subject to an
access regime. (No longer a criterion effective access regime as part of the
- now a threshold question). declaration criteria.
Power of the Minister and the Commission
The Minister may revoke the No equivalent.
certification on recommendation by
the Council, if the regime ceases to be
effective. The Council may make a
recommendation on its own initiative
or on application.
The Commission's power to make a The Commission's power to make a
determination requiring a facility determination requiring a facility
operator to extend or expand the operator to extend the facility, and the
facility, and the safeguards on that safeguards on that power, has been
power, are clarified to include interpreted to include the power to
capacity and geographical order 'expansions'.
expansions.
Default declaration decision
The Minister is taken to have The Minister is taken to have not
accepted the Council's made a declaration if they have not
recommendation if he or she does not published a decision within the 60
publish a decision on a declaration day time limit.
within the 60 day time limit
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Detailed explanation of new law
12.14 The declaration criteria are matters about which the Council and
Minister must be satisfied prior to recommending a declaration be made,
or making a declaration, respectively. Additional considerations of a
commercial, economic or other character may be relevant in determining
whether criterion (d) is met.
Simplification of declaration criteria
12.15 Schedule 12 simplifies the law by specifying in a separate
section the four declaration criteria that must be considered by both the
Council and the Minister. This makes it clearer that the Minister and the
Council must consider the same matters, and avoids duplication within the
legislation. [Schedule 12, items 1 to 2, sections 44B and 44CA]
12.16 To reflect the movement of the declaration criteria into a
separate section, sections 44G and 44H(4) provide, respectively, that the
Council cannot recommend that a service be declared unless it is satisfied
of all the declaration criteria for the service, and the designated Minister
cannot declare a service unless he or she is satisfied of all the declaration
criteria for the service. [Schedule 12, items 10and 11, sections 44G and 44H(4)]
12.17 Certain other elements of the Act are amended to reflect that the
declaration criteria the Minister and Council must consider are now in a
single provision. Councillors are now required to include in the Annual
Report prepared under section 29O details of any judicial interpretation of
the declaration criteria. [Schedule 12, items 43 and 45, subparagraphs 29O(b)(ii)
and 29O(2)(b)(ii)]
(1) The competition test (criterion (a))
12.18 Paragraph 44CA(1)(a) requires an assessment of the effect of
access (or increased access) on competition in at least one market, other
than the market for the service, as a result of a declaration. [Schedule 12,
item 2, paragraph 44CA(1)(a)]
12.19 The amendments require the Council and the Minister to
consider whether access (or increased access) on reasonable terms and
conditions as a result of declaration would promote a material increase in
competition in a market other than the market for the service. That is, the
amendments focus the test on the effect of declaration, rather than merely
assessing whether access (or increased access) would promote
competition.
12.20 This requires a comparison of two future scenarios: one in which
the service is declared and more access is available on reasonable terms
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
and conditions, and one in which no additional access is granted. That is a
comparison of either: no access without declaration compared with some
access as a result of declaration; or some access without declaration to
additional access as a result of declaration. In comparing these two
scenarios, it must be the case that it is the declaration resulting in access
(or increased access) on reasonable terms and conditions that promotes the
material increase in competition.
12.21 What are reasonable terms and conditions is not defined in the
legislation. This is an objective test that may involve consideration of
market conditions. It does not require that the Council or Minister come to
a view on the outcomes of a Part IIIA negotiation or arbitration. The
requirement that access is on reasonable terms and conditions is intended
to minimise the detriment to competition in dependent markets that may
otherwise be caused by the exploitation of monopoly power. Reasonable
terms and conditions include those necessary to protect the legitimate
interests of the owner of the facility.
(2) Total foreseeable market demand test (criterion (b))
12.22 Paragraph 44CA(1)(b) asks whether the facility that provides (or
will provide) the service could meet the total foreseeable market demand
at least cost over the declaration period. This is in comparison to a
scenario where there are two or more facilities. The amendment to this
paragraph is intended to refocus the test to a 'natural monopoly' test
instead of a 'private profitability' test. [Schedule 12, item 2, paragraph
44CA(1)(b)]
12.23 The approach under the new paragraph is market-based,
requiring the market in which the infrastructure service under application
is supplied to be defined. This includes any substitute services that serve
or will serve the market.
12.24 Total foreseeable market demand is considered over the
declaration period the decision-maker is considering for declaration of the
service. In assessing whether a facility could meet total foreseeable
market demand at least cost, this calls for a consideration of whether what
could be expected to be maximum demand could be supported by the
facility.
12.25 The requirement to assess whether a facility could meet total
foreseeable market demand 'over the period for which the service would
be declared' does not limit the Council and the Minister to consideration
of any period claimed in the application for declaration. The Council and
the Minister are to recommend and decide, respectively, what is the
appropriate period for declaration of the service.
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12.26 Because the test uses the concept of foreseeability, it is not
limited to looking at maximum demand based on current uses of the
service. Other future uses may be relevant to the consideration, if they are
foreseeable.
12.27 The time period for declaration will be relevant to considerations
of foreseeability. If the declaration period being contemplated is only
10 years, it is not necessary to consider demand for the service far beyond
that period. While it may be possible to foresee increased demand for the
service in 30 years as a result of a long-term development, it is unlikely
this demand would affect the natural monopoly status of the service
within the declaration period. The Council and the Minister may need to
consider multiple potential declaration periods in determining whether
there is an appropriate declaration period over which criterion (b) would
be met.
12.28 Whether total foreseeable market demand can be met at least
cost over the declaration period is a question of judgement informed by
facts. Consideration would be given to a comparison of the costs from the
facility in question meeting total foreseeable market demand with the
costs that would be incurred in the least costly alternative scenario.
12.29 Broadly, the alternative scenarios to be considered will depend
on whether there is a substitute service provided by another facility.
Different alternative scenarios could be considered based on whether there
are existing substitutable services or not, for example:
- if there is a substitute service provided by another facility there
are, broadly, two potential alternative scenarios: the two
substitute facilities share total foreseeable market demand; or a
third facility is built to provide part of total foreseeable market
demand; or
- if there is not a substitute service provided by another facility
there may only be one potential alternative scenario, that is the
duplication (or partial duplication) of the facility.
12.30 Paragraph 44CA(2)(a) contemplates that a facility, which is at
capacity, can be declared if it is reasonably possible for it to be extended
or expanded. However, it is not necessary for the Council and the Minister
to have regard to a facility at capacity as if it had expanded capacity, if it
is not reasonably possible for that facility to be expanded or extended.
[Schedule 12, item 2, paragraph 44CA(2)(a)]
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Determining costs of meeting total foreseeable market demand
12.31 The costs relevant to determining whether a facility can meet
total foreseeable market demand at least cost are not defined, but
specifically include the cost to the provider of the service of co-ordinating
multiple users of the facility. These co-ordination costs could include the
costs of lost production or of being allocated less of the service's capacity
as a result of the facility becoming a multi-user facility. [Schedule 12, item 2,
paragraph 44CA(2)(b)]
12.32 The costs of application for declaration should not be
considered, because those are irrelevant to whether the facility is
operating as a natural monopoly. [Schedule 12, item 2, subsection 44CA(2)]
12.33 The administrative and compliance costs that may be incurred
by the service provider as a result of the declaration would be considered
in criterion (d), as they would not be incurred if access was provided
without the declaration. Further guidance on the allocation of costs and
benefits between criterion (b) and criterion (d) is below. [Schedule 12, item 2,
subsection 44CA(3)]
12.34 To reflect the changes that have been made to criterion (b),
subsections 44F(4) and 44H(2) have been repealed. This also makes it
clear that this test will be considered once, as part of the declaration
criteria. [Schedule 12, items 7 and 11, subsections 44F(4) and 44H(2)]
(3) The national significance test (criterion (c))
12.35 Paragraph 44CA(1)(c) requires the decision maker to be
satisfied that the facility is of national significance, having regard to:
- the size of the facility;
- the importance of the facility to constitutional trade or
commerce; or
- the importance of the facility to the national economy. [Schedule
12, item 2, paragraph 44CA(1)(c)]
12.36 This test replicates, in the new subsection 44CA(1), the existing
national significance test.
(4) The public interest test (criterion (d))
12.37 Subsection 44CA(1)(d) asks if access or increased access to the
service as a result of declaration of the service, on reasonable terms and
conditions, would promote the public interest. This means that a decision
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Access to services
maker must be satisfied that declaration is likely to generate overall gains
to the community. [Schedule 12, item 2, paragraph 44CA(1)(d)]
12.38 Subsections 44CA(3)(a) and (3)(b) set out non-exhaustive
factors that decision makers are required to consider to determine the
effect of the declaration on the public interest. These include the effect of
declaration on investment in infrastructure services and dependent
markets, as well as the administrative and compliance costs incurred once
a service is declared. [Schedule 12, item 2, paragraph 44CA(3)]
12.39 Subsection 44CA(1)(d) now constitutes an additional positive
requirement which must be met before a service can be declared.
However, it is only to be considered when subsections (a), (b) and (c)
have been met, and it does not necessarily follow from this result that (d)
will also be satisfied. [Schedule 12, item 2, paragraph 44CA(1)(d)]
12.40 Criterion (d) does not call into question the results of
subsections 44CA(1)(a), (b) and (c). It accepts the results derived from the
application of those subsections, but it enquires whether, on balance,
declaration of the service would promote the public interest. It provides
for the Minister to consider any other matters that are relevant to the
public interest. [Schedule 12, item 2, paragraph 44CA(1)(d)]
Considering costs and benefits under criterion (b) and criterion (d)
12.41 The examples below provide an illustration of the allocation of
costs and benefits between criterion (b) and criterion (d), noting that the
circumstances of each case will vary and that it will not always be
appropriate or necessary to consider any or all of the costs and benefits
outlined.
Example 12.1
A mining company has built a track of rail from its mine through to the
local port. The mining company is the only user of the rail track and
does not intend for other entities to use it. A new miner now wants to
access the railway line but has been unable to enter a reasonable
commercial agreement with the line's owner.
The new miner decides to make an application for declaration of the
rail line. The line is not subject to an existing declaration or an access
undertaking and is not covered by a certified effective access regime.
In relation to criterion (b), consideration would be given to the
appropriate time period for declaration, what the demand from the new
mine will be for the service and whether other new mines or other
entities might also add to this demand. In this example, a 10 year
declaration period is considered appropriate and, because of high
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commodity prices, it is likely another two or three mines may be built
in the area which would also need access to rail transport services.
Once this has been established, consideration can be given to the costs
of meeting the demand using the existing rail line (including costs of
extending the line to the new mine or mines), compared with the costs
of this demand being met by two or more lines (the existing line
without expansion or extension and a new line).
If the demand were met by the existing line, the costs that may be
considered for the assessment of criterion (b) could include:
• the costs of changes and extensions to the facility to allow third
party access, such as physical modifications to the railway line to
increase its capacity to deal with higher demand and associated
increased maintenance costs;
• coordination costs associated with having multiple users of the
same rail line, such as the costs of putting new systems or
technologies in place to administer all freight trains; and
• opportunity costs associated with having multiple users of the
facility (and that would be incurred even if multiple users were
granted access through a commercial agreement rather than as a
result of declaration) such as:
- costs to the mining company associated with a reduction in the
total capacity of the rail line due to it becoming a multi-user
facility,
- costs arising from delays to undertaking expansions of capacity
because of the need to consult other users; and
- costs arising from delays to implementing technological
improvements because of the need for other users to also adapt
their operations.
If the demand were met by the existing line and a new line, then the
costs that may be considered for the assessment of criterion (b) could
include:
• the costs of land acquisitions,
• construction and maintenance costs for the new line;
• the costs of supporting infrastructure for the new line.
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When considering whether declaration would promote the public
interest, the Council and the Minister may have regard to a very wide
range of matters. Examples of the costs and benefits that may be
relevant to the assessment of criterion (d) may include:
• the administration and compliance costs that are associated with
complying with a declaration, such as the costs of arbitration by the
ACCC;
• environmental and social costs and benefits, such as the costs to the
local community of disruption or displacement associated with land
acquisitions, or increased employment in the region as a result of
investment in the new mine or a new rail line;
• the potential for incentives to undertake investment in other
significant infrastructure to decline because of a (real or perceived)
risk that such infrastructure will be declared; and
• the loss of investment, or reduced incentive to invest, in markets
that are dependent on access to the rail line, such as other mines, as
a result of declaration.
The above is neither a determinative nor an exhaustive list of what may
be included under the two criteria. Other costs may also be relevant,
however if they are considered under (b), then (d) should accept the
results derived from the application of that subsection, and should not
consider them again. This is also the case for any corresponding
benefits that are considered as part of the tests.
If all of the criteria in sections 44CA(1)(a) - (d) are met, it is
appropriate that the service be declared.
Example 12.2
An airport has a number of existing carriers that access its services. A
new carrier now also wants to access the airport, but has been unable to
reach a reasonable commercial agreement with the owner.
The new carrier decides to make an application for declaration of the
airport. The airport is not currently subject to declaration or an access
undertaking, and is not covered by a certified effective access regime.
In relation to criterion (b), it would be relevant to consider the
appropriate time period for declaration, and expected passenger traffic
over the period. In this example, a 10 year declaration period is
considered appropriate and, because of an increase in tourist traffic in
the area, demand for airport's services is expected to increase.
Once this has been established, consideration can be given to the costs
of meeting the demand using the existing airport (including costs of
expanding the capacity of the airport), compared with the costs of this
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demand being met by two or more airports (the existing airport without
expansion or extension and a new airport).
If the demand were met by the existing airport, the costs that may be
considered for the assessment of criterion (b) could include:
• the costs of expanding the airport to increase its capacity to deal
with higher demand, including increased maintenance costs and
transitional declines in capacity during construction;
• increased coordination costs to the airport associated with
supporting additional carriers;
• increased production costs, such as wages, of meeting total demand
for the airport's services;
• opportunity costs associated with having more users of the facility.
Some opportunity costs will have already been incurred given the
facility already has multiple users per the existing commercial
agreement. These include:
- costs arising from delays to undertaking expansions of capacity
because of the need to consult the additional users; and
- costs arising from delays to implementing technological
improvements because of the need for the new users to also
adapt their operations.
If the demand were met by the existing airport and a new airport, then
the costs that may be considered for the assessment of criterion (b)
could include:
• the costs of land acquisitions;
• construction and maintenance costs for the new airport;
• the costs of supporting infrastructure for the new airport, such as
metro lines, roads and highways.
When considering whether declaration would promote the public
interest, examples of the costs and benefits that may be relevant to the
assessment of criterion (d) may include:
• the administration and compliance costs that are associated with
complying with a declaration such as the costs of arbitration by the
ACCC;
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• environmental and social costs and benefits such as the costs to the
local community of disruption or displacement associated with land
acquisitions, increased employment in the region as a result of
investment in a new airport, costs to the local community of
increased access by carriers such as increased pollution and noise
levels;
• the potential for incentives to undertake investment in other
significant infrastructure to decline because of a (real or perceived)
risk that such infrastructure will be declared; and
• the loss of investment, or reduced incentive to invest, in markets
that are dependent on the declaration occurring, such as the
commercial facilities of the airport or hotels and resorts dependent
on increased tourism traffic from new carriers.
The above is neither a determinative nor an exhaustive list of what may
be included under the two criteria. Other costs may also be relevant,
however if they are considered under (b), then (d) should accept the
results derived from the application of that subsection, and should not
consider them again. This is also the case for any corresponding
benefits that are considered as part of the tests.
If all of the criteria in sections 44CA(1)(a) - (d) are met, it is
appropriate that the service be declared.
Dealing with submissions on an application for declaration
12.42 Subsection 44FA(4) allows the Council to make information it
receives in response to a notice issued under section 44FA publicly
available, subject to any confidentiality concerns. [Schedule 12, item 9,
subsection 44FA(4)]
Minister is taken to have made a decision in accordance with the
recommendation after 60 days
12.43 The Minister will be taken to have made a decision that is in
accordance with the declaration recommendation if they have not
published under section 44HA their decision within 60 days after
receiving a recommendation.
12.44 This means that if a decision on the declaration recommendation
has not been published within 60 days, then it will be made by default
after the period. The default decision will also be taken to be published in
accordance with section 44HA. [Schedule 12, item 12, subsection 44H(9)]
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Applications may not be made for declaration of a service where it is
subject to certain decisions
12.45 An application for declaration will now only be considered valid
if the service to be declared is not the subject of: a decision under
section 44N that the regime to which the service is subject is an effective
access regime; an access undertaking in operation under Division 6; a
decision by the Council under section 44PA(3); a 15-year no-coverage
determination or a price regulation exemption in force under the National
Gas Law (where the service is provided by means of a pipeline); or a
decision of the designated Minister in force under section 44LG. [Schedule
12, items 5 and 6, subsections 44F(1) and 44F(2)]
12.46 If the Council decides that any of these situations (set out in
section 44F(1)(a) - (e)) apply to a service in relation to which a person has
made an application for declaration, the Council must provide written
notice explaining why the situation applies and that an application cannot
therefore be made for declaration of the service. [Schedule 12, item 5,
subsection 44F(1A)]
12.47 These changes make the aforementioned situations threshold
criteria. This means that the Council is able to save on the administrative
costs of considering the application and expedite the decision making
process.
Designated Minister
12.48 Amendments have been made to section 44D to remove
ambiguity regarding who the designated Minister is where the provider is
a state or territory body. This will provide certainty in relation to decisions
to declare a service and as to whether a service is ineligible to be declared.
For example, there is currently ambiguity where the service is owned by a
state or territory body, but operated by another non-state or territory body.
The amendments mean that the designated Minister will be the
responsible state or territory Minister where the provider is a state or
territory body that has some control over the conditions for accessing the
relevant facility. [Schedule 12, items 3 and 4, paragraphs 44D(2)(a) and 44D(4)(a)]
Recommending to revoke a declaration - considering if a service is
subject to an effective access regime
12.49 Subsection 44J(2) sets out that the Council cannot recommend
revocation of a declaration unless it is satisfied that: subsection 44F(1)
would prevent the making of an application for recommendation of
declaration; or subsection 44H(4) would prevent the service concerned
from being declared. This change to subsection 44J(2) means that the
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Council is able to consider if the service in question is the subject of a
certified access regime when recommending the revocation of a
declaration. [Schedule 12, Item 13, subsection 44J(2)]
Revoking the certification that an access regime is 'effective'
12.50 Part IIIA provides that a service cannot be declared by the
designated Minister if the service is already subject to a regime that has
been certified as an effective access regime. The amendments insert new
subdivision CA to Division 2A of Part IIIA that deals with the revocation
of access regimes that have previously been certified as effective by the
Commonwealth Minister. [Schedule 12, item 20, Subdivision CA]
12.51 Subsections 44NBA(1), (5) and (6) set out that if a ministerial
decision on whether an access regime is effective under section 44N is in
effect, then the Council may on its own initiative, or on application, assess
whether to recommend that the Commonwealth Minister revoke or not
revoke their decision. [Schedule 12, item 20, subsections 44NBA(1), 44NBA(5),
44NBA(6)]
12.52 Before considering on its own initiative whether to recommend
that the Commonwealth Minister should revoke the decision, the Council
must publish, by electronic or other means, a notice to that effect, and give
a copy of the notice to the responsible Minister for the State or Territory
and to the provider of the service. It signals to the facility operator and to
the responsible Minister for the State or Territory that the Council is
considering revocation of the access regime. [Schedule 12, item 20, subsections
44NBA(2) and 44NBA(3)]
12.53 Subsection 44NBA(3) sets out that an application may be made
by a person seeking access to the service, the responsible Minister for the
State or Territory, or the provider of the service. It also sets out that the
Council must give a copy of the application to the responsible Minister for
the State or Territory and the provider of the service, unless they are the
applicant. [Schedule 12, item 20, subsection 44NBA(3)]
12.54 The purpose for reconsideration is whether the access regime
continues to be an effective access regime. Accordingly, subsection
44NBA(5) sets out that the Council must consider whether the access
regime continues to meet the principles of what is an effective access
regime. An access regime may cease to meet the definition because there
has either been a substantial change to the regime, or substantial changes
to the principles on what constitutes an effective regime. [Schedule 12, item
20, subsection 44NBA(5)]
12.55 Subsection 44NBA(4) sets out that, subject to subsection
44NBA(5), the Council's consideration of whether to make the
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recommendation must be in accordance with section 44M(4). This is to
ensure the Council's consideration of whether to make a recommendation
for revocation of certification is done in accordance with the factors that
would be relevant when it is recommending that the Minister decide that
an access regime is effective. [Schedule 12, item 20, subsections 44NBA(4) and
44NBA(5)]
12.56 The recommendations made by the Council to the
Commonwealth Minister under subsections 44NBA(6) and (7) must be in
writing. [Schedule 12, item 20, subsections 44NBA(6) and 44NBA(7)]
12.57 On receiving a recommendation, the Commonwealth Minister
must assess whether he or she should revoke the decision. The
Commonwealth Minister must make their decision in accordance with the
factors that would be relevant to whether they should make a decision that
an access regime is effective, as set out in section 44N(2). [Schedule 12, item
20, subsection 44NBC(1)]
12.58 The Commonwealth Minister must be satisfied with the
Council's assessment of whether the access regime is effective. This
requires them to consider the same factors and matters as the Council,
rather than assess the process that led the Council to the decision. [Schedule
12, item 20, subsection 44NBC(2)]
12.59 Once the Commonwealth Minister has decided if they are
satisfied or not so satisfied, then they must issue a notice in writing, either
revoking or not revoking the decision. A notice that sets out that the
Commonwealth Minister is so satisfied must specify the day on which the
decision is to cease to be in force. [Schedule 12, item 20, subsections 44NBC(3)
and 44NBC(4)]
12.60 If the Commonwealth Minister does not publish their decision in
accordance with section 44NG, within 60 days of receiving the
recommendation of the Council, they are taken to have made the decision
in accordance with the recommendation, and to have published that
decision under 44NG. [Schedule 12, item 20, subsection 44NBC(5)]
12.61 If the Commonwealth Minister has made a decision under
section 44NBC, the person who applied to the Council for the
Commonwealth Minister to make that decision, or anyone else who would
have had standing to request that the Council recommend to the
Commonwealth Minister that the decision be revoked, may apply to the
Tribunal for review of the Commonwealth Minister's decision. [Schedule
12, item 35, subsection 44O(1A)]
12.62 For the purposes of the Council's assessment of what
recommendation to make, the Council may give a person a written notice
requesting information that they consider to be relevant. The information
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Access to services
requested must be specified in the notice. The notice may specify kinds of
information that may be requested, and not just specific, precise or
itemised bits of information, provided that the Council considers it may be
relevant to deciding what recommendation to make. The notice must also
request the information be provided within a specified period. [Schedule 12,
item 20, subsections 44NBB(1)]
12.63 If the Council has given a notice to a person, they must give a
copy of this notice to the applicant, the provider of the service, and the
responsible Minister for the State or Territory. If the applicant or the
service provider is issued a notice, then the Council does not have to also
send them a copy in addition to the notice. The Council must also cause a
notice to be published by electronic or other means. [Schedule 12, item 20,
subsection 44NBB(2)]
12.64 In deciding what recommendation to make on the application,
the Council must have regard to any information that was given within the
specified time period, but at their discretion may disregard information
given after the expiration of that period. [Schedule 12, item 20, subsection
44NBB(3)]
Extensions of facilities
12.65 The Commission can make a determination in an access dispute
that requires an infrastructure service provider to extend the facility or
permit interconnection to the facility by a third party. This is separate to
the declaration process, as the Commission may only arbitrate an access
dispute after a service has been declared. There are also a number of
safeguards that restrict how the Commission may use these powers.
12.66 Various references in sections 44V, 44W and 44X are amended.
The intent of these amendments is to clarify that the Commission can
require a service provider to expand the capacity of its facility (as well as
being able to require a geographical extension) when making an access
determination. The amendments also clarify that the safeguards in sections
44W and 44X apply to directed capacity expansions. It is intended that
the Commission could require a provider to expand a facility's capacity,
whether or not it requires the provider to extend the facility's geographical
reach. [Schedule 12, items 38 to 41, subsection 44V(2), paragraphs 44W(1)(d),
44W(1)(e) and 44X(1)(e)]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Classification of decisions as legislative instruments
12.67 Subsections 44F(8), 44LG(7) and 44LI(10) have been repealed.
The effect of this is to make instruments under subsections 44F(7),
44LG(1) and 44LI(3) subject to item 19 of the table in section 6(1) of the
Legislation (Exemptions and Other Matters) Regulation 2015, consistent
with other decisions by the Minister and the NCC under Part IIIA.
[Schedule 12, items 8, 16 and 18, subsections 44F(8), 44LG(7) and 44LI(10)]
Consequential amendments
12.68 Schedule 12 makes a number of consequential amendments to
provisions of the Act as a result of moving the 'declaration criteria' to
section 44CA. [Schedule 12, items 14, 15 and 17, paragraphs 44LB(3)(b),
44LG(5)(b), 44LI(2)(a)]
12.69 Schedule 12 also makes a number of consequential amendments
to provisions of the Act as a result of the replacement of section 44F(1).
[Schedule 12, items 6, 10 and 11, subsections 44F(2), 44G(1)-(1A), (6)-(7), 44H(3)-(3A),
(6B)-(6C)]
12.70 Schedule 12 also makes a number of consequential amendments
to the provisions of the Act as a result of the insertion of the new
Subdivision CA of Division 2A of Part IIIA. [Schedule 12, items 21 to 36, 42
and 44, subsections, 44NC(1), 44NC(2), 44NC(3), 44NC(5), 44NE(1), 44NE(3),
44NF(1), 44NG(1), 44O(1), paragraphs 29O(a) and 29O(2)(a), 44NC(8)(a), 44NC(9)(a),
44NF(2)(a), 44NF(4)(a), 44NG (2)(a), 44NG(3)(a), 44ZZOAAA(3)(a), subparagraph,
44NE(6)(c)(iii)]
Commencement provisions
12.71 Schedule 12 commences on a day or days to be fixed by
Proclamation. If any of the provisions do not commence within 6 months
from the date of Royal Assent, they commence on the day after that 6
month period.
Commencement, application and transitional provisions
12.72 Schedule 12 commences at the same time as Schedule 1.
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Access to services
Declared services (Part 1 of Schedule 12)
12.73 The amendments of sections 44F to 44H made by Part 1 of
Schedule 12 apply in relation to applications made under subsection
44F(1) (as amended by Part 1 of Schedule 12) on or after the
commencement of Schedule 12. [Schedule 12, item 19, sub item 19(1)]
12.74 If, on or after the commencement of Schedule 12, a Court or
Tribunal makes a decision interpreting any of the matters mentioned in
subsection 44H(4) (as in force before that commencement), details of that
decision must be included in the annual report required to be produced by
the Councillors under section 29O. [Schedule 12, item 19, sub item 19(2)]
12.75 The amendment of section 44J made by Part 1 of Schedule 12
applies in relation to declarations made before, on or after the
commencement of this item. [Schedule 12, item 19, sub item 19(3)]
Effective access regimes (Part 2 of Schedule 12)
12.76 The amendments to effective access regimes in Part 2 of
Schedule 12 apply to all decisions under section 44N made on or after
1 January 2017. [Schedule 12, item 37]
Contingent numbering
12.77 Part 4 of Schedule 12 contains alternate numbering amendments
where commencement is contingent on whether Schedule 2 to the Public
Governance and Resources Legislation Amendment Act (No. 1) 2017
commences before this Bill. If Schedule 2 to the Public Governance and
Resources Legislation Amendment Act (No. 1) 2017 commences before
this Bill, items 42 and 43 apply. If that Schedule does not commence
before this Bill, items 44 and 45 apply. [Schedule 12, items 42-45, paragraphs
29O(a) and 29O(2)(a), subparagraphs 29O(b)(ii) and 29O(2)(b)(ii)]
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Chapter 13
Application and transitional provisions
Outline of chapter
13.1 Schedule 13 to this Bill inserts a new Division 3 into Part XIII
of the Act, which deals with the transitional application of amendments
made by a number of other Schedules to this Bill.
Context of amendments
13.2 Schedules 1 (definition of competition), 5 (covenants affecting
competition), 8 (resale price maintenance) and 9 (authorisations,
notifications and class exemptions) make amendments to the Act which
require transitional provisions to clarify how the amended provisions
apply to certain matters.
Summary of new law
13.3 Schedule 13 inserts transitional provisions dealing with:
• The application of the amended definition of 'competition';
• Existing orders under section 87 relating to contravention of
section 45B;
• Authorisations granted and in force under section 88 before
commencement;
• Applications for authorisation under section 88 made, but not
yet determined, before commencement;
• Notifications made under section 93 before commencement;
• Applications for merger clearances made, and not
determined, before commencement; and
• Applications for merger clearances granted, but not yet in
force, before commencement.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Comparison of key features of new law and current law
New law Current law
A new Division 3 is inserted into Part Transitional provisions are not
XIII of the Act, containing required.
transitional provisions related to
amendments made by other
Schedules to this Bill.
Detailed explanation of new law
13.4 Schedule 13 inserts a new Division 3 into Part XIII of the Act,
which deals with the transitional application of amendments made by a
number of other Schedules to this Bill. [Schedule 13, item 1, Division 3 of Part
XIII]
New defined terms
13.5 Schedule 13 inserts definitions of 'amended Act', 'amending
Act' and 'commencement time' into the new Division 3 of part XIII.
[Schedule 13, item 1, section 180]
13.6 Amended Act is defined to mean the Act, as amended by the
amending Act.
13.7 Amending Act is defined to mean the Competition and
Consumer (Competition Policy Review) Act 2017. References to
Schedules to the amending Act are also references to the corresponding
Schedule to this Bill.
13.8 Commencement time is defined to mean the commencement of
Schedule 1 to the amending Act.
Amended definition of 'competition'
13.9 The new section 181 provides that the definition of competition,
as amended by Schedule 1 to this Bill, applies in relation to conduct
engaged in at or after the commencement time.
Orders under section 87
13.10 A new section 182 provides that the amendments to section 87
made by Schedule 5 of the amending Act do not apply in relation to, or
affect the validity of, certain orders under section 87 relating to a
contravention of section 45B. The specific orders in question are those
114
Application and transitional provisions
made before the commencement time and in force immediately before the
commencement time. [Schedule 13, item 1, section 182]
Authorisations under section 88
13.11 A new section 183 is inserted, which addresses authorisations
under section 88.
13.12 Authorisations granted under section 88 (other than subsections
88(5) or (6A)) before the commencement time, and in force immediately
before the commencement time, continue in force (and may be dealt with)
as if they had specified the relevant section of the Act as amended by this
Bill (as set out in the relevant subparagraph of paragraph 183(1)(b)).
[Schedule 13, item 1, subsection 183(1)]
13.13 Providing that such authorisations 'may be dealt with' as if they
had been granted under the amended Act allows the provisions of the new
law to apply to procedures which may change, or otherwise relate to, the
authorisation (for example, an application for minor variation, revocation
or revocation and substitution, or a Tribunal review).
13.14 If a valid application for authorisation is made under section 88
(other than the former subsections 88(5) or 88(6A), or for a merger
authorisation or merger clearance) before the commencement time, and
the Commission has not determined the application before
commencement time, then the application is taken to be an application
made under section 88 of the amended Act. Such applications may be
dealt with as if they had been made under section 88 of the amended Act.
[Schedule 13, item 1, subsection 183(2)]
13.15 This ensures that applications for authorisation which are
pending at the commencement time may be continued under the new law,
without the need for a fresh application.
13.16 If an authorisation is granted under section 88 (other than
subsections 88(5) or 88(6A)) before the commencement time, but has not
come into force by the commencement time, then the authorisation is
taken to be granted under section 88 of the amended Act from the time it
commences. Such applications may be dealt with as if they had been made
under section 88 of the amended Act. [Schedule 13, item 1, subsection 183(3)]
Notices under section 93
13.17 A new section 184 is inserted to deal with notices under a
provision of section 93 that were in force immediately before the
commencement time. Such notices are to continue in force, and may be
dealt with, as if they had been given under section 93 as amended by
Schedule 8 to the amending Act. [Schedule 13, item 1, section 184]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Merger clearances and authorisations
13.18 A new section 185 is inserted to deal with merger clearances and
authorisations, applied for, or granted under, Division 3 of Part VII before
the commencement time.
13.19 As detailed below, the new section 185 provides a number of
general transitional rules for merger clearances and authorisations:
• existing old law merger clearances and authorisations (that is,
merger clearances and authorisations that are in force
immediately before the commencement time) are to be
treated as new law merger authorisations;
• the old law continues to apply to applications for merger
clearances and authorisations pending at commencement
(that is, applications that have not yet been determined, or
have been granted but not yet enter into force);
• the new law generally applies for review of merger clearance
determinations (unless the Tribunal has not yet made its
decision at the commencement time); and
• old law merger clearances and authorisations granted or
coming into force after commencement are to be treated as
new law merger authorisations.
13.20 Where a merger clearance or authorisation was granted before
the commencement time and in force immediately before the
commencement time, it continues in force, and may be dealt with, as if it
was granted under section 88 as amended by Schedule 9 of the amending
Act, and as if it specified section 50. [Schedule 13, item 1, subsection 185(1)]
13.21 Where a merger clearance was applied for, but not determined
before the commencement time, Subdivisions A and B of Division 3 of
Part VII (except sections 95AH, 95AL, 95AR and 95AS) continue to
apply as if they had not been repealed by the amending Act. This does not
apply where:
• a determination was made under section 95AM, refusing to
grant the clearance, before the commencement time; or
• the clearance came into force before the commencement
time. [Schedule 13, item 1, subsection 185(2)]
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Application and transitional provisions
13.22 If a merger clearance is granted in relation to an application
falling under subsection 185(2), it is taken to be an authorisation under
section 88 that specifies section 50. [Schedule 13, item 1, note at subsection
185(2)]
13.23 Where a merger authorisation was applied for under section
95AU, but not determined before the commencement time, Subdivisions
A and C of Division 3 of Part VII (except sections 95AZ, 95AZA, 95AZL
and 95AZM) continue to apply as if they had not been repealed by the
amending Act. [Schedule 13, item 1, subsection 185(3)]
13.24 If a merger authorisation is granted in relation to an application
falling under subsection 185(3), it is taken to be an authorisation under
section 88 that specifies section 50. [Schedule 13, item 1, note at subsection
185(3)]
13.25 New subsection 185(4) deals with clearance determinations,
which are defined in the subsection to mean a determination made by the
Commission before, at or after the commencement time under former
section 95AM. [Schedule 13, item 1, subsection 185(4)]
13.26 After the commencement time, Part IX as amended by
Schedule 9 to the amending Act applies in relation to a clearance
determination as if the clearance determination related to a domestic
merger authorisation rather than a clearance. The effect of this provision is
that the new law for Tribunal review of merger authorisations also applies
for Tribunal review of merger clearances. [Schedule 13, item 1, subsection
185(4)]
13.27 However, where an application for a review of a clearance
determination is made before the commencement time, but the Tribunal
has not made its decision before the commencement time, then subsection
185(4) does not apply. For those applications, Division 3 of part IX
continues to apply as if it had not been repealed by Schedule 9 to the
amending Act. This ensures such reviews can proceed to determination by
the Tribunal without the need for a fresh application for review. [Schedule
13, item 1, subsection 185(5)]
13.28 Where a merger clearance or authorisation was applied for
before the commencement time, and granted at or after the
commencement time, it is to be treated as a merger authorisation granted
under the new law. That is, it is taken to be an authorisation granted under
section 88 of the amended Act that specifies section 50. [Schedule 13, item 1,
subsection 185(6)]
13.29 Where a merger clearance was granted under former section
95AD before the commencement time, but not yet in force, before the
commencement time, it is taken to be, and may be dealt with, as an
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
authorisation granted under section 88 of the amended Act that specifies
section 50. [Schedule 13, item 1, subsection 185(7)]
13.30 New subsection 185(8) provides that the new section 92 applies
to information given to the Tribunal or Commission under Division 3 of
Part VII or Division 3 of Part IX (the old Divisions for merger clearances,
merger authorisations and Tribunal review of Commission merger
clearance decisions), as those Divisions continue to apply under
subsections 185(2), 185(3) or 185(5), as if that information had been
given under the new authorisation provisions in connection with a merger
authorisation. [Schedule 13, item 1, subsection 185(8)]
13.31 The effect of this provision is to ensure that the prohibition
against providing false or misleading information applies to information
provided under the old law for merger clearances and authorisations (and
Tribunal review of merger clearances), despite the repeal of the relevant
old provisions.
13.32 Finally, subsection 185(9) clarifies that nothing in section 185
limits the application of Part IX or section 92. [Schedule 13, item 1, subsection
185(9)]
Commencement, application and transitional provisions
13.33 Schedule 13 commences at the same time as Schedule 1.
118
Chapter 14
Other amendments
Outline of chapter
14.1 Schedule 14 to this Bill makes various amendments to
streamline the administration of the Act, to reduce compliance burdens for
business, individuals and within Government, while preserving the
protections available under the Act.
Context of amendments
14.2 Following its meeting on 13 June 2014, the Legislative and
Governance Forum on Consumer Affairs issued a joint communique
announcing its intention to pursue measures to reduce compliance burdens
on business and consumers in the consumer law, whilst preserving
important protections under the Act.
14.3 The measures in this Schedule give effect to this decision, with a
focus on the requirements of the Australian Consumer Law (ACL), which
is set out in Schedule 2 to the Act.
Summary of new law
14.4 Schedule 14 to this Bill amends the Act and the ACL to:
• remove the requirement for private litigants to seek
Ministerial consent to bring an action for a breach of the Act
that takes place overseas (Part 1);
• extend the jurisdiction of State and Territory courts to hear
actions under the Act for pyramid selling and unsafe goods
liability (Part 2);
• remove the redundant requirement for the ACCC to keep a
register of certain records when they hold conferences for
product safety bans (Part 3);
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• permit the disclosure of certain information by the ACCC to
specific agencies where it is reasonably necessary to protect
public safety (Part 4);
• rectify a drafting error so that the offence of conspiracy is
removed from the Act, ensuring there is no overlap with the
Criminal Code Act 1995 (Part 5);
• make clear the requirements in the ACL regarding the
cooling off period for unsolicited consumer agreements
(Part 6);
• rectify a drafting error which previously did not extend to
any person, as a law of the Commonwealth, the application
of the ACL regarding certain types of misleading conduct
(Part 7); and
• permit the ACCC to seek a court order directing a person to
comply with a notice given under section 155 of the Act to
furnish information, produce documents or give evidence
(Part 8).
Comparison of key features of new law and current law
New law Current law
Removes the requirement for private The Act requires Ministerial consent
litigants to seek Ministerial consent to to bring action for a breach of the Act
bring action for a breach of the Act that takes place overseas.
that takes place overseas.
Extends the jurisdiction of State and State and Territory courts cannot hear
Territory courts to hear actions under actions for pyramid selling and
the Act for pyramid selling and unsafe goods liability.
unsafe goods liability.
Removes the requirement for the Paragraphs 95(1)(h) and (j) require
ACCC to keep a register of records of the ACCC to maintain certain
proceedings at certain conferences or records, that relate to sections of the
recommendations under the product Act that have been repealed and
safety requirements. superseded by Div 3 of Part XI of the
Act.
Permits the disclosure of certain Section 132A of the ACL permits the
confidential information by the ACCC to provide certain confidential
ACCC to specific agencies where it is information to any other person only
reasonably necessary to protect public in limited circumstances.
safety.
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Other amendments
New law Current law
Rectifies a drafting error so that the Both the Act and subsection 11.5 of
offence of conspiracy is carved out of the Criminal Code Act 1995 apply to
the Act, ensuring there is no overlap a relevant offence against the cartel
with the Criminal Code Act 1995. offence provisions in the Act.
Clarifies that the cooling-off period The current drafting of
for unsolicited consumer agreements subsection 86(1) of the ACL may
begin on the day the agreement is inadvertently raise confusion about
entered into. whether traders can supply
unsolicited goods or services and
accept or require payment after an
unsolicited consumer agreement is
entered into but before the ten
business days commence for the
cooling-off period.
Rectifies a drafting error by Section 131 of the Act provides that
extending to any person the section 33 of the ACL applies only to
application of the ACL, as a law of the conduct of corporations in trade
the Commonwealth, regarding or commerce, as a law of the
conduct that is liable to mislead the Commonwealth, regarding conduct
public as to the nature, manufacturing that is liable to mislead the public as
process, characteristics, suitability for to the nature, manufacturing process,
purpose, or quantity of goods. characteristics, suitability for
purpose, or quantity of goods.
Permit the ACCC to seek a court Section 155 of the Act does not
order directing a person to comply permit the ACCC to seek a court
with a notice given under section 155 order to compel a person to comply
of the Act to furnish information, with a notice given under that section
produce documents or give evidence. to furnish information, produce
documents or give evidence.
Detailed explanation of new law
Part 1 -- Removal of requirements for Ministerial consents
14.5 Section 5 allows for the extraterritorial application of certain
provisions of the Act. Under section 5, Parts IV and XI, the Australian
Consumer Law (other than Part 5-3) and related provisions of the Act
extend to conduct engaged in outside of Australia by certain entities
(corporations incorporated in Australia or carrying on business within
Australia, Australian citizens and persons ordinarily resident in Australia).
14.6 Currently, section 5 prevents private litigants from relying on
the extraterritorial application of the Act without the consent of the
responsible Minister.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
14.7 This Part repeals subsections 5(3) and 5(4), and thereby removes
the requirement for private parties to seek Ministerial consent before
commencing an action for, or relying on, the extraterritorial application of
the Act under section 5 in certain competition or consumer law actions
relating to conduct occurring overseas. [Schedule 14, item 1, subsections 5(3)
and (4)]
14.8 Subsection 5(5), which details when the responsible Minister is
required to give consent, is also repealed as it is made redundant by the
repeal of subsections 5(3) and 5(4). [Schedule 14, item 1, subsection 5(5)]
14.9 These amendments were recommended by the Harper Review,
and remove an unnecessary roadblock to possible redress for harm
suffered as a result of a contravention of the competition or consumer
provisions of the Act.
14.10 Section 5 continues to require that the contravening firm has a
connection with Australia in the nature of residence, incorporation or
business presence.
Application provisions
14.11 The repeal of subsection 5(3) of the Act will apply to hearings
commencing on or after the day Schedule 14 commences. This means that
Ministerial consent will not be required for such hearings but will still be
required for hearings that have already commenced. [Schedule 14, item 2]
14.12 The repeal of subsection 5(4) of the Act will apply to
applications made on or after the day Schedule 14 commences. This
means that Ministerial consent will not be required for such
applications. [Schedule 14, item 2]
Part 2 -- Jurisdiction of State and Territory courts
14.13 This Part amends Division 8 of Part XI of the Act to correct a
drafting error regarding the jurisdiction of state and territory courts.
14.14 Specifically, it extends jurisdiction to State and Territory courts
to hear cases relating to pyramid selling (Division 3 of Part 3-1 of the
ACL) and manufacturer's liability for goods with safety defects (Part 3-5
of the ACL).
14.15 States and Territories were consulted regarding this amendment.
14.16 Although this amendment extends jurisdiction, the current
subsection 138B(3) of the Act will still provide that the States and
Territories can, where they prefer to do so, limit their courts' jurisdiction
122
Other amendments
to hear cases relating to pyramid selling and manufacturer's liability for
goods with safety defects.
14.17 This Part secures greater access to justice for consumers by
allowing them to seek redress in State and Territory courts and tribunals
for any breach of the ACL, rather than needing to seek recourse in Federal
courts. [Schedule 14, items 3 to 7, subsections 138B(2), 138C(1), 138C(3) and
paragraphs 138D(1)(b) and 138E(1)(b)]
Application provision
14.18 The amendments made by this Part apply to matters arising on
or after the day Schedule 14 commences. [Schedule 14, item 8]
Part 3 -- Register of notifications
14.19 This Part amends subsection 95(1) of the Act to remove the
requirement for the ACCC to keep a register containing records of
proceedings at conferences held under section 65J or 65M of the former
Trade Practices Act 1974 (TP Act), and recommendations made to the
Minister responsible for the TP Act by the ACCC under sections 65K or
65N of the former TP Act.
14.20 The requirements of sections 65J, 65K, 65M and 65N were
superseded by Division 3 of Part XI of the Act. Sections 132D and 132G
of the Act now achieve the objective of subsections 95(1)(h) and (j) in
ensuring transparency and accountability for product safety decisions.
14.21 This amendment will not result in the removal of any
information on the Register of Notifications previously required to be kept
by the ACCC under subsection 95(1) of the Act. Such information will
continue to be kept consistent with the requirements of the Archives Act
1983. Sections 132D and 132G of the Act also operate in a similar manner
to ensure that such information is published.
14.22 The information previously required to be held in accordance
with subsections 95(1)(h) and (j) will be kept consistent with the
requirements of Division 3 of Part XI of the Act in future. [Schedule 14,
items 9 to 10, paragraphs 95(1)(gb), 95(1)(h) and (j)]
Part 4 -- Confidentiality of notices
14.23 Under section 131 of the ACL, suppliers of consumer goods of a
particular kind have an obligation to report to the Commonwealth
Minister by written notice, within two working days of becoming aware,
that the goods have been associated with the death, serious injury or
illness of any person.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
14.24 Section 132A of the ACL provides for the confidentiality of
these notices, unless the person who gave the notice has consented to the
ACCC sharing the information, or in other specific circumstances, such as
disclosure:
• by the Commonwealth Minister to another Consumer Affairs
Minister, the regulator or an associate regulator (for example,
the agency that has responsibility for administering the ACL
as a law of the State or Territory);
• by the Commonwealth Minister where they consider it is in
the public interest;
• among the ACCC and associate regulators;
• required or authorised by or under law; or
• reasonably necessary for the enforcement of the criminal law
or a law imposing a pecuniary penalty.
14.25 This Part improves the ACCC's ability to share notices it
receives under section 132A of the ACL with specified agencies where it
is reasonably necessary to protect public safety. To the extent that a
particular notice contains personal or confidential information, the
disclosure of such notices to other agencies or bodies will still be required
to comply with the law, including the Privacy Act 1988.
14.26 Agencies specified in this Part and the reasons for their inclusion
are set out below:
Agency Reason for their inclusion
Any agency within The ACCC works closely with a range of
the meaning of the Commonwealth agencies to ensure the safety of
Freedom of products in Australia, for example, the Australian
Information Customs and Border Protection Service, Food
Act 1982 Standards Australia New Zealand, the Department of
Infrastructure and Regional Development and the
Therapeutic Goods Administration. It is essential that
the ACCC can provide copies of notices it receives to
relevant Commonwealth agencies where it is
reasonably necessary to protect public safety.
Commonwealth The Director of Public Prosecutions is responsible for
Director of Public prosecuting breaches of the criminal offences
Prosecutions contained in the ACL, including the product safety
requirements of the ACL.
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Other amendments
Agency Reason for their inclusion
A State/Territory The ACCC works closely with a range of State and
government body Territory bodies to ensure the safety of products in
(within the meaning Australia, for example, State and Territory consumer
of section 155AAA agencies, food regulators and electricity regulators. It is
of the Act) essential that the ACCC can provide copies of notices
it receives to relevant State and Territory bodies where
it is reasonably necessary to protect public safety.
A foreign The ACCC works closely with its counterpart
government body regulators in other jurisdictions to ensure the safety of
(within the meaning products in Australia, given the global nature of
of section 155AAA product markets. It is essential that the ACCC can
of the Act) provide copies of notices it receives to its counterparts
overseas where it is reasonably necessary to protect
public safety. As these notices relate to product safety
and are provided by industry, disclosure to a foreign
government agency is not expected to raise national
security concerns.
14.27 Before disclosing this information, the ACCC must be satisfied
that the disclosure is reasonably necessary to protect public safety.
[Schedule 14, item 11, section 132A of Schedule 2]
Application provisions
14.28 The amendments made by this Part in relation to section 132A
only apply to disclosures relating to notices made on or after the day
Schedule 14 commences. [Schedule 14, item 27, section 291 of Schedule 2]
Part 5 -- Cartel offences
14.29 Section 79 of the Act provides for ancillary offences in relation
to criminal cartels and seeks to remove the duplicative application of the
equivalent requirements of the Criminal Code, which is set out in a
Schedule to the Criminal Code Act 1995, where the Act applies.
14.30 Due to a drafting error, section 79 does not remove the parallel
application of the offence of conspiracy found in subsection 11.5 of the
Criminal Code. This Part corrects this error and removes this overlap
between the Act and the Criminal Code. [Schedule 14, item 12, subsection 79(5)]
Application provision
14.31 The amendments made by this Part apply in relation to
contraventions arising on or after the day Schedule 14 commences.
[Schedule 14, item 13]
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Part 6 -- Unsolicited consumer agreements
14.32 This Part amends subsection 86(1), paragraphs 82(3)(a)-(d),
85(3)(a) and 85(6)(a), 86(1)(d)-(e) and section 179 of the ACL to clarify
the operation of the cooling-off period for unsolicited consumer
agreements.
14.33 Subsection 86(1) currently provides that a supplier under an
unsolicited consumer agreement must not supply unsolicited goods or
services, or accept or require payment under an unsolicited consumer
agreement, for ten business days commencing on the first business day
after such an agreement was made in person, or if it was made by
telephone, commencing at the start of the business day after the consumer
is given a copy of the agreement.
14.34 The current drafting of this provision may inadvertently permit
traders to supply unsolicited goods or services and accept or require
payment after an unsolicited consumer agreement has been entered into,
but before the ten business days commence (that is, on the day the
contract is agreed).
14.35 This amendment clarifies the responsibilities for traders and the
rights of consumers regarding the supply and acceptance of payment for
unsolicited goods or services and the commencement of the cooling-off
period. In particular, it now makes it clear that the cooling-off period
commences when the agreement is entered into and that during this period
traders are not permitted to supply unsolicited goods or services and
accept or require payment under an unsolicited consumer. [Schedule 14,
items 18 and 19, subsection 86(1) of Schedule 2]
14.36 Consequential amendments are being made to paragraphs
82(3)(a)-(d), 85(3)(a) and 85(6)(a), and section 179 of the ACL to ensure
consistency with section 86 in the expression of, and basis for, calculating
the cooling-off period in those requirements. [Schedule 14, items 14 to 17 and
20 to 22, subsections 82(3)(a) to (d), 85(3)(a) and 85(6)(a) and section 179 of Schedule
2]
Application provision
14.37 The amendments made by this Part apply in relation to
unsolicited consumer agreements made on or after the day Schedule 14
commences. [Schedule 14, item 27, section 292 of Schedule 2]
126
Other amendments
Part 7 -- Misleading conduct as to the nature etc. of goods
14.38 This Part corrects a drafting error by amending
subsection 131(2) of the Act to extend the application of section 33 of the
ACL, as a law of the Commonwealth, to the conduct of any person.
14.39 The equivalent section under the former TP Act (section 55) had
applied to the conduct of any person and section 33 of the Act, as a law of
a state or territory, currently applies to the conduct of any person.
14.40 Section 33 of the ACL implements Australia's obligations under
the Paris Convention for the Protection of Industrial Property. [Schedule
14, item 23, subsection 131(2)]
Application provision
14.41 The amendment made by this Part applies to conduct occurring
on or after the day Schedule 14 commences. [Schedule 14, item 24]
Part 8 -- Power to obtain information, documents and evidence
14.42 Section 155 of the Act sets out the ACCC's powers to
obtain information, documents and evidence. Currently, failure to comply
with a notice to furnish information, produce documents or give evidence
may result in a fine or a term of imprisonment. The operation of section
155 is further detailed at Chapter 11.
14.43 This Part improves the efficacy of section 155 by permitting the
ACCC to seek a court order directing a person to comply with a notice
given under section 155. [Schedule 14, item 25, subsection 155(8)]
Application provision
14.44 The amendment made by this Part to section 155 applies in
relation to a refusal or failure to comply with a notice given on or after the
day Schedule 14 commences. [Schedule 14, item 26]
Application and transitional provisions
14.45 The application of the amendments made by Schedule 14 is
detailed above in relation to each Part.
127
Chapter 15
Regulation impact statement
Policy objective
15.1 Prior to the 2013 Federal Election, the Government committed
to a 'root and branch' review of competition laws and policy. The review
would examine the broader competition framework to identify
opportunities to increase productivity and efficiency in markets, drive
benefits to ease cost of living pressures and raise living standards for all
Australians.
15.2 The then Prime Minister and the then Minister for Small
Business announced a review of competition policy on 4 December 2013.
On 27 March 2014, the then Minister for Small Business released the final
Terms of Reference following consultation with the States and Territories,
and announced the independent Review Panel, chaired by Professor Ian
Harper.
15.3 The Review was conducted over the course of 12 months, and
concluded with the release of the Final Report on 31 March 2015. The
Harper Review made 56 recommendations related to competition laws,
competition policies and competition institutions.
15.4 The Government released its response on 24 November 2015.
15.5 The package of amendments contained in this Bill implement a
significant number of the reforms to competition laws which the
Government supported in its response to the Harper Review. A number of
the other recommendations have already been addressed through
Government decisions, or are directed at State and Territory governments.
15.6 In relation to the National Access Regime, the Government
announced its support for the recommendations made by the Productivity
Commission (PC) in its 2013 Inquiry Report into the National Access
Regime.
15.7 As detailed in earlier chapters, the recommendations which are
either partially or wholly contained in this Bill are:
• The definition of 'competition' should be amended to ensure
it includes competition from potential imports
(recommendation 25);
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• The cartel conduct provisions should apply to conduct taking
place within Australia or across Australian borders, and the
joint venture exceptions should be broadened
(recommendation 27);
• The separate prohibition on exclusionary provisions should
be repealed (recommendation 28);
• The price signalling provisions should be repealed and
replaced by a more general prohibition on concerted practices
with the purpose, effect or likely effect of substantially
lessening competition (recommendation 29);
• Third-line forcing should be prohibited only if it has the
purpose, effect or likely effect of substantially lessening
competition (recommendation 32);
• Notification and a 'related bodies corporate' defence should
be available for resale price maintenance
(recommendation 34);
• The formal merger exemption processes should be
significantly reformed (recommendation 35);
• The maximum fines for secondary boycotts should be
increased in line with fines for other breaches of the Act
(recommendation 36);
• The authorisation and notification provisions should be
simplified to allow a single application for each transaction
or arrangement, and authorisation should be available for
conduct which does not substantially lessen competition, in
addition to conduct that has a net public benefit
(recommendation 38);
• The Commission should have a class exemption power to
exempt kinds of conduct that are not of competition concern
(recommendation 39);
• Section 155 should be amended to: cover alleged
contravention of court-enforceable undertakings; introduce a
reasonable search defence; and increase the penalty for
non-compliance (recommendation 40);
• Section 83 should be extended to allow reliance on
admissions of fact (recommendation 41);
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Regulation impact statement
• The National Access Regime declaration criteria should be
revised (recommendation 42) (note that the declaration
criteria are being revised in accordance with the
recommendations made by the PC in its Inquiry Report); and
• The Act should be reformed to introduce greater flexibility
for collective bargaining by small business
(recommendation 54).
15.8 On 21 July 2015, Treasury certified that the Productivity
Commission Inquiry Report on the National Access Regime constituted a
process and analysis equivalent to a RIS. On 15 November 2015, Treasury
certified that the independent Harper Review constituted a process and
analysis equivalent to a Regulation Impact Statement (RIS).
15.9 The Australian Government Guide to Regulation identifies
seven questions that a RIS should address. Following is a summary of the
analysis of those questions that occurred as part of the independent
reviews and stakeholder consultation process in relation to the
recommendations implemented in this Bill.
Problem
15.10 The Harper Review Draft Report and Final Report and the PC
Inquiry Report into the National Access Regime discuss, in detail, the
problems with each of the provisions that this Bill substantially amends,
as well as with the Competition and Consumer Act 2010 (the Act) more
generally.
15.11 The Harper Review was the first comprehensive review of
Australia's competition framework in more than 20 years. The Review
Panel examined whether Australia's existing competition settings were fit
for purpose, especially in light of the persistent forces for change that will
shape the Australian economy now and into the future. The Harper
Review identified several such forces for change.
15.12 Firstly, the rise of Asia and other emerging economies provides
significant opportunities for Australia but also poses some challenges. A
heightened capacity for agility and innovation will be needed to match
changing tastes and preferences in emerging economies.
15.13 Secondly, Australia's ageing population will give rise to a wider
array of needs and preferences among older Australians and their families.
The right policy settings will help people to meet their individual health
and aged care needs.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
15.14 Thirdly, new technologies are 'digitally disrupting' the way
many markets operate, the way business is done and the way consumers
engage with markets. The challenge for governments is to capture the
benefits of digital disruption by ensuring that Australia's competition
settings encourage innovation, but still preserve expected safeguards for
consumers.
15.15 Competition laws which are 'fit for purpose' will be well suited
to support Australia's economy throughout these changes. The Harper
Review found, while the concepts, prohibitions and structures of
Australia's competition were sound, implementing a range of specific
reforms would address problem areas and enhance the effectiveness of the
competition law.
15.16 In its Inquiry Report into the National Access Regime, the PC
similarly recommended reforms to the Regime to enhance its
effectiveness. The PC found that the scope of the Regime should be
confined to ensure its use is limited to the exceptional cases where the
benefits arising from increased competition in dependent markets are
likely to outweigh the costs of regulated third party access to
infrastructure services. The PC recommended amendments to clarify the
declaration criteria to achieve this outcome
Need for government action
15.17 The Harper Review Draft Report and Final Report and the PC
Inquiry Report into the National Access Regime explain why government
action is needed to progress and implement those recommendations which
are contained in this Bill.
15.18 As discussed above, Australia's competition framework needs to
be suited to a number of challenges facing Australia's economy.
15.19 The consultation and research undertaken by the Panel and by
the PC provide clear evidence that reform to Australia's competition laws
is overdue and critical to improving Australia's productivity performance
and sustaining standards of living over the long term.
15.20 The Harper Review found that overall the central concepts,
prohibitions and structure of the current competition law should be
retained, as they are appropriate to serve the current and future needs of
the Australian economy.
15.21 However, the Harper Review also found that Australia's
competition laws could be reformed to enhance their effectiveness and
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Regulation impact statement
ensure they continue to be fit for purpose. Many of the competition law
recommendations of the Harper Review are intended to address the
following types of problems:
• some provisions of the Act are unnecessarily complex,
leading to regulatory uncertainty, unnecessary compliance
burdens on business and undue costs on the economy;
• some provisions of the Act are overly prescriptive, or are
duplicative and redundant, and could be greatly simplified;
• some provisions of the Act are unfit for purpose, and either
unnecessarily inhibit pro-competitive conduct or fail to
adequately prohibit anti-competitive conduct.
Policy options
15.22 The Harper Review Final Report considers and discusses a range
of policy options to enhance competition policy settings in Australia. The
benefits of reform are considered, with a preference for reforms that
enhance the long-term interests of Australians.
15.23 The Issues Paper, published early in the Review process,
provided an initial forum for stakeholders to raise policy options. The
Draft Report weighed stakeholder views, considered the benefits of
potential reforms, made a range of draft recommendations and invited
further submissions in response to those recommendations. The Final
Report again weighed stakeholder views, considered the benefits of
potential reforms and made final recommendations which were considered
to be the best options for reform.
15.24 The Harper Review examined the Act to assess whether
Australia's competition laws remained fit for purpose having regard to
consumer and business experience with the laws, changes that have
occurred in the Australian economy and that are anticipated, and relevant
international developments.
15.25 The policy options considered by the Review Panel, before
arriving at each of the final recommendations, are extensively detailed in
the Harper Review Final Report.
15.26 The following paragraphs detail the options that were considered
in determining how best to implement the policy intent in relation to three
key areas of reform:
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
• joint venture exceptions for cartel conduct;
• concerted practices; and
• Tribunal review in relation to merger authorisations.
15.27 In relation to the National Access Regime, the PC considered
options including:
• retaining the status quo - keeping the Regime in its present
form;
• reforming the Regime - keeping the Regime, but making
changes to the framework in order to lower the costs of the
Regime, and/or increase the benefits; and
• removing the Regime and relying on alternatives such as
general competition law, new regulatory structures, price
surveillance or monitoring, or ad hoc measures.
Analysis of costs/benefits
15.28 In considering whether Australia's competition laws are fit for
purpose, the Review Panel asked four questions:
• Does the law focus on enhancing consumer wellbeing over
the long term?
• Does the law protect competition rather than individual
competitors?
• Does the law strike the right balance between prohibiting
anti-competitive conduct and not interfering with efficiency,
innovation and entrepreneurship?
• Is the law as clear, simple and predictable as it can be?
15.29 The Review Panel found that some areas of Australia's
competition law do not appropriately address each of these considerations.
15.30 Before proceeding to make specific recommendations for
reform, the Review Panel and the PC analysed the costs and benefits of
the relevant policy options by benchmarking the status quo against each
proposal for reform.
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Regulation impact statement
15.31 Where the Panel considered that the competition laws have
served Australia well, the Final Report recommended specific reforms to
enhance their effectiveness. The Panel and the PC recommended a
number of changes to simplify and clarify the operation of the law, to
bring to the forefront the competition policy objectives of the law, and to
reduce business compliance costs.
15.32 Importantly, the Review Panel recognised that all changes to the
law will involve some transitional costs as firms become familiar with the
new provisions and as courts develop jurisprudence on their application.
15.33 Many of the recommendations were specifically designed to
help businesses manage transitional costs, including:
• legislative guidance to help guide the courts with respect to
the intended operation of provisions;
• broadening the Commission's powers to authorise conduct
where there is a net public benefit or where there are unlikely
to be competition concerns; and
• encouraging the Commission to publish guidance material
which sets out its enforcement approach.
15.34 The Government further evaluated each of the chosen policy
options in light of stakeholder feedback received during exposure draft
consultation.
15.35 As detailed under 'consultation' below, the Government has
refined the draft law and explanatory material to further reduce
uncertainty and minimise the cost to business while retaining the benefits
of reform.
Joint venture exceptions for cartel conduct
15.36 The Harper Review recommended that a broad exemption
should be included for joint ventures, whether for the production, supply,
acquisition or marketing of goods or services.
15.37 The Harper Review made this recommendation on the basis that
the current exceptions are too narrowly framed. Among other limitations,
the exceptions only apply where the relevant cartel provision is contained
in a contract and where the joint venture is for the production and/or
supply of goods or services. Submissions to the Harper Review raised
concerns that the narrow application of the current exceptions was
limiting legitimate commercial transactions.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
15.38 At the exposure draft stage, amendments were drafted to
broaden the joint venture exceptions so they do not limit legitimate
commercial transactions. In particular, the draft amendments extended the
joint venture exceptions to arrangements and understandings containing
cartel provisions, and to joint ventures for the acquisition of goods or
services. A decision was made not to extend the exceptions to joint
ventures for the marketing of goods or services, as a joint venture
established only for marketing would effectively constitute a price-fixing
cartel, and this would weaken the prohibition on price-fixing cartels.
15.39 While the exposure draft amendments significantly broadened
the joint venture exceptions for the benefit of legitimate joint ventures,
concerns were raised that this may come at the cost of significantly
undermining the integrity of the cartel conduct prohibitions; specifically,
that the broadened exceptions would be open to abuse by parties engaged
in anti-competitive cartel conduct and not genuinely in a joint venture.
15.40 Due to these concerns, a decision was made to proceed with
broadening the exceptions, but to also make appropriate amendments to
strengthen the exceptions to guard against abuse of the exceptions.
Specifically, the exceptions were limited to joint ventures that are not for
the purpose of substantially lessening competition, and the burden of
proof on a defendant to raise the exceptions was raised to a legal burden.
These amendments will ensure the joint venture exceptions can only be
raised by parties who are engaged in a genuine joint venture.
Concerted practices
15.41 The Harper Review recommended that section 45 should be
extended to prohibit a person engaging in a concerted practice with one or
more other persons that has the purpose, effect or likely effect of
substantially lessening competition.
15.42 The Review Panel considered that no legislative definition of a
'concerted practice' was required, as "the word 'concerted' has a clear and
practical meaning", and the exposure draft legislation was drafted on this
basis. At that stage, the explanatory material on concerted practices was
not extensive and referred to European law.
15.43 However, submissions to the exposure draft called for more
guidance as to what constitutes a concerted practice, as the concept is new
to Australian law. Several options to address this concern were
considered.
15.44 A legislative definition was considered, but ultimately not
adopted. Although a legislative definition would possibly increase
'certainty' as to what does and does not constitute a concerted practice,
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Regulation impact statement
this would require a focus on determining whether conduct fits within
detailed technical provisions, rather than making a principled assessment
of the conduct in its entirety. It was considered that this approach would
carry the risk of inadvertently excluding conduct which should constitute
a 'concerted practice' under section 45. Further, while consultation
generally showed a consensus as to the features of a concerted practice,
reducing these features to a legislative definition proved problematic.
15.45 Ultimately, a decision was made to expand the explanatory
material in Chapter 3, to provide additional guidance as to the typical
features of a concerted practice while also leaving scope within the Act to
apply the concept to new forms of anti-competitive conduct as they arise.
This option was judged to most increase certainty while also avoiding
inappropriately limiting the scope of the new concept.
Tribunal review in relation to merger authorisations
15.46 The Harper Review recommended that the review by the
Tribunal should be based upon the material that was before the
Commission, but the Tribunal should have the discretion to allow a party
to adduce further evidence, or to call and question a witness, if the
Tribunal is satisfied that there is sufficient reason.
15.47 The exposure draft legislation provided for the Tribunal's
review in relation to a merger authorisation to be a limited merits review,
that is, reviews would be based only on the material before the
Commission at the time of the Commission's determination. This
approach was adopted as it would ensure that parties had the incentive to
place all relevant evidence and information before the Commission at first
instance, and that Tribunal reviews in relation to merger authorisations
could be concluded expeditiously so as not to unduly prejudice merger
transactions.
15.48 However, concerns were raised that a limited merits review is
inappropriate, particularly as this would mean the Tribunal is unable to
take account of a change in circumstances following the Commission's
decision, and parties would be unable to produce evidence or information
that they were not able to produce at the time of the Commission's
decision. Several options to address this concern were considered.
15.49 A full merits review (that is, a rehearing) by the Tribunal was
considered to be inappropriate in relation to merger authorisations, given
the time and commercial sensitivities of such transactions. The prospect of
a lengthy merits review could be open to abuse by parties seeking to
endanger the success of a merger transaction.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
15.50 Ultimately, a 'hybrid' merits review, similar to that proposed by
the Harper Review, was adopted. The Tribunal's review in relation to a
merger authorisation will be based on the material before the
Commission, but the Tribunal may seek clarifying information, and the
Tribunal may allow the parties to present new information or evidence
which was not in existence at the time of the Commission's decision. This
would appropriately balance procedural fairness by allowing for a change
of circumstances to be taken into account, but would prevent parties
abusing the authorisation process by choosing to withhold information
from the Commission at first instance.
Consultation
15.51 The amendments contained in this Bill have been the subject of
extensive consultation. The 12-month review process provided all
interested stakeholders with opportunities to comment on proposed
changes to competition policies, laws and institutions. The Harper Review
process commenced with the release of an Issues Paper on 14 April 2014,
followed by an eight week consultation period. During this consultation
period, the Review Panel received written submissions and held meetings
with local businesses in a number of locations as arranged through
representative business groups.
15.52 A Draft Report was released on 22 September 2014, followed by
a further eight week consultation period during which the Review Panel
received written submissions and held public forums in Perth, Adelaide,
Sydney, Brisbane, Canberra, Darwin and Hobart. On 23-24 October 2014,
the Review Panel hosted an International Conference, to draw on
international and domestic expertise to consider the review and
recommendations in the Draft Report.
15.53 Over the course of the Harper Review, the Panel hosted more
than 150 meetings with stakeholders and received almost 1,000 written
submissions (almost 350 in response to the Issues Paper and around 600 in
response to the Draft Report).
15.54 In relation to the National Access Regime, the PC released an
issues paper in November 2012 for public comment. The PC held
roundtables concerning the issues paper in Melbourne and Sydney. The
PC released a draft report for public comment on 28 May 2013, and held
public hearings in Perth, Sydney and Melbourne. The PC received
76 submissions through the consultation process.
15.55 The amendments contained in this Bill were released for
exposure draft consultation as the Competition and Consumer
138
Regulation impact statement
Amendment (Competition Policy Review) Bill 2016. Submissions were
accepted over an eight week period from 5 September 2016 to
28 October 2016. During this public consultation period, 61 submissions
were received, of which 5 were confidential. A number of stakeholder
meetings were also held during this period.
15.56 Stakeholders raised a number of concerns with the proposed
amendments, as contained in the exposure draft legislation. The main
points of concern were:
• that the meaning of 'likely', in the absence of the definition
in section 44ZZRB, was uncertain;
• that the joint venture and vertical trading restriction
exceptions to the cartel prohibitions had become too broad,
and would be open to abuse by firms not genuinely in a joint
venture or a vertical relationship;
• that the meaning of 'concerted practices' was not sufficiently
clear;
• that the Tribunal review of the Commission's decision in
relation to a merger authorisation was a limited merits
review;
• the transitional treatment of certain merger authorisations and
clearances, following the amendments in Schedule 9, was not
sufficiently clear; and
• that to allow an admission of fact to be proven by any
document would allow for documents not previously tested
before a court to be relied on as prima facie evidence.
• that the updated declaration criteria in section 44CA(1), and
the costs to be taken into account under the different criteria,
were not sufficiently clear.
15.57 In response to these concerns, the Government made a number
of substantive amendments to the draft Bill and the Explanatory
Memorandum:
• the amendment repealing section 44ZZRB was removed, to
be given further consideration;
• the joint venture cartel exceptions were expressly limited to
joint ventures that are not for the purpose of substantially
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
lessening competition, and the burden of proof on the
defendant was increased;
• the vertical trading restriction cartel exception was removed
from this Bill, to be given further consideration and
progressed in a future legislative package together with
amendments to section 47;
• additional guidance as to what may constitute a 'concerted
practice' has been inserted into Chapter 3 of this Explanatory
Memorandum;
• the Tribunal was given a discretion to allow parties to a
review of the Commission's decision in relation to a merger
authorisation to admit new evidence if that evidence was not
in existence at the time of the Commission's decision;
• a new Schedule 13 was added to the Bill, containing
additional, detailed transitional provisions for the treatment
of merger authorisations and clearances which were applied
for, or granted, under the old law; and
• proof of an admission of fact was limited to either a
document under the seal of the court from which the
admission of fact appears, or a document filed with the court.
• the declaration criteria were amended to provide greater
clarity and additional guidance as to the costs to be
considered under different criteria has been inserted in
Chapter 12 of this Explanatory Memorandum.
Agreed option
15.58 On 24 November 2015, in its response to the Harper Review, the
Government announced that it supported and would adopt each of the
recommendations being progressed through this Bill. This included the
recommendations of the PC Inquiry Report into the National Access
Regime, which the Government adopted in preference to the Harper
recommendations where they differed.
15.59 A regulatory costing for each of these amendments has been
prepared, consistent with the Government's Regulatory Burden
Measurement Framework.
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Regulation impact statement
15.60 The amendments relating to price signalling and concerted
practices, resale price maintenance, and collective bargaining and
collective boycotts have each been estimated to result in a slight increase
in compliance costs.
15.61 In relation to price signalling and concerted practices, the
increased compliance costs are expected to be borne only initially, and
primarily by large businesses operating in concentrated markets (i.e. those
firms whose conduct is likely to have a substantial impact on
competition). At least some of those businesses are likely to seek legal
advice to ensure that their practices continue to be compliant with
section 45 as amended. After this initial expenditure, any ongoing
additional compliance costs will be minimal.
15.62 In relation to resale price maintenance, compliance costs will be
reduced by the availability of notification, which is a quicker and less
costly exemption process than seeking an authorisation. However, as
noted in Chapter 8, the delay and expense of seeking authorisation for
resale price maintenance means that the authorisation process is currently
not utilised by businesses. To the extent that some businesses will make
use of the newly available notification procedure for resale price
maintenance, when they would not have sought an exemption for the same
conduct through authorisation, those businesses will incur additional
compliance costs.
15.63 In relation to collective bargaining and collective boycotts, the
notification process is made more flexible and accessible by the
amendments, and this carries substantial benefits for small businesses. To
the extent that this greater flexibility and accessibility encourages
notifications from small businesses, who previously would not have
sought any form of exemption, additional compliance costs will be
incurred by those small businesses. However, those compliance costs will
be minimal and the benefits of a more efficient exemption process will
ultimately prove to be of significant value to small businesses wishing to
collectively bargain.
15.64 The regulatory costs of each recommendation implemented in
this Bill are summarised in Table 15.1.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Table 15.1: Regulatory burden estimate (RBE) table
Average annual regulatory costs (from business as usual)
Harper Amendment Schedules Business Community Individuals Total
rec. organisations change
in costs
25 Definition of 1 - - - -
competition
27 Cartel conduct 2 - - - -
prohibition
28 Exclusionary 4, also 2 - - - -
provisions and 3
29 Price 3 0.64 - - 0.64
signalling and
concerted
practices
32 Third-line 7 -3.6 - - -3.6
forcing test
34 Resale price 8, also 9 0.16 - - 0.16
maintenance
35 Mergers 9 - - - -
36 Secondary 6 - - - -
boycotts
38 Authorisation 9 - - - -
and
notification
39 Class 9 -0.45 - - -0.45
exemption
power
40 Power to 11 -1.3 - - -1.3
obtain
information,
documents
and evidence
41 Admissions of 10 - - - -
fact
42 Access to 12 - - - -
services
54 Collective 9 0.01 - - 0.01
bargaining
and collective
boycotts
Total: $-4.54m per year
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Regulation impact statement
Implementation and evaluation
15.65 Implementation of the amendments contained in this Bill will be
undertaken jointly by the Government and the Commission.
15.66 Concurrently with the release of the exposure draft legislation,
the Commission consulted on a draft Framework for concerted practices
guidelines. The feedback from this consultation will inform the
development of the Commission's final guidelines, which will detail its
approach to the interpretation and enforcement of section 45 as amended.
15.67 The Commission will be responsible for approving forms for use
in applications for authorisations, notification of exclusive dealing or
resale price maintenance and notification of collective bargaining (under
sections 89, 93 and 93AB respectively).
15.68 Prior to exercising its new power to make, vary or revoke a class
exemption, it is expected that the Commission will undertake consultation
with the affected industry and other relevant parties to determine the most
appropriate scope of the class exemption.
15.69 Implementing the measures in this Bill is expected to:
• reduce overall compliance costs for those subject to the law;
• increase competition in affected markets;
• strengthen competition laws and better facilitate long-term
productivity growth.
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Chapter 16
Statement of Compatibility with Human
Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Competition and Consumer Amendment (Competition Policy Review) Bill
2017
16.1 This Bill is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3
of the Human Rights (Parliamentary Scrutiny) Act 2011.
Schedule 1 - Definition of competition
Overview
16.2 Schedule 1 to this Bill amends the definition of 'competition' in
section 4 of the Act, to clarify that competition includes competition from
goods and services that are capable of importation and not just goods and
services actually imported.
16.3 This reflects the fact that even if goods and services are not
ultimately imported, the credible threat of importation can exert
competitive pressure on, and affect competition in, Australian markets.
Human rights implications
16.4 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
16.5 This Schedule is compatible with human rights as it does not
raise any human rights issues.
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Schedule 2 - Cartels
Overview
16.6 Schedule 2 to this Bill makes a number of amendments to
simplify the provisions on cartel conduct and better target
anti-competitive conduct.
16.7 The application of the provisions is confined to cartel conduct
affecting competition in Australian markets, to align with the Act's
objective of enhancing the welfare of Australians. This is achieved by
adding the words 'in trade or commerce' to various provisions. Trade or
commerce is defined in section 4 to mean trade or commerce within
Australia or between Australia and places outside Australia.
16.8 The scope of the joint venture exceptions in sections 44ZZRO
and 44ZZRP is modified to more appropriately exempt legitimate joint
ventures.
16.9 The amended exceptions are:
• broadened to apply to arrangements or understandings (in
addition to contracts);
• broadened to apply to joint ventures for the acquisition of
goods or services (in addition to the production or supply of
goods or services); and
• limited to cartel provisions that are for the purposes of, and
reasonably necessary for undertaking, the joint venture.
16.10 The joint venture exceptions are also tightened so they do not
apply to joint ventures that are carried on for the purpose of substantially
lessening competition. This ensures that the exceptions are confined to
joint ventures established for genuine commercial purposes.
16.11 The joint venture exceptions are also amended to increase the
standard of proof that a defendant must discharge in raising the relevant
exception (from an evidential burden to a 'balance of probabilities' in a
civil action, and a 'legal burden' in a criminal action).
16.12 Finally, the 'output restriction' purpose condition in paragraph
44ZZRD(3)(a) is broadened to address any gap resulting from the repeal
of the separate prohibition on exclusionary provisions by Schedule 3 to
this Bill.
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Human rights implications
16.13 The amendments to confine the cartel provisions to conduct
affecting competition in Australian markets, and the broadening of the
'output restriction' purpose condition, do not raise any human rights
issues.
16.14 This Schedule engages the right to the presumption of
innocence, as contained in Article 14(2) of the International Covenant on
Civil and Political Rights (ICCPR), insofar as it:
• introduces new matters that the defendant must establish to
raise the relevant joint venture exception (that the joint
venture is not carried on for the purpose of substantially
lessening competition, and that the relevant provision is
reasonably necessary for undertaking the joint venture); and
• increases the burden on the defendant to a legal burden rather
than an evidential burden.
16.15 A 'reverse onus provision' may be considered a limitation on the
right to the presumption of innocence when charged with a criminal
offence. This is not an absolute right. Schedule 2 does not create new
reverse onus provisions, as the joint venture exceptions already place an
evidential burden on the defendant. Rather, Schedule 2 amends existing
reverse onus provisions.
16.16 The addition of new matters that the defendant must establish, in
order to raise the relevant joint venture exception, is appropriate in light of
the exceptions being broadened to be available in a greater range of
circumstances. The new matters to be established also reflect the
extremely broad definition of 'joint venture' in section 4J. That definition
does not, itself, contain any express limitations on the purposes for which
a joint venture may be carried on. It is therefore necessary to include in
the exceptions a limitation that the joint venture must not be carried on for
the purpose of substantially lessening competition. This limitation ensures
that the exceptions may be made more widely available, without
undermining the integrity of the cartel conduct prohibitions.
16.17 Similarly, the increase in the burden of proof on the defendant is
appropriate and justifiable in light of the extension of the exceptions to
arrangements or understandings containing a cartel provision. Currently,
the exceptions only apply to cartel provisions contained in a contract, and
in those circumstances it is appropriate for the defendant to be under a
lower, evidential burden because the primary evidence as to the nature of
the claimed joint venture would be before the court (in the contract). Once
the relevant exception is raised by the defendant, the prosecution would
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then have to discharge its burden to the applicable standard (balance of
probabilities in a civil action, and beyond reasonable doubt in a criminal
action) and thereby disprove the exception.
16.18 In contrast, the amended exceptions are extended to
arrangements and understandings, in which case the joint venture
provision may be contained in informal documents, contained across
several documents, or not be contained in any form of written
documentation (for example, the provision may have been verbally
discussed in one or more conversations). In such cases, it is likely to be
relatively easy and inexpensive for a defendant to produce evidence
suggesting a reasonable possibility that their joint venture falls within the
relevant exception (that is, to meet an evidential burden) even if the joint
venture in fact does not satisfy the elements of the relevant exception.
16.19 However, it would be extremely difficult and expensive for the
prosecution to obtain sufficient evidence to prove in the first instance, to
the applicable standard, that the relevant exception did not apply. The
prosecution would effectively be required to prove a negative, and the
evidence needed to do this may be known only to, and held by, the
defendant. This practical difficulty may create scope for abuse of the joint
venture exceptions by parties who are not genuinely engaged in a joint
venture to which the exceptions apply.
16.20 In these circumstances, it is reasonable and appropriate to
require the defendant to produce stronger evidence as to the nature of the
claimed joint venture. The defendant will be in a unique position to easily
and cheaply produce such evidence, as they will have ready access to the
full range of formal and informal correspondence between the parties.
16.21 It is important to note that the increase in the legal burden on the
defendant does not establish a presumption that, unless the defendant
discharges that burden, the defendant is guilty of contravening the cartel
conduct provisions. The prosecution must still prove the contravention to
the requisite standard.
Conclusion
16.22 This Schedule is compatible with human rights as it raises, but
does not unnecessarily, unreasonably or disproportionately limit, the right
to the presumption of innocence.
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Schedule 3 - Price signalling and concerted practices
Overview
16.23 Schedule 3 to this Bill repeals Division 1A of Part IV of the Act,
which relates to the anti-competitive disclosure of pricing and other
information (known as 'price signalling').
16.24 The price signalling provisions are confined to the banking
industry and no cases have been brought for contravention of the
provisions since their introduction in 2012. Further, the Harper Review
found that the price signalling provisions have the potential to overreach
and capture pro-competitive disclosures.
16.25 As recommended by the Harper Review, Schedule 3 repeals
Division 1A of Part IV of the Act, and expands section 45 to prohibit a
corporation from engaging with one or more other persons in a concerted
practice with the purpose, effect or likely effect of substantially lessening
competition.
16.26 The defences and exceptions applicable to section 45 are also
extended to cover concerted practices. Further, an exemption is introduced
for circumstances where the only parties to a concerted practice are the
Crown (in right of the Commonwealth, a State or a Territory) and one or
more authorities of that Crown, to reflect the fact that although such
entities may engage in trade or commerce, they cannot benefit from the
exception for related bodies corporate.
16.27 As detailed in this Chapter under 'Schedule 4 - Exclusionary
provisions', Schedule 3 to this Bill also repeals subparagraphs 45(2)(a)(i)
and 45(2)(b)(i) to remove the separate prohibition on exclusionary
provisions from the Act.
Human rights implications
16.28 Insofar as the existing defences and exceptions in section 45 are
extended to cover concerted practices, and a new exemption is created for
related bodies politic, this Schedule may appear to engage the right to the
presumption of innocence as contained in Article 14(2) of the ICCPR.
16.29 However, that right only applies to criminal offences and
therefore is not applicable to section 45 and its exceptions. Further, these
amendments are in the interests of entities subject to section 45, as they
ensure there are appropriate exceptions available to the new prohibition on
concerted practices.
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Conclusion
16.30 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 4 - Exclusionary provisions
Overview
16.31 Schedule 4 to this Bill repeals the definition of 'exclusionary
provision', as the repeal of the separate prohibition on exclusionary
provisions by Schedule 3 makes the definition redundant.
16.32 The Harper Review found there is significant overlap between
what constitutes an exclusionary provision and what constitutes an 'output
restriction' or a 'market sharing or division' cartel provision. Given the
lack of an anti-overlap provision to prevent both prohibitions applying to
the same conduct, this creates uncertainty and complexity in the law.
16.33 Consequential to the repeal on the separate prohibition on
exclusionary provisions, a defence specific to that prohibition
(section 76C) is also repealed as it is now redundant.
Human rights implications
16.34 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
16.35 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 5 - Covenants affecting competition
Overview
16.36 Schedule 5 to this Bill inserts definitions of 'contract' and
'party' into the Act and defines those terms to include covenants.
16.37 A number of provisions of the Act which refer to contracts,
arrangements or understandings are largely duplicated with reference to
covenants. While there is a technical, legal difference between a contract
and a covenant, the Harper Review found that this distinction made little
to no impact on the agreement's effect on competition, and was therefore
unnecessary for the purposes of the Act.
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16.38 By including covenants within the definitions of 'contract' and
'party', the separate provisions on covenants are made redundant and are
therefore repealed by Schedule 5.
Human rights implications
16.39 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
16.40 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 6 - Secondary boycotts
Overview
16.41 Schedule 6 to this Bill increases the maximum penalty applying
to breaches of the secondary boycott provisions (sections 45D and 45DB).
16.42 Under section 76, a corporation found to be in breach of the
secondary boycott provisions is liable to a maximum civil pecuniary
penalty of $750,000. This is disproportionately low when compared to the
maximum penalty under section 76 for various other breaches of the Act,
which may be $10 million or higher.
16.43 The Harper Review saw no reason why the penalty for breaches
of the secondary boycott provisions should be significantly lower than the
penalty for other breaches, particularly given the harm to trading freedom,
and therefore to competition, which secondary boycotts cause.
16.44 The amendment made by Schedule 6 aligns the penalty for
breaches of the secondary boycott provisions with the penalties for other
breaches of the competition law.
Human rights implications
16.45 As far as it relates to engaging in boycott activity, Schedule 6
may engage work-related rights as contained in the International
Covenant on Economic, Social and Cultural Rights (ICESCR), in
particular Article 8 which relates to the activities of trade unions.
16.46 However, section 45DD makes it clear that boycotts are
permitted under the competition law if the dominant purpose of the
conduct relates substantially to employment matters, i.e. remuneration,
conditions of employment, hours of work or working conditions.
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Consequently, the increased penalty in section 76 is only applicable to
secondary boycotts with a dominant purpose that does not relate to
employment matters.
16.47 Where a secondary boycott has a dominant purpose not related
to employment matters, but a non-dominant purpose that does relate to
employment matters, the boycott may be prohibited under section 45D or
45DB. To this extent, sections 45D and 45DB may engage the rights
described in Article 8 of the ICESCR.
16.48 However, Schedule 6 does not create a new regulation on the
activities of trade unions, nor does it alter the scope of the existing
prohibitions. Rather, Schedule 6 increases the penalty for the existing
prohibitions in sections 45D and 45DB, to align with the maximum
penalties applicable to other breaches of the competition law.
16.49 The existing limitation is necessary to protect the broader
economic welfare of Australians by preventing secondary boycotts which
are harmful to competition and are not justified by a dominant purpose
which is substantially related to employment matters. The increase is
reasonable, as it brings the maximum penalty for a breach of the
secondary boycott provisions in line with, and does not exceed, the
maximum penalties for other breaches of the competition law. Further, the
increased penalty is proportionate relative to the other penalties in the Act
and relative to the level of harm that can be caused by the conduct which
the penalty seeks to deter.
Conclusion
16.50 This Schedule is compatible with human rights as it engages, but
does not further limit, work-related rights in the ICESCR.
Schedule 7 - Third line forcing
Overview
16.51 Schedule 7 to this Bill amends the Act to only prohibit third line
forcing where it has the purpose, effect or likely effect of substantially
lessening competition.
16.52 Third line forcing is prohibited in section 47 along with various
other forms of exclusive dealing. However, it is the only form of exclusive
dealing which is prohibited on a per se basis; the other forms, including
second line forcing (or 'bundling') are prohibited only if they have the
purpose, effect or likely effect of substantially lessening competition.
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16.53 The Harper Review found there was no need for third line
forcing to be prohibited on a per se basis while similar forms of exclusive
dealing are prohibited where they have the purpose, effect or likely effect
of substantially lessening competition.
16.54 This amendment ensures that all forms of exclusive dealing are
assessed under the same test.
Human rights implications
16.55 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
16.56 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 8 - Resale price maintenance
Overview
16.57 Schedule 8 to this Bill amends the resale price maintenance
(RPM) and notification provisions, to allow a corporation or person to
notify the Commission of RPM conduct as an alternative to seeking
authorisation.
16.58 RPM is prohibited under section 48 on a per se basis, and
authorisation is available for RPM. However, applications for
authorisation for RPM are rare, and the Harper Review considered that the
cost and delay involved with seeking authorisation may be a real deterrent
to businesses seeking authorisation for RPM.
16.59 As recommended by the Harper Review, the amendments by
Schedule 8 (and also Schedule 9) make notification available as an
alternative means of seeking exemption from the RPM prohibition in
section 48. Notification is generally a quicker and less expensive process
than authorisation.
16.60 Schedule 8 also introduces an exception for RPM conduct
between related bodies corporate, reflecting the general tenet of
competition law that the companies within a corporate group are treated as
a single economic entity and are not considered to be competitors.
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Human rights implications
16.61 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
16.62 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 9 - Authorisations, notifications and class exemptions
Overview
16.63 Schedule 9 to this Bill amends the notification and authorisation
provisions in Part VII to simplify the provisions and processes, and grants
the Commission new 'stop notice' and 'class exemption' powers.
Schedule 9 also amends Part IX, which relates to Australian Competition
Tribunal (Tribunal) review of determinations of the Commission.
Authorisation process and Tribunal review
16.64 Currently, the process for merger authorisations is separate to
the general authorisation process, and the Tribunal is the first instance
decision-maker for merger authorisations, rather than the Commission.
Further, the Act currently provides for formal merger 'clearance' in
addition to authorisation.
16.65 Schedule 9 consolidates the various authorisation provisions into
a single authorisation process, by repealing Division 3 of Part VII which
contains the merger authorisation and clearance provisions, and amending
Division 1 of Part VII to incorporate merger authorisations within the
general authorisations provisions. The provisions on formal merger
clearances are not incorporated into Division 1, as the provisions are
unduly complex and had never been used.
16.66 Given the commercial and time sensitivity of merger
transactions, merger authorisations are subject to a number of procedures
that are different to other types of authorisations. The main distinction is
that domestic merger authorisations must be determined by the
Commission in 90 days, rather than 6 months. Some of the procedures
applicable to non-merger authorisations (e.g. draft determination and
opportunity for a conference under section 90A) are not feasible within
this shorter timeframe, and are therefore not applicable to merger
authorisations.
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Class exemptions
16.67 Under the current Part IV, common business practices may be
captured by one or more prohibitions despite there being no competition
or public interest concerns. To seek exemption, businesses must
individually make a notification or apply for authorisation (as applicable),
and the Commission must individually assess each notification and
application for authorisation.
16.68 Schedule 9 grants the Commission a power to make a 'class
exemption' for business practices ('conduct of a kind') that do not
generate competition concerns or are likely to generate a net public
benefit. This reduces compliance and administration costs, increases
certainty and creates safe harbours for businesses.
16.69 A class exemption will take the form of a legislative instrument,
and consistently with subsection 33(3) of the Acts Interpretation Act 1901,
the Commission's power to make the class exemption includes a power to
vary or revoke that class exemption.
16.70 The Commission also has a power under section 95AB to
withdraw the benefit of a class exemption in a particular case, where the
conduct has the actual or likely effect of substantially lessening
competition and this detriment would not be outweighed by an actual or
likely benefit to the public.
Collective bargaining notifications and stop notices
16.71 Currently, collective bargaining may be prohibited under the
cartel provisions in Division 1 of Part IV of the Act, or under section 45
which deals with contracts, arrangements or understandings that restrict
dealings or affect competition. However, collective bargaining is not
always detrimental to competition and consumer welfare. For example, if
smaller businesses are, together, able to negotiate with bargaining power
equal to one large firm, this may achieve a more efficient and
pro-competitive outcome. Similarly, in some circumstances, collective
boycotts can be an appropriate tool to support collective bargaining.
16.72 While it is possible to include collective boycott conduct in a
notification for collective bargaining, such notifications are relatively rare,
and this may be due to a belief that a notification including collective
boycott conduct will not be approved by the Commission.
16.73 The Harper Review recommended reforming the notification
provisions to introduce greater flexibility into the notification process for
collective bargaining, and thereby encourage greater use of the process by
small businesses.
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16.74 This includes a power for the Commission to impose conditions
on notifications involving collective boycott activity, and a 'stop notice'
power allowing the Commission to require collective boycott conduct to
cease where it causes imminent, serious public detriment.
Human rights implications
Authorisation process and Tribunal review
16.75 Insofar as the jurisdiction of the Tribunal is altered, so that it is
no longer the first instance decision-maker for merger authorisations, this
engages fair trial and fair hearing rights.
16.76 However, by making the Commission the first instance
decision-maker for merger authorisations, this allows the Tribunal to
undertake merits review of the decision. Currently, the only means of
appealing the Tribunal's decision on a merger authorisation is to take the
matter to the Federal Court. This amendment provides an additional
avenue of review which was not previously available, which promotes fair
trial and fair hearing rights.
16.77 While the Tribunal's review of general authorisation
determinations is a full re-hearing of the matter, in the case of mergers the
review is to be based on the material before the Commission. This aspect
of Schedule 9 also engages fair trial and fair hearing rights as the rules of
evidence are regulated in reviews before the Tribunal. However, this
limitation is reasonable and necessary to ensure that parties present all
relevant evidence to the Commission in an application for merger
authorisation. This limitation also ensures that the Tribunal review process
cannot be used vexatiously to damage a merger transaction, by effectively
turning the review into a full rehearing.
16.78 Further, this limitation is not absolute and a mechanism is in
place to ensure applicants for review are not unreasonably or
unnecessarily disadvantaged. Where evidence was not in existence at the
time of the initial application, the Tribunal may allow that new evidence
to be produced. This appropriately balances the interests of all parties to a
Tribunal review in relation to a merger authorisation.
Class exemptions
16.79 Insofar as the determination of a class exemption is not subject
to merits review by the Tribunal, this may appear to engage fair trial and
fair hearing rights as contained in Article 14 of the ICCPR. However, as
class exemptions are legislative instruments, it is not appropriate that the
determination of a class exemption should be reviewable by a Tribunal
conducting merits review. Rather, class exemptions will be disallowable
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by the Parliament. Insofar as the Commission has the power to withdraw
the benefit of a class exemption in particular cases, fair trial and fair
hearing rights are engaged. However, such rights are promoted by
Schedule 9 because the Commission's decision to withdraw the benefit of
a class exemption in an individual case is reviewable by the Tribunal.
Collective bargaining notifications and stop notices
16.80 Insofar as it deals with collective bargaining and collective
boycotts, Schedule 9 may appear to engage work-related rights as
contained in the ICESCR, in particular Article 8 which relates to the
activities of trade unions. However, such rights are not engaged, for a
number of reasons.
16.81 Firstly, unlike secondary boycotts, collective bargaining and
collective boycotts are engaged in by two or more corporations, rather
than two or more persons or a trade union comprised of persons.
16.82 Secondly, collective bargaining and collective boycotts are not
engaged in for reasons relating to employment matters. Rather, they are
typically engaged in because there is an inequality of bargaining power
between corporations who are trading with each other.
16.83 Thirdly, while the Commission has the power to issue a stop
notice requiring collective boycott activity to cease, this is justified
because the power is only exercisable to prevent imminent serious public
detriment. Further, the Commission may currently achieve the same
objective of preventing public detriment by not allowing a notification to
stand in the first place.
16.84 For these reasons, work-related rights are not engaged by
aspects of Schedule 9 relating to collective bargaining or collective
boycotts, including stop notices.
Conclusion
16.85 This Schedule is compatible with human rights as it engages, but
does not unreasonably or unnecessarily limit fair trial and fair hearing
rights as contained in Article 14 of the ICCPR.
Schedule 10 - Admissions of fact
Overview
16.86 Schedule 10 to this Bill extends section 83 of the Act so that a
party bringing certain proceedings may rely on both admissions of fact
and findings of fact made in certain other proceedings.
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16.87 Currently, section 83 allows for findings of fact made by a court,
in certain proceedings against a corporation, to be used as prima facie
evidence against the corporation in certain other proceedings. This section
helps to reduce the costs for private litigants, who may rely on findings of
fact without the cost and delay associated with establishing the same fact
again.
16.88 This amendment is intended to further facilitate access to justice
by reducing the cost for private litigants to pursue actions against
corporations for breaches of the competition law.
16.89 An admission of fact made in certain proceedings will only be
prima facie evidence of that fact in certain other proceedings, if that
admission is proven by either:
• a document under the seal of the court from which the
admission appears; or
• a document from which the admission appears that is filed
with the court.
Human rights implications
16.90 This Schedule engages fair trial and fair hearing rights as
contained in Article 14 of the ICCPR, as it regulates the rules of evidence
before the Court by placing limitations as to how admissions of fact made
in earlier proceedings may be used as prima facie evidence of that fact in
later proceedings.
16.91 However, this limitation is necessary to ensure that an admission
of fact may only be relied upon as prima facie evidence in later
proceedings where it has been put before the court in the initial
proceedings, and thereby tested by that court.
16.92 Insofar as this Schedule allows for an admission by a person to
be used against that person in subsequent proceedings, this Schedule
appears to engage the right against self-incrimination as also contained in
Article 14(3)(g) of the ICCPR. However, that right generally protects a
person from being compelled to testify against themselves or to confess
guilt.
16.93 An admission of fact can only be proven by a document which
was filed with the court in the first proceedings by the person making the
admission. The person making the admission will be the person against
whom the subsequent proceedings are brought, and who was found in the
first proceedings to have contravened, or to have been involved in a
contravention of, certain provisions of the Act. The person will have
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voluntarily made the admission, and nothing in section 83 provides for a
person to be compelled to make such an admission.
16.94 Further, the application provision of Schedule 10 ensures that
admissions of fact can only be relied upon if they are made on or after the
commencement of Schedule 10. This ensures that past admissions cannot
be relied upon for a purpose which the person making the admission was
unaware of at the time of the admission, and future admissions will be
made with the knowledge as to how they may be used in subsequent
proceedings.
Conclusion
16.95 This Schedule is compatible with human rights as it engages, but
does not unreasonably or unnecessarily limit, fair trial and fair hearing
rights, including the right against self-incrimination, as contained in
Article 14 of the ICCPR.
Schedule 11 - Power to obtain information, documents and evidence
Overview
16.96 Schedule 11 to this Bill extends the Commission's power to
obtain information, documents and evidence in section 155, to allow
section 155 notices to be issued in relation to additional matters.
16.97 The Commission may now issue a section 155 notice to
investigate alleged contraventions of court enforceable undertakings given
under section 87B of the Act or section 218 of the Australian Consumer
Law. This extension was recommended by the Harper Review, and
protects the integrity of such undertakings.
16.98 The Commission may now also issue a section 155 notice to
investigate matters relevant to the Commission's determination in relation
to an application for merger authorisation under subsection 90(1). This
reflects the fact that the Commission is now the first-instance
decision-maker for merger authorisation applications.
16.99 Schedule 11 also introduces a new 'reasonable search' defence
to the offence of refusing or failing to comply with section 155, as
recommended by the Harper Review. This defence recognises that strict
compliance with a section 155 notice may be very costly depending on the
circumstances. However, a person wishing to rely on the reasonable
search defence is under a legal burden.
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16.100 Finally, Schedule 11 also increases the fine for non-compliance
with section 155, as recommended by the Harper Review, in line with
similar notice-based evidence gathering powers of other regulators.
Human rights implications
16.101 Schedule 11 may engage a number of the applicable rights or
freedoms.
16.102 Firstly, insofar as Schedule 11 requires the production of
information, documents or evidence, and depending on the nature of the
material requested, this may appear to engage both legal professional
privilege or the right against self-incrimination.
16.103 In relation to the right against self-incrimination, as contained in
Article 14(3)(g) of the ICCPR, the existing subsection 155(7) already
engages and places a limitation on that right. That subsection provides that
a person is not excused from producing information, documents or
evidence on the basis that such material would tend to incriminate that
person or expose that person to a penalty. The amendments to
Schedule 11 do not further limit the right against self-incrimination,
except to the extent that section 155 notices may now be issued in relation
to additional matters. However, subsection 155(7) ensures that
self-incriminating material cannot be used against that person in any
criminal proceedings other than proceedings for an offence against
section 155. Therefore, to the extent that section 155 engages the right
against self-incrimination, the right is not unreasonably or
disproportionately limited because the use of any self-incriminating
material produced in response to a section 155 notice is extremely
restricted.
16.104 In relation to legal professional privilege, subsection 155(7B)
makes clear that a person is not required to produce a document that
would disclose information that is the subject of legal professional
privilege. The amended section 155 will still be subject to
subsection 155(7B), which prevents any abrogation of legal professional
privilege.
16.105 Secondly, any amendment to an information-gathering power
such as section 155 may appear to engage the right to privacy as contained
in Article 17 of the ICCPR. However section 155 contains limitations on
when a section 155 notice can be issued; the Commission must have
reason to believe the material requested relates to a possible contravention
of the Act, or is relevant to specific decisions the Commission is required
to make under the Act (such as determining a merger authorisation). This
limitation means that a section 155 notice will request information,
documents and evidence related to conduct, not personal information.
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Further, the use of this power is subject to additional restrictions. To the
extent that the material requested in a section 155 notice may also contain
personal information, the Commission must comply with the requirements
of the Privacy Act 1988, which provides for the protection of personal
information and among other matters sets standards for the collection and
use of personal information.
16.106 Thirdly, to the extent that the amendments to section 155 are
applied retrospectively, this may appear to engage the prohibition on
retrospective criminal laws as contained in Article 15 of the ICCPR.
However, the retrospective application provision only makes the
reasonable search defence available for notices given before the
commencement of Schedule 11. The increased penalty for non-
compliance with a section 155 notice does not apply retrospectively.
16.107 Finally, the fact that a defendant is under a legal burden to
establish the 'reasonable search' defence engages the right to the
presumption of innocence as contained in Article 14(2) of the ICCPR.
This is not an increase in an existing burden, but rather the burden deemed
reasonable, necessary and appropriate in order to create a new defence
that was not previously available.
16.108 The reasonable search defence means that a person will not be
guilty of an offence under subsection 155(6A) to the extent the section
155 notice relates to producing documents, and after a reasonable search
the person is not aware of the documents, and that person has provided the
Commission with a written response to the notice which includes a
description of the scope and limitations of the search.
16.109 The facts amounting to whether a reasonable search has been
conducted will be uniquely within the knowledge of the defendant. For
example, only a defendant will know how many documents it could
possibly have searched, and how many documents were actually searched.
With this knowledge, the defendant could easily and cheaply produce
evidence to establish, on the balance of probabilities, the elements of the
defence. By contrast, it would be extremely costly and difficult for the
prosecution to discover, through its own investigations, evidence
sufficient to prove a negative: that the defendant did not conduct a
reasonable search.
16.110 In these circumstances, it would not be appropriate to introduce
the concept of a 'reasonable search' as either an element of the offence, or
a defence with an evidential burden, without significantly undermining the
Commission's primary power for conducting investigations and enforcing
the Act.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Conclusion
16.111 This Schedule is compatible with human rights as it engages, but
does not unreasonably, unnecessarily or disproportionately limit:
• the right against self-incrimination;
• legal professional privilege;
• the prohibition on retrospective criminal laws; and
• the right to the presumption of innocence.
Schedule 12 - Access to services
Overview
16.112 Schedule 12 to this Bill amends Part IIIA of the Act, which
contains the National Access Regime (Regime), to ensure that it better
addresses the economic problem of an enduring lack of effective
competition in markets for nationally significant infrastructure services.
16.113 The primary changes included in this Schedule are to:
- amend and clarify the declaration criteria that must be used by
the Council and designated Minister;
- amend the default position, whereby the Minister is now deemed
to have made a decision in accordance with the declaration
recommendation of the Council if they have not responded
within 60 days; and
- amend and clarify the scope of a determination made by the
Commission to 'extend' a facility in an access dispute.
- provide the Minister with power to revoke certification on
recommendation by the Council, if the regime ceases to be
effective.
Human rights implications
16.114 This Schedule creates a new power for the Commonwealth
Minister to decide to revoke a decision made under section 44N to certify
that a regime established by a State or Territory for access to a service is
an effective access regime. Item 37, new subsection 44O(1A) establishes
that this decision is reviewable by the Tribunal.
162
Statement of Compatibility with Human Rights
16.115 This engages fair trial and fair hearing rights as contained in
Article 14 of the ICCPR, as it alters the jurisdiction of the Tribunal.
However, the change promotes these rights, as it adds to the rights of
review already available under the Act.
16.116 This Schedule inserts a new section 44FA(4) to establish a
process for the Council to make information it receives in response to a
notice under section 44FA(1) publicly available, subject to any
confidentiality concerns.
16.117 This engages the right to privacy under Article 17 of the ICCPR,
but given the nature of the information that is likely to be received
pursuant to a section 44FA(1) notice, it does not infringe upon this right.
Moreover, the changes in section 44FA(4) protect this right by
establishing that a person who provided information in response to a
section 44FA(1) notice can require that it be returned to them.
Conclusion
16.118 This Schedule is compatible with human rights as it engages but
does not unreasonably, unnecessarily or disproportionately limit fair trial
and fair hearing rights and the right to privacy.
Schedule 13 - Transitional provisions
Overview
16.119 Schedule 13 to this Bill inserts a new Division 3 into Part XIII
of the Act, which details the transitional application of amendments made
by a number of other Schedules to this Bill.
16.120 The new transitional provisions deal with:
• The application of the amended definition of 'competition';
• Existing orders under section 87 relating to contravention of
section 45B;
• Authorisations granted under section 88 before
commencement;
• Notifications made under section 93 before commencement;
and
• Applications for merger clearances and authorisations made,
and not determined, before commencement.
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Human rights implications
16.121 This Schedule does not engage any of the applicable rights or
freedoms.
Conclusion
16.122 This Schedule is compatible with human rights as it does not
raise any human rights issues.
Schedule 14 - Other amendments
Overview
16.123 Schedule 14 to this Bill implements measures to streamline the
administration of the Competition and Consumer Act 2010 (the Act) to
reduce compliance burdens for business, individuals and within
Government, while preserving the protections available under the Act.
The Bill has a particular focus on the requirements of the ACL, which is
set out in Schedule 2 of the Act.
16.124 Specifically, Schedule 14:
• removes the requirement for private litigants to seek
Ministerial consent to bring an action for a breach of the Act
that takes place overseas (Part 1);
• extends the jurisdiction of State and Territory courts to hear
actions under the Act for pyramid selling and unsafe goods
liability (Part 2);
• removes a redundant requirement for the ACCC to keep
certain records (Part 3) and rectifies drafting errors relating to
overlap with the Criminal Code Act 1995 (Part 5) and the
application of a misleading conduct provision in the ACL
(Part 7);
• permits the disclosure of certain information by the ACCC to
specific agencies where it is reasonably necessary to protect
public safety (Part 4);
• clarifies the requirements in the ACL regarding the cooling
off period for unsolicited consumer agreements (Part 6); and
• permits the ACCC to seek a court order directing a person to
comply with a notice to furnish information, produce
documents or give evidence (Part 8).
164
Statement of Compatibility with Human Rights
Human rights implications
16.125 Aside from Part 4, Schedule 14 does not engage any of the
applicable rights or freedoms.
16.126 Part 4 of Schedule 14 improves the ACCC's ability to share
notices it receives under section 132A of the ACL with specified agencies
where it is reasonably necessary to protect public safety. To the extent that
a particular notice contains personal information, its disclosure may
engage the right to privacy under Article 17 of the ICCPR. However, to
the extent that a particular notice contains personal or confidential
information, the disclosure of such notices to other agencies or bodies
following the implementation of Part 4 of Schedule 14 will still be
required to comply with the law, including the Privacy Act 1988.
Specifically, the Privacy Act 1988 provides for the protection of personal
information in the Commonwealth public sector and private sector and
sets the standard for the collection, storage, security, use, disclosure and
quality of personal information.
16.127 The Privacy Act 1988 also creates obligations on agencies and
organisations regarding access to, and correction of, an individual's own
personal information. Further, the disclosure of information permitted by
Part 4 is restricted by the requirement that the regulator be satisfied that
the disclosure is reasonably necessary to protect public safety.
Conclusion
16.128 This Schedule is compatible with human rights as it does not
raise any human rights issues (aside from Part 4) The amendment in Part 4
of Schedule 14 is consistent with Article 17 of the ICCPR because, to the
extent the amendment authorises the disclosure of confidential
information, this is necessary to achieve a legitimate public purpose and
any disclosure is subject to the protections of the Privacy Act 1988.
165
Index
Schedule 1: Definition of competition
Bill reference Paragraph number
Item 1, subsection 4(1) 1.8
Schedule 2: Cartels
Bill reference Paragraph number
Items 1, 9 and 10, subsection 44ZZRD(5) and paragraphs 6(2C)(h) 2.43
and 44ZZRD(7)(a)
Item 2, subparagraph 44ZZRD(3)(a)(iv) 2.37, 3.43
Items 3 to 8, subsection 44ZZRD (note), paragraphs 44ZZRD(4)(c) 2.13
to (e), 44ZZRD(4)(f), 44ZZRD(4)(g), 44ZZRD(4)(h),
44ZZRD(4)(ha), 44ZZRD(4)(i) and 44ZZRD(4)(j)
Item 5, subsection 45(8AA) 3.15
Items 11, 12 and 17, subsections 44ZZRO(1) and 44ZZRP(1) 2.19
Items 12, 15, 17 and 20, subsections 44ZZRO(1), 44ZZRO(1)(note), 2.28
44ZZRP(1) and 44ZZRP(2)
Items 13 and 18, paragraphs 44ZZRO(1)(a) and 44ZZRP(1)(a) 2.22
Items 13 and 18, paragraphs 44ZZRO(1)(ba) and 44ZZRP(1)(ba) 2.25
Items 13 and 18, paragraphs 44ZZRO(1)(b) and 44ZZRP(1)(b) 2.20
Items 14 and 19, paragraphs 44ZZRO(1)(c), 44ZZRO(1)(d), 2.42
44ZZRP(1)(c) and 44ZZRP(1)(d)
Item 16, subsections 44ZZRO(2) to 44ZZRO(4) 2.45
Item 16, subsections 44ZZRO(1A) and 44ZZRO(1B) 2.44
Items 21 to 37, subsections 44ZZRD(4)(note), 44ZZRD(5), 2.46
44ZZRO(1), 44ZZRO(1A) to 44ZZRO(5), 44ZZRP(1),
44ZZRP(1A) and 44ZZRP(2), paragraphs 44ZZRD(4)(c) to
44ZZRD(4)(e), 44ZZRD(4)(f), 44ZZRD(4)(g), 44ZZRD(4)(h),
44ZZRD(4)(ha), 44ZZRD(4)(i), 44ZZRD(j), 44ZZRD(7)(a),
44ZZRO(1)(a), 44ZZRO(1)(b), 44ZZRO(1(c), 44ZZRO(1)(d),
44ZZRP(1)(a), 44ZZRP(1)(b), 44ZZRP(1)(c) and 44ZZRP(1)(d) and
subparagraph 44ZZRD)(3)(a)(iv) of Schedule 1 to the Act
Item 38, Division 1 of Part IV 2.39
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Item 39, Division 1 of Part 1 of Schedule 1 to the Act 2.40
Item 40 2.41
Schedule 3: Price signalling and concerted practices
Bill reference Paragraph number
Item 1, Division 1A of Part IV 3.13
Item 1, subsections 45(1), 45(2) and 45(3) 3.16
Item 1, paragraphs 45(1)(a) and 45(1)(b) 3.33
Item 1, paragraph 45(1)(c) 3.34
Item 1, paragraph 45(2) 3.35
Item 1, paragraph 45(3)(b) 3.37
Items 2, 4 and 5, subsections 45(1) to 45(3),45(6) 45(7) and 45(8) 3.14
Item 2, subsections 45(1) to 45(3) 3.41
Items 3, 11 to 15, 17 and 21 to 29, subsections 45(5A), 45(8A), 3.44
45(9), 51(4),93AC(2), 166(1) and 166(3), paragraphs 4(2)(a),
4(2)(b), 6(2)(d), 51(2)(b), 84(1)(b), 84(3)(b), 93AB(1)(a) and
93AB(1)(b) and subparagraph 6(2)(b)(i)
Item 5, subsection 45(8AA) 3.29
Item 5, subsections 45(6) to 45(8) 3.39
Items 6 to 10 and 30 to 37, Division 1A of Part 1 of Schedule 1, 3.45
subsections 45(1) to 45(3), 45(5A), 45(6), 45(7) to 45(9), 51(2AA)
and 51(4), and paragraphs 51(2)(a), 51(2)(aa), 51(2)(b), 51(2)(c),
51(2)(d) and 51(2)(g) of Schedule 1 to the Act
Item 9, subsection 45(5A) 3.38
Items 16, 18, 19 and 20, subsection 51(2AA), paragraphs 51(2)(a), 3.40
51(2)(aa), 51(2)(c), 51(2)(d) and 51(2)(g)
Schedule 4: Exclusionary provisions
Bill reference Paragraph number
Item 1, section 4D 3.42, 4.12
Item 2, section 76C 4.14
Items 3-5, subsections 93AC(1) and 10.08(1) 4.15
168
Index
Schedule 5: Covenants affecting competition
Bill reference Paragraph number
Item 1, subsection 4(1) 5.8, 5.9
Items 2-17, sections 45B, 45C, and 44ZZRQ, subsections 4(3), 5.10
45(5), 46A(6), 87(3) and 87(5), paragraphs 4F(1)(a), 6(2)(e),
87(3)(a), 87(3)(c) and 87(3)(d), and subparagraphs 4F(1)(a)(i) and
6(2)(b)(i)
Items 18-20, section44ZZRQ, subsection 45(5), section 45B and 5.11
45C of Schedule 1
Schedule 6: Secondary boycotts
Bill reference Paragraph number
Item 1, subsection 76(1A)(a) 6.7
Schedule 7: Third line forcing
Bill reference Paragraph number
Item 1, subsection 47(10) 7.12
Items 2 and 3, paragraphs 47(10(a) and 47(10)(b) 7.15
Item 4, subsection 47(10A) 7.14
Items 5-8, subsections 47(10) and 47(10A) and paragraph s47(10(a) 7.16
and 47(10)(b) of Schedule 1 to the Act
Schedule 8: Resale price maintenance
Bill reference Paragraph number
Items 1 and 2, subsections 48(1) and 48(2) 8.12
Items 2 and 12, subsections 48(2) and 93(7) 8.26
Items 3 to 5, Subdivision A of Division 2 of Part VII, subsection 8.13
93(1)
Items 5, 9, 13, 14 and 16, subsections 93(1), 93(7A), 93(7B), and 8.27
93(7C) and paragraph 93(3A)(a)
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Items 6, 7, 8, 10, 11, 15, 17, 18, 19 and 20, subsections 93(2), 8.18
93(3A), 93(5), 93(6), 93(10) and 93A(2), paragraphs 93(2)(a),
93(3A)(a), 93(7C)(b), 93(8)(a) and 93(8)(b) and subparagraphs
93(7B)(b)(i) and 93(7B)(b)(ii)
Item 9, paragraph 93(3A)(a) 8.14
Items 9, 13, 14 and 16, subsections 93(7A), 93(7B), 93(7C) and 8.28
paragraph 93(3A)(a)
Item 13, subsection 93(7A) 8.15
Items 14 and 16, subsections 93(7B) and 93(7C) 8.17
Item 21, subsection 96(8) 8.24
Items 22 and 23, section 48 of Schedule 1 to the Act 8.29
Schedule 9: Authorisations, notifications and class
exemptions
Bill reference Paragraph number
Item 1, subsection 88(1) 9.23, 9.33
Item 1, subsection 88(5) 9.25
Item 1, subsection 88(6) 9.27
Item 1, subsection 88(3) 9.28
Item 1, subsection 88(2) 9.31
Item 1, subsection 88(7) 9.38
Item 1, subsection 88(4) 9.66
Item 3, subsection 90(8) 9.42
Item 3, subsections 90(8A) to 90(9) 9.45
Item 3, subsection 90(6) 9.47
Item 3, subsection 90(6A) 9.48
Item 3, subsection 90(7) 9.40
170
Index
Items 5, 30-53, 63-68, 70, 71, 73-76, 80, 81, 83, 85-91, 95-97, 101- 9.144
105, 107-117, 119-121, 123-127, 129-145, Part VII (heading),
Division 1 of Part VII (heading), Division 1 of Part IX (heading) and
Division 3 of Part IX, sections 29P, 45EA, 81A, 93AA, 101A, 102A,
150J, 157AA and 174, subsections 8A(6), 90(9A), 25(1),
44ZZRS(1), 45(6A), 45(9), 45D(1), 45DA(1), 45DB(1), 45E(8),
46A(6), 49(1), 50(1), 50(2), 50(5), 80AC(1), 80AC(2), 81A(3),
81A(6), 87B(1A), 87ZP(1), 90(5), 90(10), 90(11), 90(12), 90(13),
90(15), 90A(1), 91(2A), 91C(5), 93(3A), 93(4), 93(5), 93(6),
93(7C), 93(9), 93AB(1), 93A(1), 93A(3), 93A(4), 93A(10A),
101(1A), 101(1C), 102(1), 102(5AC), 109(1A), 163(5), 165(3A),
172(2B), 172(3) and 174(2), paragraphs 44ZZR(1)(b),
44ZZRS(2)(a), 44ZZRT(1)(b), 44ZZRT(2)(b), 45(6)(a), 50(4)(b),
50(4)(c), 50(4)(d), 80AC(1)(b), 80AC(1)(d), 80AC(1)(e), 81A(1)(b),
81A(1)(e), 81A(1)(f), 90B(2)(c), 91C(6)(a), 93(1A)(a), 93(7A)(b),
93(10)(a), 93AB(6)(a), 95(1)(ga), 101(1B)(a), 102(1A)(a),
102(1A)(b), 102(1A)(c), 157(1)(a), 157(1)(ba), 165(1)(a) and
170(3)(a), subparagraphs 44ZZRS(2)(b)(i), 45(6)(b)(i),
93(7B)(b)(ii), 155(2)(b)(iv) and 170(3(b)(ii) and sub-subparagraph
102(4)(a)(ii)(B)
Item 6, subsection 93(3B) 8.20
Item 7, section 93AAA 8.19
Items 8 to 13, subsections 93AB(2) to 93AB(4) and paragraphs 9.116
93AB(4)(a) and 93AB(4)(b)
Items 14 and 17 to 19, subsections 93AD(3)(note) and 93AB(7A), 9.113
and paragraphs 93AD(1)(a) and 93AD(3)(c)
Item 15, subsection 93AC(2A) 9.121
Item 16, subsection 93ACA(1) 9.117, 9.118
Item 16, subsection 93ACA(2) 9.119
Item 17, paragraph 93AD(1)(a) 9.112, 9.123, 9.124
Item 18, paragraph 93AD(3)(c) 9.125
Item 20, subsections 93AD(5) and 93AD(6) 9.126
Item 21, subsection 93AG(1) 9.129
Item 21,subsection 93AG(2) 9.131
Item 21, subsection 93AG(3) 9.132
Item 21, subsection 93AG(4) 9.134
Item 21, subsections 93AG(7) and 93AG(8) 9.135
Item 21, subsection 93AG(5) 9.136
Item 21, section 93AG 9.128
Item 22, subsection 95AA(1) 9.92, 9.94
Item 22, note at subsection 95AA(1) 9.95
Item 22, subsection 95AA(4) 9.97
Item 22, subsection 95AA(3) 9.98
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Item 22, subsection 95AA(2) 9.100
Item 22, subsection 95AB(1) 9.101
Item 22, subsections 95AB(1) and 95AB(2) 9.102
Item 22, paragraph 95AB(4)(a) 9.103
Item 22, subsection 95AC(3) 9.104
Item 22, paragraph 95AB(4)(b) 9.105
Item 22, Division 3 of Part VII 9.18
Item 22, Division 3 of Part VII 9.89
Item 22, section 95AA 9.90
Item 23, subsection 101B 9.107
Item 25, subsection 105(5AAB) 8.21
Item 25, subsection 102(5AB) 9.122
Item 25, subsection 105(5AAA) 8.22
Item 26, paragraph 102(5G)(a) 9.108
Item 26, subsection 102(5D) 9.120
Item 26, paragraph 102(5G)(b) 9.109
Item 26, subsection 102(5F) 9.138
Item 26, subsection 102(5E) 9.127
Item 27, subsection 4(1) 9.61
Item 28, subsection 4(1) 9.60
Item 29, subsection 4(1) 9.62, 9.63, 9.64,
9.111
Items 54-62, 69 and 72, sections 76A and 76B, subsections 75B(1), 9.88
76A(2), 76B(2) to 76B(4), paragraphs 76(1A)(c),
76(1B)(a),76B(5)(a), 81A(1)(d) and 89(1)(a), and subparagraph
76(1)(a)(iii)
Item 77, paragraph 89(1)(a) 9.35
Item 78, subsection 89(1AA) 9.67
Item 82, subsection 90(10B) 9.69, 9.71
Items 82, 92, 93 and 99, subsections 91A(5), 91B(5) and 91C(7A) 9.73
Item 84, subsection 90(12) 9.70
Items 92 to 94, subsections 91A(3), 91B(4) and 91C(4) 9.57
Item 92, paragraph 91A(4)(a) 9.53
Item 92, paragraph 91A(4)(b) 9.54
Item 92, subsection 91A(4A) 9.55
Items 92 to 94, subsections 91A(2A), 91B(3A), 91B(3B), 91C(3A) 9.56
and 91C(3B)
Items 93 and 98, subsections 91B(5) and 91C( 7) 9.58
172
Index
Item 100, subsection 92(1) 9.86
Item 100, subsection 92(2) 9.87
Item 118, subsection 101(2) 9.77
Item 118, subsection 101(2) 9.50
Items 118 and 128, subsections 101(2) and 102(8) 9.76
Item 122, paragraph 102(1AD) 9.83
Item 122, subsection 102(1AB) 9.84
Item 122, paragraph 102(1AA)(1)(a) 9.65
Item 122, subsections 102(1AA), 102(1AC) and 102(1AD) 9.82
Item 128, subsection 102(9) 9.79
Item 128, subsection 102(10) 9.78
Items 146-163, section 45EA, subsections 44ZZRS(1), 45(6A), 9.145
45(9), 45D(1), 45DA(1), 45E(8), 50(1) and 50(5), paragraphs
44ZZRR(1)(b), 44ZZRS(2)(a), 44ZZRT(1)(b), 44ZZRT(2)(b),
45(6)(a), 50(4)(b), 50(4)(c) and 50(4)(d) and subparagraphs
44ZZRS(2)(b)(i) and 45(6)(b)(i) of Schedule 1 to the Act
Items 164-167, sections 68A, 71A, 106A and 114A of the 9.140
Radiocommunications Act 1992
Schedule 10: Admissions of fact
Bill reference Paragraph number
Item 1, subsection 83(1) 10.8, 10.9
Item 1, subsection 83(2) 10.10
Item 1, section 83 10.13
Item 2, application provision 10.15
Schedule 11: Power to obtain information, documents and
evidence
Bill reference Paragraph number
Item 2, subsection 155(2) 11.21
Item 3, subsection 155(5B) 11.25
Item 3, subsection 155(6) 11.26
Item 3, paragraph 155(5B)(c) 11.31
Item 3, note at subsection 155(5B) 11.33
Item 4, subsection 155(6A) 11.39
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Item 5, application provision 11.42, 11.43
Schedule 12: Access to services
Bill reference Paragraph number
Items 1 to 2, sections 44B and 44CA 12.15
Item 2, paragraph 44CA(1)(a) 12.18
Item 2, paragraph 44CA(1)(b) 12.22
Item 2, paragraph 44CA(2)(a) 12.30
Item 2, paragraph 44CA(2)(b) 12.31
Item 2, subsection 44CA(2) 12.32
Item 2, subsection 44CA(3) 12.33
Item 2, paragraph 44CA(1)(c) 12.35
Item 2, paragraph 44CA(1)(d) 12.37, 12.39, 12.40
Item 2, paragraph 44CA(3) 12.38
Items 3 and 4, paragraphs 44D(2)(a) and 44D(4)(a) 12.48
Item 5, subsection 44F(1A) 12.46
Items 5 and 6, subsections 44F(1) and 44F(2) 12.45
Items 6, 10 and 11, subsections 44F(2), 44G(1)-(1A), (6)-(7), 12.69
44H(3)-(3A), (6B)-(6C)
Items 7 and 11, subsections 44F(4) and 44H(2) 12.34
Items 8, 16 and 18, subsections 44F(8), 44LG(7) and 44LI(10) 12.67
Item 9, subsection 44FA(4) 12.42
Items 10and 11, sections 44G and 44H(4) 12.16
Item 12, subsection 44H(9) 12.44
Item 13, subsection 44J(2) 12.49
Items 14, 15 and 17, paragraphs 44LB(3)(b), 44LG(5)(b), 12.68
44LI(2)(a)
Item 19, sub item 19(1) 12.73
Item 19, sub item 19(2) 12.74
Item 19, sub item 19(3) 12.75
Item 20, subsections 44NBA(6) and 44NBA(7) 12.56
Item 20, subsection 44NBC(1) 12.57
Item 20, subsection 44NBC(2) 12.58
Item 20, subsections 44NBC(3) and 44NBC(4) 12.59
Item 20, subsection 44NBC(5) 12.60
Item 20, subsections 44NBB(1) 12.62
174
Index
Item 20, subsection 44NBB(2) 12.63
Item 20, subsection 44NBB(3) 12.64
Item 20, Subdivision CA 12.50
Item 20, subsections 44NBA(1), 44NBA(5), 44NBA(6) 12.51
Item 20, subsections 44NBA(2) and 44NBA(3) 12.52
Item 20, subsection 44NBA(3) 12.53
Item 20, subsection 44NBA(5) 12.54
Item 20, subsections 44NBA(4) and 44NBA(5) 12.55
Items 21 to 36, 42 and 44, subsections, 44NC(1), 44NC(2), 44NC(3), 12.70
44NC(5), 44NE(1), 44NE(3), 44NF(1), 44NG(1), 44O(1),
paragraphs 29O(a) and 29O(2)(a), 44NC(8)(a), 44NC(9)(a),
44NF(2)(a), 44NF(4)(a), 44NG (2)(a), 44NG(3)(a),
44ZZOAAA(3)(a), subparagraph, 44NE(6)(c)(iii)
Item 35, subsection 44O(1A) 12.61
Item 37 12.76
Items 38 to 41, subsection 44V(2), paragraphs 44W(1)(d), 12.66
44W(1)(e) and 44X(1)(e)
Items 42-45, paragraphs 29O(a) and 29O(2)(a), subparagraphs 12.77
29O(b)(ii) and 29O(2)(b)(ii)
Items 43 and 45, subparagraphs 29O(b)(ii) and 29O(2)(b)(ii) 12.17
Schedule 13: Application and transitional provisions
Bill reference Paragraph number
Item 1, Division 3 of Part XIII 13.4
Item 1, section 180 13.5
Item 1, section 182 13.10
Item 1, subsection 183(1) 13.12
Item 1, subsection 183(2) 13.14
Item 1, subsection 183(3) 13.16
Item 1, section 184 13.17
Item 1, subsection 185(1) 13.20
Item 1, subsection 185(2) 13.21
Item 1, note at subsection 185(2) 13.22
Item 1, subsection 185(3) 13.23
Item 1, note at subsection 185(3) 13.24
Item 1, subsection 185(4) 13.25, 13.26
Item 1, subsection 185(5) 13.27
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Competition and Consumer Amendment (Competition Policy Review) Bill 2017
Item 1, subsection 185(6) 13.28
Item 1, subsection 185(7) 13.29
Item 1, subsection 185(8) 13.30
Item 1, subsection 185(9) 13.32
Schedule 14: Other amendments
Bill reference Paragraph number
Item 1, subsections 5(3) and (4) 14.7
Item 1, subsection 5(5) 14.8
Item 2 14.11, 14.12
Items 3 to 7, subsections 138B(2), 138C(1), 138C(3) and paragraphs 14.17
138D(1)(b) and 138E(1)(b)
Item 8 14.18
Items 9 to 10, paragraphs 95(1)(gb), 95(1)(h) and (j) 14.22
Item 11, section 132A of Schedule 2 14.27
Item 12, subsection 79(5) 14.30
Item 13 14.31
Items 14 to 17 and 20 to 22, subsections 82(3)(a) to (d), 85(3)(a) and 14.36
85(6)(a) and section 179 of Schedule 2
Items 18 and 19, subsection 86(1) of Schedule 2 14.35
Item 23, subsection 131(2) 14.40
Item 24 14.41
Item 25, subsection 155(8) 14.43
Item 26 14.44
Item 27, section 291 of Schedule 2 14.28
Item 27, section 292 of Schedule 2 14.37
176