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2004-2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TRADE PRACTICES LEGISLATION AMENDMENT BILL (NO. 1) 2005
EXPLANATORY MEMORANDUM
(Circulated by authority of the Treasurer,
the Hon Peter Costello, MP)
Table of contents
Outline..................................................................................................................1
Financial Impact Statement..................................................................................7
Regulation Impact Statement ...............................................................................9
Notes on Individual Clauses ..............................................................................11
Schedule 1 -- Merger clearances and authorisations ........................................13
Schedule 2 -- Non-merger authorisations .........................................................51
Schedule 3 -- Collective bargaining .................................................................55
Schedule 4 -- Exclusionary provisions .............................................................72
Schedule 5 -- Price fixing provisions................................................................75
Schedule 6 -- Dual listed companies ................................................................78
Schedule 7 -- Third line forcing and exclusive dealing....................................85
Schedule 8 -- Enforcement ...............................................................................97
Schedule 9 -- Penalties....................................................................................118
Schedule 10 -- Local government bodies .......................................................127
Schedule 11 -- Functions and powers etc. under Competition Code..............129
Schedule 12 -- Technical amendment.............................................................132
Trade Practices Legislation Amendment Bill (No. 1) 2005 iii
1
1 Outline
Trade Practices Legislation Amendment Bill (No. 1) 2005
.1 This Bill makes amendments to the Trade Practices Act 1974 (the TP Act)
that will implement the Government's response to the Review of the
Competition Provisions of the Trade Practices Act (the Dawson Review). The
amendments incorporate the Government's response to recommendations
arising from the independent committee of inquiry which comprised of
Sir Daryl Dawson, AC KBE CB, Ms Jillian Segal and Mr Curt Rendall.
.2 The Dawson Review concluded that the competition provisions of the TP
Act have served Australia well, but made recommendations seeking to improve
the operation of the TP Act, specifically in relation to the competition and
authorisation provisions, and the administration of the TP Act.
Major Elements of the Legislation
Merger clearances
.3 A voluntary formal merger clearance system will be created that will
operate in parallel with the informal clearance system, retaining the advantages
of the latter while overcoming some of its disadvantages. The test for
considering mergers will remain unchanged -- section 50 of the TP Act will
continue to prohibit mergers that would have the effect, or be likely to have the
effect of substantially lessening competition in a market.
.4 While the informal system is inexpensive, and can be relatively speedy, the
Dawson Review found that the absence of reasons provided by the Australian
Competition and Consumer Commission (the Commission) for its informal
merger clearance decisions has hindered the development of a body of
precedent to assist in the making of consistent and predictable determinations.
Trade Practices Legislation Amendment Bill (No. 1) 2005 1
Outline
Moreover, the Dawson Review found that the absence of a meaningful appeals
mechanism within the informal clearance system may put the Commission in a
position to extract undertakings which go beyond competition concerns arising
from a merger. Consequently, the Dawson Review recommended the creation
of a formal, but not compulsory, clearance process, operating in parallel with
the existing informal system. This should retain the advantages of the current
system whilst overcoming some of its disadvantages.
.5 The optional formal system will provide parties with an alternative process
for progressing their merger. Parties will be able to use the informal system
and/or use the optional formal system. Under the new formal clearance
procedure, the Commission will have 40 days to make a decision on the
proposed merger. This 40 day limit would be capable of extension only at the
request of the applicant. This will increase the level of certainty for business.
Moreover, parties would be presented with reasons for the Commission's
decision and be given the opportunity to have the Australian Competition
Tribunal (the Tribunal) review an unfavourable decision.
Merger authorisations
.6 The Dawson Review considered that the merger authorisation process is
commercially unrealistic for many merger proposals, with concern arising from
the time taken to make a merger decision and the risk of third party intervention
by way of review by the Tribunal.
.7 The amendments make the authorisation process more timely and reduce
uncertainty. The Tribunal will be responsible for directly assessing merger
authorisations on public benefit grounds, it will have to consider an application
within a statutory time limit and will consider third party interests as part of the
assessment rather than through an appeal process.
Non-merger authorisations
.8 The amendments to the merger authorisation process improve timeliness by
placing time limits on the Commission for considering applications. The
Commission will have the discretion to waive the filing fee, either in whole or
in part.
Collective bargaining
.9 The amendments will reduce the regulatory burden on small business by
introducing a notification process for collective bargaining by small business
dealing with large business. The notification process will provide an alternative
to the authorisation process (which will still be the appropriate avenue where
2 Trade Practices Legislation Amendment Bill (No. 1) 2005
Outline
arrangements involving more than one target are to be considered). Under the
new notification process collective bargaining arrangements will (in the
absence of objection by the Commission) receive immunity at the end of 14
days (or such longer period as prescribed by regulation) for a period of three
years.
.10 The onus will be on the Commission to provide notice that the contract or
proposed contract does not, or is unlikely to benefit the public, or that any
benefit will not outweigh the detriment resulting from the contract or proposed
contract. However, the Commission will be able to issue an objection notice at
any time if it considers that the requisite tests have been met.
Exclusionary provisions
.11 Exclusionary provisions having the purpose of preventing, restricting or
limiting the supply or acquisition of goods or services to or from particular
persons or classes of persons will remain illegal per se (there is no requirement
to prove, in addition to the conduct itself, that it substantially lessens
competition), consistent with the treatment of price fixing conduct. Genuine
joint venture activity which does not substantially lessen competition will have
a defence under these provisions. The authorisation process will still be
available for other joint ventures in appropriate circumstances.
Price fixing provisions
.12 Price fixing provisions will remain illegal per se (there is no requirement to
prove, in addition to the conduct itself, that it substantially lessens competition).
Genuine joint venture activity which does not substantially lessen competition
will have a defence under those provisions. The authorisation process will still
be available for other joint ventures in appropriate cases.
Dual listed companies
.13 Intra party transactions in a dual listed company are to be treated on the
same basis as related party transactions within a group of companies, the
aggregate size of a dual listed company will be assessable for the purpose of
considering market power, and the forming of dual listed companies will be
prohibited where it would substantially lessen competition in a market, with
authorisation available in appropriate cases.
Third line forcing and exclusive dealing
.14 The Dawson Review found third line forcing is often beneficial and
pro-competitive. The amendments to the third line forcing provisions subject
Trade Practices Legislation Amendment Bill (No. 1) 2005 3
Outline
third line forcing to a substantial lessening of competition test, instead of being
per se illegal (that is, it is prohibited outright), to bring its treatment into line
with other forms of exclusive dealing. Third line forcing that involves related
parties within a group of companies will no longer be subject to regulation.
Enforcement
.15 The Commission's extensive enforcement powers will be enhanced but
subjected to appropriate accountability requirements, by enabling the
Commission to enter premises and search for and seize material after obtaining
a warrant from a Magistrate for the exercise of those powers.
Penalties
.16 The maximum pecuniary penalty for corporations will be the greater of $10
million, or three times the gain from the contravention, or where gain cannot be
readily ascertained, 10 percent of the turnover of the body corporate and all its
interconnected bodies corporate (if any). The Court will have the option to
exclude an individual implicated in a contravention of the TP Act from being a
director of a corporation or being involved in its management and corporations
will be prohibited from indemnifying officers, against the imposition of a
pecuniary penalty.
Local government bodies
.17 The amendments implement the Government's response to the Productivity
Commission Report No. 23, 14 August 2002, that the current section 2D of the
TP Act (exempts the licensing decisions and internal transactions of local
government from Part IV of the TP Act) be repealed and replaced with a new
section 2D providing explicitly that Part IV of the TP Act only applies to local
government in so far is it carries on a business. This is consistent with the
exemption currently provided to Commonwealth, state and territory
governments.
Constitutional validity
.18 These amendments are the second tranche of the amendments resulting
from the constitutional questions raised by the High Court in R v Hughes (2000)
171 ALR 155. Amendments to section 44ZZM and section 44ZZOA of the
TP Act formed part of the Trade Practices Legislation Amendment Act 2003.
The amendments to section 150F will ensure the states and territories can
confer duties on the Commission and the Tribunal pursuant to the Competition
Code, in a way that is constitutionally valid (that is, the Commonwealth law
4 Trade Practices Legislation Amendment Bill (No. 1) 2005
Outline
will impose the duty on Commonwealth bodies and officers, as opposed to the
Commonwealth law merely consenting to a state or territory law).
Trade Practices Legislation Amendment Bill (No. 1) 2005 5
2
2 Financial Impact Statement
.1 The financial implications arising from the passage of this Bill will be
considered in a budget context. These implications relate to the functions of the
Commission and the Tribunal. As a result of this Bill, new functions will be
provided to the Commission, notably consideration of merger clearance
applications and small business collective bargaining notifications. New
functions will also be provided to the Tribunal, including the consideration of
merger authorisation applications and the review of merger clearance and small
business collective bargaining notification decisions of the Commission.
Trade Practices Legislation Amendment Bill (No. 1) 2005 7
3
3 Regulation Impact Statement
Trade Practices Legislation Amendment Bill (No. 1) 2005
.1 A regulation impact statement was not prepared as the report prepared by
the Dawson Committee was consultative and contained adequate analysis of the
impacts of the proposed changes to the Trade Practices Act 1974 (the TP Act).
Copies of the report of the Dawson Committee can be found at
http://tpareview.treasury.gov.au/content/report.asp.
.2 Amendments to the TP Act that are not reflected in the Dawson Review did
not require a regulation impact statement as they were minor or machinery in
nature.
Trade Practices Legislation Amendment Bill (No. 1) 2005 9
4
4 Notes on Individual Clauses
Clause 1 -- Short title
.1 This clause provides for this Act to be cited as the Trade Practices
Legislation Amendment Act (No. 1) 2005.
Clause 2 -- Commencement
.2 The Bill provides for the following commencement times.
Table item #1 Sections 1 to 3 and anything in the Act not covered by the
commencement information in this table will commence on
the day on which this Act receives Royal Assent.
Table item #2 Schedule 1 inserts provisions relating to merger clearances
and authorisations, and injunctions and divestiture where an
authorisation or clearance is granted on false information.
This schedule will commence on a single day to be fixed by
Proclamation, or six months after this Act receives the Royal
Assent, whichever is earlier.
Table item #3 Schedules 2 to 9 insert the new provisions for non-merger
authorisations, collective bargaining, exclusionary provisions,
price fixing provisions, dual listed companies, third line
forcing and exclusive dealing, enforcement, and penalties.
These schedules will commence at the same time as
Schedule 1.
Table item #4 Schedule 10 inserts the new provisions concerning the
application of Part IV of the Trade Practices Act 1974 to local
Trade Practices Legislation Amendment Bill (No. 1) 2005 11
Notes on Individual Clauses
government bodies. This schedule will commence on the day
after this Act receives the Royal Assent.
Table item #5 Schedule 11 inserts the new provisions regarding functions
and powers under the Competition Code. This provision will
commence the day this Act receives the Royal Assent.
Table item #6 Schedule 12 is a technical amendment rectifying an incorrect
cross reference concerning the Gas Pipelines Access
(Commonwealth) Act 1998 and will commence immediately
after the commencement of Schedule 1 to the Trade Practices
Legislation Amendment Act 2003.
Clause 3 -- Schedule(s)
.3 Where an Act is specified in a schedule in this Act, the specified Act is
amended or repealed as required by the particular schedule, and any other item
in a schedule of this Act has effect according to its terms.
12 Trade Practices Legislation Amendment Bill (No. 1) 2005
5
5 Schedule 1 -- Merger clearances and
authorisations
Trade Practices Act 1974
.1 The Schedule amends the Trade Practices Act 1974 (referred to in this
Explanatory Memorandum as the `TP Act') to provide the new merger
clearance and merger authorisations processes recommended by the Review of
the Competition Provisions of the Trade Practices Act (the Dawson Review).
.2 Section 50 of the TP Act prohibits mergers that would have the effect, or be
likely to have the effect, of substantially lessening competition in a market.
.3 Part VII of the TP Act provides that the Australian Competition and
Consumer Commission (the Commission) may, in the public interest, authorise
certain anti-competitive conduct (including mergers) that would otherwise be in
breach of Part IV of the TP Act. The Dawson Review found that the merger
test should remain unchanged but changes to merger processes are necessary,
requiring new definitions and some new machinery for aspects of those
processes.
Item 1 -- Subsection 4(1)
.4 Item 1 inserts a new definition of authorisation for merger authorisation
applications under Division 1 of Part VII granted by the Commission or the
Australian Competition Tribunal (the Tribunal) on a review of a determination
by the Commission (in regard to authorisation decisions made before the
commencement of this Act); or under Division 3 of Part VII granted by the
Tribunal.
Trade Practices Legislation Amendment Bill (No. 1) 2005 13
Schedule 1 -- Merger clearances and authorisations
Item 2 -- Subsection 4(1) (definition of authorization)
.5 Item 2 repeals the definition of authorization found in subsection 4(1) of
the TP Act.
Item 3 -- Subsection 4(1)
.6 Item 3 inserts a definition of clearance in subsection 4(1) under Division 3
of Part VII of the TP Act to mean a clearance that is granted by the Commission
or by the Tribunal on a review of a determination by the Commission.
Item 4 -- Subsection 8A(6)
.7 Item 4 inserts the words `or a clearance' to follow `authorization' in
subsection 8A(6), thereby ensuring the Chairperson considers whether an
associate member should form part of the Commission for the purpose of a
clearance decision.
Item 5 -- Subsection 25(1)
.8 Item 5 inserts the words `or a clearance' to follow `authorization' in
subsection 25(1), thereby ensuring the Commission cannot delegate its powers
to grant, revoke or vary a clearance to a member of the Commission.
Item 6 -- Before section 30
New section 29P Definition
.9 Item 6 inserts before section 30 a definition of proceedings under section
29P to include applications for authorisations made to the Tribunal under
Division 3 of Part VII.
Item 7 -- Section 37
.10 Item 7 inserts (1) prior to the words `The Tribunal shall'.
Item 8 -- At the end of section 37
.11 Item 8 is a consequential amendment inserting criteria for membership of
the Tribunal so as to ensure that the Tribunal is constituted by different
members when considering: (a) an application to the Tribunal for authorisation
under Division 3 of Part VII; and (b) the review of a merger clearance decision
14 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
in relation to an acquisition it has considered as a merger authorisation
previously (and vice versa).
.12 Different Tribunal members will be required to assess authorisation
applications to those that review Commission clearance decisions. The new
clearance and authorisation processes involve different tests (authorisation
involves a consideration of public benefit, and clearance involves a
consideration of substantial lessening of competition) and different Tribunal
members are required to ensure that each process is undertaken with a fresh
consideration of the relevant matter.
Item 9 -- Subsections 46(6) and 46A(6)
.13 This item inserts `or clearance' into subsections 46(6) and 46A(6) to follow
`authorization' ensuring that section 46 (Misuse of market power) does not
prohibit a corporation from engaging in conduct that has been formally cleared
(and is therefore immune from legal action).
Item 10 -- At the end of subsection 50(1)
.14 This item adds a note to the end of subsection 50(1) (which prohibits
acquisitions by corporations having the effect or likely effect of substantially
lessening competition) that a corporation will not be prevented from making an
acquisition pursuant to section 50 if it has been granted a clearance by the
Commission or Tribunal or a merger authorisation by the Tribunal (clearance
provides immunity from legal action).
Item 11 -- At the end of subsection 50(2)
.15 This item adds a note to the end of subsection 50(2) (which prohibits
acquisitions by persons having the effect or likely effect of substantially
lessening competition) that a person will not be prevented from making the
acquisition of shares and assets if it has been granted a clearance by the
Commission or Tribunal, or a merger authorisation by the Tribunal (clearance
provides immunity from legal action).
Item 12 -- Paragraph 50(4)(b)
.16 Subsection 50(4) of the TP Act ensures that no breach of section 50 occurs
where a contract for an acquisition is subject to a condition that provisions of
the contract relating to the acquisition will not come into force until the person
has been granted an authorisation. Item 12 extends the protection currently
Trade Practices Legislation Amendment Bill (No. 1) 2005 15
Schedule 1 -- Merger clearances and authorisations
granted to authorisations under paragraph 50(4)(b), to the granting of a
clearance.
Item 13 -- Paragraph 50(4)(c)
.17 Item 13 amends paragraph 50(4)(c) to require that the person must have
applied for the clearance (as with authorisation) before the expiration of 14
days after entering into the contract.
Item 14 -- Paragraph 50(4)(d)
.18 Item 14 amends paragraph 50(4)(d) so that acquisitions will not be
regarded as having occurred before the application for the clearance (as with an
application for authorisation) is disposed of, or the contract ceases to be subject
to the condition (whichever happens first). This ensures the immunity of
subsection 50(4) extends to applications for clearances as for authorisations.
Item 15 -- Subsection 50(5)
.19 Subsection 50(5) provides that authorisations are taken to be disposed of
either 14 days after the Tribunal has made an authorisation decision on review
from the Commission, or 14 days after an application for review could have
been made to the Tribunal. This item omits `an authorization' and substitutes it
with `a clearance' as the Commission is no longer the responsible body for
authorisation applications. The Tribunal is the only body able to assess
authorisation applications.
Item 16 -- Paragraphs 50(5)(a) and (b)
.20 This item omits `the authorization' and substitutes it with `the clearance'.
Item 17 -- After subsection 50(5)
.21 This item inserts subsection 50(5A) which provides that the applicant has
14 days following the Tribunal's determination on an authorisation application
to consider administrative review processes.
16 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
Item 18 -- After section 80AB
New section 80AC Injunctions to prevent mergers if clearance or
authorisation granted on the basis of false or misleading information
.22 Item 18 inserts a new section 80AC outlining the conditions under which
injunctions may be granted by the Court so as to prevent mergers where
clearance or authorisation has been given on the basis of false or misleading
information provided by the applicant or body corporate related to the
applicant.
.23 Subsection 80AC(2) provides that the Court must not grant an injunction if:
(a) the person was granted a merger authorisation or clearance under Division 3
of Part VII in relation to the acquisition; and (b) the Court could not grant an
injunction under this section.
.24 This item provides the example whereby if the Commission granted a
clearance on the basis of false or misleading information but the Tribunal
granted an authorisation on the basis of true information, the Court would be
unable to grant an injunction under this section.
Item 19 -- After subsection 81
New section 81A Divestiture where merger done under clearance or
authorisation granted on false etc. information
.25 Item 19 inserts new section 81A. This section enables the Court, on
application of the Commission, to order divestiture where an authorisation or
clearance has been granted on the basis of false or misleading material
information that was provided by the applicant.
Circumstances when this section applies
.26 Subsection 81A(1) outlines the circumstances where divestiture is
applicable should the Court be satisfied that the requisite circumstances have
been met.
Divestiture by the acquirer and related bodies corporate
.27 Subsection 81A(2) provides that the Court, on the application of the
Commission, may direct the disposal of shares or assets where a formal
clearance or authorisation has been granted on the basis of false or misleading
material information that was provided by the applicant.
Trade Practices Legislation Amendment Bill (No. 1) 2005 17
Schedule 1 -- Merger clearances and authorisations
.28 Subsection 81A(3) prevents the Court from ordering divestiture should the
applicant be granted both a clearance and an authorisation under Division 3 of
Part VII and the conditions required in subsection 81A(1) are not met in
relation to both the clearance and the authorisation. This item provides the
example whereby if the Commission granted a clearance on the basis of false or
misleading information but the Tribunal granted an authorisation on the basis of
true information, the Court would be unable to order divestiture under this
section.
Declaration that acquisition void -- when vendor involved
.29 Subsection 81A(4) provides that the Court may, on the application of the
Commission, declare the acquisition of shares or assets void as from the day
they were acquired, if in addition to the requirements of subsection 81A(1), the
person from whom the assets were acquired (that is, the vendor) was involved
in the contravention by the acquirer referred to in subsection 81A(1).
.30 Subsection 81A(5) provides that should the Court make an order under
subsection 81A(4) then the assets affected by the declaration are deemed to not
be disposed of by the vendor, and the vendor must refund any amount paid for
acquiring assets to the acquirer.
.31 Subsection 81A(6) provides that the Court cannot make an order under
subsection 81A(4) if the acquirer was granted a clearance and an authorisation
for the acquisition and the matters in subsection 81A(1) to (4) are not satisfied
in relation to both the clearance and the authorisation.
Alternative to orders under subsections (2) and (4)
.32 Subsection 81A(7) provides that the Court may accept an undertaking by
the person to dispose of other shares or assets as an alternative to making an
order under subsection 81A(2) or (4) of this section.
When application for orders under this section must be made
.33 Subsection 81A(8) provides that an application for divestiture may be made
at any time within 3 years after the day on which the acquisition occurred.
Court may make orders even if not satisfied of all matters
.34 Subsection 81A(9) provides that, whether or not the Court is satisfied that
the requirements of subsections 81A(2) or (4) have been met, and all the parties
to the proceedings agree, the Court may make an order for divestiture if the
Court determines that to be appropriate.
18 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
.35 Item 19 also amends the heading of section 81.
Item 20 -- Subsection 86C(4) (paragraph (a) of the definition of
contravening conduct)
.36 This amends subsection 86C(4) paragraph (a) of the definition of
contravening conduct by omitting `or 75AYA' and substituting it with `,
75AYA or 95AZN'. This enables the Court to make non-punitive orders where
a person has been negligent as to whether information is false or misleading.
Item 21 -- After subsection 87B(1)
.37 Item 21 inserts new subsection (1A) to make it clear that the Commission
may accept a written undertaking given by a person, for the purposes of section
87B, in connection with a clearance granted by the Commission or an
Authorisation granted by the Tribunal.
Item 22 -- Part VII (heading)
.38 Item 22 repeals the heading of Part VII to be replaced with:
Part VII -- Authorisations, notifications and clearances in respect of
restrictive trade practices
.39 Part VII will be amended to provide that Division 1 relates to
authorisations other than mergers, and will insert Division 3 which outlines the
processes for merger clearances and authorisations.
Item 23 -- Division 1 of Part VII (heading)
.40 Item 23 repeals the heading of Division 1 of Part VII to be replaced with:
Division 1 -- Authorisations (other than section 50 merger authorisations)
Item 24 -- Subsection 87ZD(1)
.41 This inserts a definition of authorisation to mean an authorisation other
than section 50 merger authorisations. (Technical amendment relating to
renumbering of the TP Act dependent on commencement of item 10 of
Schedule 1 to the Trade Practices Amendment (Personal Injuries and Death)
Act (No. 2) 2004.)
Trade Practices Legislation Amendment Bill (No. 1) 2005 19
Schedule 1 -- Merger clearances and authorisations
Item 25 -- Subsection 88(9)
.42 This item repeals the ability of the Commission to grant an authorisation
for mergers. The Commission retains the ability to grant an authorisation for
acquisitions outside Australia pursuant to section 50A.
Item 26 -- Subsection 90(9)
.43 Item 26 amends subsection 90(9) removing the ability of the Commission
to grant an authorisation for a merger. The Commission retains the ability to
make a determination and apply the public benefit test with regard to
acquisitions outside Australia (section 50A).
Item 27 -- At the end of Part VII
.44 Item 27 inserts a new Division 3 to the end of Part VII which includes four
subdivisions:
2 Subdivision A -- Preliminary
3 Subdivision B -- Merger clearances
4 Subdivision C -- Merger authorisations
5 Subdivision D -- Miscellaneous
Division 3 -- Merger clearances and authorisations
Subdivision A -- Preliminary
New section 95AA Simplified outline of this Division
.1 Section 95AA inserts a box that contains a simplified outline summarising
Division 3 regarding the differences between merger clearances and
authorisations, the process for merger clearances (reference to Subdivision B)
and the process for merger authorisations (reference to Subdivision C).
.2 The main differences between merger clearances and merger authorisations
are:
6 different bodies decide whether they should be granted;
7 different timeframes apply for when the body must make its decision;
20 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
8 they have different tests that need to be satisfied for them to be granted;
9 merits review is not available for decisions by the Tribunal on
authorisations.
Merger clearances (Subdivision B)
10 The Commission grants them.
11 The Commission must make its decision whether to grant within 40
business days (which can be extended with the applicant's agreement). If
the Commission does not make a decision within 40 business days, the
application is taken to be refused.
12 The Commission cannot grant a clearance unless it is satisfied that the
acquisition would not have the effect, or be likely to have the effect, of
substantially lessening competition in a market.
13 If the Commission refuses to grant a clearance, or grants a clearance
subject to conditions, then the person who applied for the clearance may
apply to the Tribunal for review of the Commission's decision.
Merger authorisations (Subdivision C)
14 The Tribunal grants them.
15 The Tribunal must make its decision whether to grant within 3 months
(which can be extended to 6 months in special circumstances). If the
Tribunal does not grant the merger authorisation, the application is taken
to be refused.
16 The Tribunal cannot grant the authorisation unless it is satisfied that the
acquisition would result, or be likely to result, in such a benefit to the
public that the acquisition should be allowed to take place.
False or misleading information (Subdivision D)
17 This contains a prohibition on providing false or misleading information
to the Commission or Tribunal under this Division or Division 3 of Part
IX.
New section 95AB Definitions
.1 Section 95AB defines a number of terms used in the Division. These
include:
Trade Practices Legislation Amendment Bill (No. 1) 2005 21
Schedule 1 -- Merger clearances and authorisations
18 authorisation being an authorisation for a merger by the Tribunal;
19 business day means a day that is not a Saturday, a Sunday, or a public
holiday in the Australian Capital Territory;
20 clearance means a clearance granted by the Commission, or on review by
the Tribunal, under this Division;
21 merger authorisation register refers to the register of applications for
merger authorisations maintained by the Tribunal under new section
95AZ;
22 merger clearance register refers to the register of merger clearance
applications maintained by the Commission under new section 95AH;
and
23 minor variation in relation to a clearance or authorisation is a single
variation that does not involve a material change in the effect of the
clearance or authorisation.
Subdivision B -- Merger clearances
.1 The Dawson Review found that the Commission's current informal system
is relatively speedy and inexpensive -- the voluntary nature of the process
minimises the possibility of unduly delaying mergers that are unlikely to be in
breach of section 50. The Dawson Review considered that the weaknesses of
the system are evident in the absence of an effective mechanism for review and
the absence of reasons for the Commission's decisions.
.2 This Subdivision creates a voluntary formal mergers process that will
operate in parallel with the existing informal system, retaining the advantages
of the informal system, and overcoming some of its disadvantages.
.3 These proposed amendments require the Commission to provide detailed
reasons for its decisions so as to achieve greater accountability and
transparency for merger clearance decisions. The formal clearance procedure
will provide an effective appeals mechanism and timeliness in determinations
and the granting of a formal clearance will provide immunity from legal action
under section 50 (whether by third parties or by the Commission).
.4 The informal and formal systems are seen as working not only in parallel
but in a complementary fashion. Difficulties may be raised and addressed
informally without setting the clock running under the legislated formal
process. However, once a decision is sought, the legislated time frame,
22 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
immunity from legal action where a clearance is granted, and an effective
appeals mechanism will provide a level of certainty for business unavailable
under any non-legislated informal system.
New section 95AC Commission may grant clearance for a merger
.5 Subsection 95AC(1) provides that the Commission may grant a clearance to
a person: (a) to acquire shares in the capital of a body corporate; and (b) to
acquire assets of another person. It is noted that the Commission may not grant
a clearance unless it is satisfied that the acquisition would not have the effect,
or be likely to have the effect, of substantially lessening competition.
.6 Subsection 95AC(2) provides that the prohibition on anti-competitive
mergers in section 50 will not prevent an acquisition of shares or assets made in
accordance with the clearance. It is noted that the acquisition will only be
protected if it takes place entirely in accordance with the clearance. Should the
acquisition not be in accordance with the clearance, immunity from section 50
will not apply and will be considered to have never applied. A failure to
comply with a clearance may, therefore, have serious consequences for the
person granted the clearance because the clearance may be revoked or remedies
such as penalties and divestiture may be sought.
.7 Subsection 95AC(3) provides that (without limiting the operation of
subsection 95AC(2)) an acquisition will not be in accordance with the clearance
if the person granted the clearance fails to meet any condition imposed on the
clearance. This applies to all conditions imposed on the clearance, regardless
of whether they are required to be complied with before, during or after the
acquisition.
New section 95AD Application for clearance
.8 Section 95AD states that a person who wants a clearance for the purpose of
acquiring shares or assets must apply to the Commission. (A third party may
make an application on the person's behalf in accordance with normal agency
principles.)
New section 95AE Requirements for valid clearance application
.9 Section 95AE establishes the requirements for a valid formal clearance
application. The application must be: (a) in a form prescribed by the
regulations and contain the information required by the form; (b) accompanied
by such other information or documents as are prescribed by regulations; and
(c) accompanied by the fee (if any) prescribed by the regulations.
Trade Practices Legislation Amendment Bill (No. 1) 2005 23
Schedule 1 -- Merger clearances and authorisations
.10 The regulations may prescribe that the application form contain a
requirement that the applicant make an undertaking under section 87B that it
will not make the acquisition while the application is being considered by the
Commission.
New section 95AF Commission to notify if clearance application is invalid
.11 Section 95AF obligates the Commission to notify an applicant if their
application for clearance is invalid within 5 business days: (a) stating that the
application is invalid; and (b) giving reasons as to why the application does not
comply with the requirements for a valid application in this Division.
New section 95AG Application to be published on the Internet
.12 Section 95AG requires the Commission to: (a) publish applications for a
clearance as well as accompanying information on its website subject to
confidentiality; and (b) invite submissions in respect of the application within a
period specified by the Commission.
New section 95AH Merger clearance register
.13 Under this section, the Commission will be required to maintain a merger
clearance register of all applications including minor variations, revocation of
clearances and withdrawn or abandoned proposals. The Commission will be
required to include documents given to the Commission, particulars of oral
submissions, and the Commission's determination and reasons in relation to a
clearance application or proposal (subject to confidentiality requirements in
new section 95AI).
New section 95AI Confidentiality claims etc.
Requests for confidential treatment
.14 Subsection 95AI(1) allows a person who gave information in regard to any
of the applications outlined in section 95AH(1) to request that information be
excluded from the Commission's website and the merger clearance register on
grounds of confidentiality.
Confidentiality claims to be determined first
.15 The Commission must not include information in the merger clearance
register, or its website, until it has determined any request to address claims of
confidentiality.
24 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
When Commission must exclude information -- request made
.16 Upon such a request the Commission must exclude:
24 particulars of a secret formula or process;
25 the cash consideration offered for the acquisition of shares or assets;
26 the current costs of manufacturing, producing or marketing goods or
services.
When Commission may exclude information -- request made
.1 The Commission may exclude information from its register and website
upon request if it is satisfied that it is desirable to do so because of the
confidential nature of the information.
If request refused, document may be withdrawn
.2 If the Commission is not satisfied by the request, it must return the
documents (or part thereof) to the applicant upon the applicant's request, and
must not include them in the register or its website.
If request refused, oral submission may be withdrawn
.3 An applicant can withdraw all or part of their oral submission should their
request for confidentiality be refused by the Commission.
When Commission may exclude information -- no request made
.4 The section also provides that the Commission may exclude information
from the register and its website for reasons other than confidentiality.
New section 95AJ Commission may seek additional information from
applicant
.5 The Commission will be able to seek additional information from an
applicant in determining a clearance application.
New section 95AK Commission may consult others
.6 The Commission will be able to undertake consultation with persons it
deems appropriate for the purposes of making its determination for an
application.
Trade Practices Legislation Amendment Bill (No. 1) 2005 25
Schedule 1 -- Merger clearances and authorisations
New section 95AL Applicant may withdraw application
.7 The applicant will be able to withdraw their application at any time by
notice in writing.
New section 95AM Commission to make determination on application
.8 The Commission must make a determination (a) granting or (b) refusing the
clearance of the application in writing, taking into account submissions
received from states, territories, the Commonwealth, the applicant and any
other person when making its determination. (It is noted that if the
Commission does not make a determination within the requisite time period, it
is deemed to have refused to grant the clearance.) The Commission will be
required to notify the applicant in writing of the outcome of the determination
on a merger clearance and give written reasons supporting its decision.
New section 95AN When clearance must not be granted
.9 This proposed provision states the test for granting a clearance -- the
Commission must not approve a clearance unless it is satisfied that the
acquisition would not have the effect, or be likely to have the effect, of
substantially lessening competition (as consistent with the definition and
interpretation under section 50 of the TP Act).
.10 If an acquisition has already occurred, a clearance cannot be granted.
New section 95AO Time limits for determining application
.11 Section 95AO states that if the Commission has not made a determination
on an application by the end of 40 business days from the time of the applicant
giving the application to the Commission, then it is taken to have refused the
clearance. Subsection 95AO(2) allows the applicant to agree to the
Commission taking a specified longer time to make a determination, provided it
occurs before the end of the period referred to in subsection 95AO(1), that is
before the end of the 40th business day, or such other period as is substituted
with the agreement of the applicant.
New section 95AP Clearance subject to conditions
.12 Subsection 95AP(1) enables the Commission to grant a clearance subject to
conditions. It is noted that, consistent with subsection 95AS(5), the
Commission may revoke a clearance if a condition has not been complied with.
It is also noted that the acquisition will only be protected from section 50 if all
of the conditions of the clearance are met and continue to be met, whether such
26 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
a condition is to be complied with before, during or after the consummation of
an acquisition. Should any condition not be met, immunity from section 50 will
not apply and will be considered to have never applied and remedies such as
penalties and divestiture may be sought.
.13 Subsection 95AP(2) provides that a condition of clearance may require that
an undertaking be made to the Commission under section 87B and may require
the undertaking to be in specified terms.
New section 95AQ When clearance is in force
.14 Section 95AQ specifies the date a clearance takes effect. Subsection
95AQ(1) states that a clearance takes effect on the day of the determination if it
is not subject to any conditions. Subsection 95AQ(2) states that, in cases where
a clearance is subject to conditions, the clearance determination will take effect:
27 on the day the Tribunal makes a determination of an application for a
review of the Commission's decision (where the application has not been
withdrawn); or
28 on the day on which the application for a review of the Commission's
decision is withdrawn from the Tribunal; or
29 the day notice is given to the Commission for withdrawing an application
for review by the Tribunal; or
30 in any other case at the end of the period in which an application for
review may be made to the Tribunal.
.1 Subsection 95AQ(3) provides for a clearance to be in force for a specified
time period only.
New section 95AR Minor variations of clearances
Application for variation
.2 Subsection 95AR(1) provides for a person to apply for a minor variation of
a clearance.
Requirements for valid application
.3 Subsection 95AR(2) outlines the requirements for a valid application for a
minor variation. The application must: (a) be in a form prescribed by the
regulations, and contain the information required by the form; (b) be
Trade Practices Legislation Amendment Bill (No. 1) 2005 27
Schedule 1 -- Merger clearances and authorisations
accompanied by such other information and documents prescribed by the
regulations; and (c) be accompanied by the prescribed fee (if any).
Commission to notify if application is invalid
.4 Subsection 95AR(3) provides that the Commission must notify an applicant
if their application for minor variation of merger clearance is invalid within 5
business days: (a) stating that the application is invalid; and (b) giving reasons
as to why the application does not comply with the requirements for a valid
application in this Division.
Application to be published on the Internet
.5 Subsection 95AR(4) requires the Commission to: (a) put the application on
its website (subject to confidentiality); and (b) invite submissions concerning
the application to be made within a period specified by the Commission.
Commission must make a determination on the application
.6 Subsection 95AR(5) requires that the Commission make a determination
either (a) varying the clearance or (b) refusing to vary the minor variation and
notify the applicant in writing giving reasons. Any variation to a clearance
must only apply prospectively.
When variation must not be granted
.7 Subsection 95AR(6) states that the Commission must not make a
determination varying a clearance unless it is satisfied the acquisition in
question would not have the effect, or be likely to have the effect, of
substantially lessening competition (within the meaning of section 50 of the TP
Act).
Time limits for determining application
.8 Subsection 95AR(7) states that if the Commission has not made a
determination on an application for minor variation of a merger clearance by
the end of 40 business days from the time of the applicant giving the
application to the Commission, then it is taken to have refused the clearance.
.9 Subsection 95AR(8) allows the applicant to agree to the Commission taking
a specified longer time to make a determination, provided it occurs before the
end of the period referred to in subsection 95AR(7), that is before the end of the
40th business day, or such other period as is substituted with the agreement of
the applicant.
28 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
2 or more variations at the same time
.10 Subsection 95AR(9) allows the Commission to deal with more than one
minor variation simultaneously if a person applies at the same time or so close
together in time that the Commission considers they can be conveniently dealt
with at the same time, and if the Commission is satisfied that there would not
be a material change in the effect of the clearance if all of the minor variations
are dealt with together.
Applicant may withdraw application
.11 Subsection 95AR(10) allows the applicant to withdraw their application
(providing written notice) at any time.
New section 95AS Revocation of a clearance or revocation of clearance
and substitution of a new clearance
Application for revocation etc.
.12 Subsection 95AS(1) allows the Commission to revoke a clearance or
revoke a clearance and substitute it with a new clearance upon application by
the person who was granted the clearance.
Requirements for valid application
.13 Subsection 95AS(2) outlines requirements for a valid application for
revocation. The application must: (a) be in a form prescribed by the
regulations, and contain the information required by the form; (b) be
accompanied by such other information and documents prescribed by the
regulations; and (c) be accompanied by the prescribed fee (if any).
Commission to notify if application is invalid
.14 Subsection 95AS(3) provides that the Commission must notify an applicant
if their application to revoke a merger clearance application or to revoke their
application and substitute it with a new clearance application is invalid within 5
business days: (a) stating that the application is invalid; and (b) giving reasons
as to why the application does not comply with the requirements for a valid
application in this Division.
Application to be published on the Internet
.15 Subsection 95AS(4) requires the Commission to put a copy of the
application for revocation on its website (subject to confidentiality) and invite
submissions on the application.
Trade Practices Legislation Amendment Bill (No. 1) 2005 29
Schedule 1 -- Merger clearances and authorisations
Commission's powers to revoke etc. where no revocation
.16 Subsection 95AS(5) enables the Commission to revoke a clearance, or
revoke a clearance and substitute a new clearance, in the following
circumstances:
31 the clearance has been granted on the basis of false or misleading
information; or
32 there is non compliance with a condition of the clearance; or
33 there has been a material change of circumstances since the clearance was
granted.
.1 Paragraph 95AS(5)(c) addresses the situation where a clearance is granted
but there is a delay from the time of granting and the date at which the
acquisition takes place. This provision allows the Commission the flexibility to
prevent an anti-competitive merger taking place, when the clearance no longer
applies to that particular set of circumstances. However, as the revocation of a
clearance only applies prospectively, if an acquisition has in fact occurred in
reliance on a merger clearance, the person will retain immunity from section 50
for the acquisition. As a result, the Commission would not be seeking a
revocation where the acquisition has in fact been made.
Commission to give notice
.2 Subsection 95AS(6) requires the Commission to give notice to the person
granted clearance to the effect that the Commission is considering making a
determination of revocation and put a public notice on its website indicating the
basis on which the revocation is being proposed and calling for submissions on
the proposed revocation within the period specified by the Commission.
Commission must make a determination
.3 Subsection 95AS(7) requires that, after considering any submissions, the
Commission make a determination in writing revoking the clearance or
revoking the clearance and substituting a new clearance, or refusing to revoke
the clearance. The Commission's decision and reasons for the decision must be
given in writing to the person originally given the clearance. Any revocation of
a clearance will only apply prospectively.
30 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
When revocation etc. must not be granted
.4 Subsection 95AS(8) requires the Commission to give consideration to
submissions received regarding the revocation of a clearance. The Commission
must not revoke the clearance unless it is satisfied that, had the clearance not
been granted, the Commission would have been prevented from approving the
clearance because it would not have been satisfied that the acquisition would
not have the effect, or be likely to have the effect, of substantially lessening
competition (as consistent with the definition and interpretation under section
50 of the TP Act).
.5 Subsection 95AS(9) requires that the Commission must not make a
determination revoking a clearance and substituting it with another clearance
unless it is satisfied that it could have granted the substituted clearance as if it
were a new clearance under section 95AN. That is, the Commission must be
satisfied that the acquisition would not have the effect, or be likely to have the
effect, of substantially lessening competition (as consistent with the definition
and interpretation under section 50 of the TP Act).
Time limits for determining application
.6 Subsection 95AS(10) states that if the Commission has not made a
determination on an application for revocation of a merger clearance by the end
of 40 business days from the time of the applicant giving the application to the
Commission, then it is taken to have refused to revoke the clearance.
.7 Subsection 95AS(11) allows the applicant to agree to the Commission
taking a specified longer time to make a determination regarding the revocation
application, provided it occurs before the end of the period referred to in
subsection 95AS(10), that is before the end of the 40th business day, or such
other period as is substituted with the agreement of the applicant.
Withdrawal of application
.8 Subsection 95AS(12) enables the applicant to withdraw their application for
revocation to the Commission at any time, provided it is done in writing.
Subdivision C -- Merger authorisations
.9 The Dawson Review identified that dissatisfaction with the merger
authorisation process is largely attributed to concerns about the time taken by
the Commission to reach a decision and the risk of third party intervention by
way of appeal to the Tribunal. These factors were considered, by the Dawson
Review, to make the merger authorisation process commercially unrealistic for
Trade Practices Legislation Amendment Bill (No. 1) 2005 31
Schedule 1 -- Merger clearances and authorisations
many merger proposals. The merger authorisation process will be made more
attractive to business through these amendments by making it more timely and
reducing the uncertainty involved.
.10 The proposed subdivision outlines the procedure for merger authorisation
applications. It removes the power of the Commission to assess merger
authorisation applications and creates a new process whereby the Tribunal will
have the power to directly assess merger authorisation applications. This
subdivision provides that applications should be considered by the Tribunal
within a statutory time limit and that there be no merits review of decisions
made by the Tribunal. Third party interests will be considered as part of the
Tribunal's assessment rather than through an appeal process.
.11 These amendments are consistent with the findings and recommendations
of the Dawson Review.
New section 95AT Tribunal may grant authorisation for a merger
.12 Section 95AT enables the Tribunal to grant an authorisation for a merger:
(a) to acquire shares in the capital of a body corporate; and (b) to acquire assets
of another person. The prohibition on anti-competitive mergers will not
prevent the acquisition of shares or assets in accordance with the authorisation.
It is noted that, pursuant to the test for merger authorisations in section 95AZH,
the Tribunal must not grant an authorisation unless it is satisfied that the
acquisition would result, or be likely to result, in such a benefit to the public
that the acquisition should be allowed to take place.
.13 Subsection 95AT(2) provides that, if the Tribunal grants an authorisation,
the prohibition on anti-competitive mergers in section 50 will not prevent the
acquisition of shares or assets in accordance with the clearance. It is noted that
the acquisition will only be protected if it is made entirely in accordance with
the authorisation. Should the acquisition not be in accordance with the
authorisation, immunity from section 50 will not apply and will be considered
to have never applied. A failure to comply with an authorisation may,
therefore, have serious consequences for the person granted the authorisation
because the authorisation may be revoked or remedies such as penalties and
divestiture may be sought.
.14 Subsection 95AT(3) provides that an acquisition will not be in accordance
with section 50 should any conditions of the authorisation not be met, whether
the conditions are to be complied with before, during or after the acquisition.
32 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
New section 95AU Application for authorisation
.15 Section 95AU requires a person who wants an authorisation for the purpose
of acquiring shares or assets to apply to the Tribunal. A third party may make
an application on the person's behalf in accordance with agency principles.
New section 95AV Requirements for valid authorisation application
.16 Section 95AV specifies the requirements for a valid formal authorisation
application. The application must be: (a) in a form prescribed by the
regulations and contain the information required by the form; (b) accompanied
by such other information or documents as are prescribed by regulations; and
(c) accompanied by the fee (if any) prescribed by the regulations.
.17 The application form may contain a requirement (to be prescribed by
regulation) that the applicant make an undertaking under section 87B that it will
not make the acquisition while the application is being considered by the
Tribunal.
New section 95AW Tribunal to notify if authorisation application is invalid
.18 Section 95AW obligates the Tribunal to notify an applicant if their
application for clearance is invalid within 5 business days of receiving the
purported application (a) stating that the application is invalid and (b) giving
reasons as to why the application does not comply with the requirements for a
valid application required by this Division.
New section 95AX Tribunal to notify Commission of authorisation
application
.19 Section 95AX requires the Tribunal to notify the Commission within
3 business days of receiving an authorisation application and provide it with a
copy of the application.
New section 95AY Application to be published on the Internet
.20 Section 95AY requires the Commission to publish a copy of the application
for authorisation on its website, subject to the confidentiality requirements in
section 95AZA, and also invite submissions in respect of the application within
a period specified by the Tribunal.
New section 95AZ Merger authorisation register
.21 Section 95AZ requires the Tribunal to maintain a merger authorisation
register of all applications including minor variations, revocation of
Trade Practices Legislation Amendment Bill (No. 1) 2005 33
Schedule 1 -- Merger clearances and authorisations
authorisations and withdrawn or abandoned proposals. The Tribunal is required
to keep details of documents, particulars of oral submissions and the Tribunal's
determination and reasons in relation to an authorisation application or proposal
(subject to the confidentiality requirements in section 95AZA).
New section 95AZA Confidentiality claims etc.
Requests for confidential treatment
.22 Subsection 95AZA(1) allows a person who gave information in regard to
any of the applications outlined in section 95AZ(1) to request that information
be excluded from the Commission's website and the merger authorisation
register on grounds of confidentiality.
Confidentiality claims to be determined first
.23 The Tribunal must not include information in the merger authorisation
register, or the Commission's website, until it has determined any request for
confidentiality.
When Tribunal must exclude information -- request made
.24 The Tribunal must exclude information concerning:
34 particulars of a secret formula or process;
35 the cash consideration offered for the acquisition of shares or assets; or
36 the current costs of manufacturing, producing or marketing goods or
services.
When Tribunal may exclude information -- request made
.1 The Tribunal may exclude information from the register and its website on
request if it is satisfied that it is desirable to do so because of the confidential
nature of the information.
If request refused, document may be withdrawn
.2 If the Tribunal refuses the confidentiality request, it must return the
documents (or relevant parts thereof) to the applicant on request and must not
include them in the register or on the Commission's website.
34 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
If request refused, oral submission may be withdrawn
.3 An applicant can withdraw all or part of their oral submission should their
request for confidentiality be refused by the Tribunal, which must exclude the
relevant material from the register and the Commission's website.
When Tribunal may exclude information -- no request made
.4 The section also provides that the Tribunal may exclude information from
the register and its website for reasons other than confidentiality.
New section 95AZB Procedure
.5 This section provides the Tribunal with discretion for determining merger
authorisation applications with as little formality and technicality, and as
expeditiously, as possible consistent with the requirements of the TP Act and
the proper consideration of the matters before the Tribunal. The Tribunal is not
bound by the rules of evidence.
.6 Subsection 95AZB(2) provides the presidential member of the Tribunal
with discretion in respect of procedural matters.
New section 95AZC Tribunal may seek additional information from
applicant
.7 The Tribunal will be able to seek additional information from an applicant
in determining a merger authorisation application.
New section 95AZD Tribunal may consult others
.8 The Tribunal will be able to undertake consultation with persons it deems
appropriate for the purposes of making its determination for a merger
authorisation application.
New section 95AZE Applicant may withdraw application
.9 The applicant will be able to withdraw their merger authorisation
application from the Tribunal at any time by notice in writing.
New section 95AZF Commission to assist Tribunal
.10 The Commission must provide information, make reports and provide such
other assistance to the Tribunal to enable it to make a determination, as the
presiding member of the Tribunal requires.
Trade Practices Legislation Amendment Bill (No. 1) 2005 35
Schedule 1 -- Merger clearances and authorisations
New section 95AZG Tribunal to make determination on application
.11 The Tribunal must make a determination (a) granting the authorisation or
(b) refusing the authorisation of the application in writing, taking into account
submissions received from the Commonwealth, states, territories, the applicant
and any other person when making its determination. The Tribunal will be
required to notify the applicant in writing of the outcome of the determination
on a merger authorisation and give reasons supporting its decision.
.12 It is noted that the Tribunal must make its determination within the time
limit set out in section 95AZI. If it does not then it is taken to have refused to
grant the authorisation.
New section 95AZH When authorisation must not be granted
.13 This provision states the test for granting an authorisation -- the Tribunal
must not grant an authorisation unless it is satisfied the acquisition would result,
or be likely to result, in such a benefit to the public that the acquisition should
be allowed to occur. Subsection 95AZH(2) outlines the criteria the Tribunal
should have regard to when determining what amounts to a benefit to the
public:
37 a significant increase in the real value of exports;
38 a significant substitution of domestic products for imported goods; and
39 all other relevant matters that relate to the international competitiveness
of any Australian industry.
.1 These criteria are not to be taken as limiting any other benefits to the public
that may be taken into account by the Tribunal.
.2 An authorisation cannot be granted for an acquisition that has already taken
place.
New section 95AZI Time limits for determining application
.3 If the Tribunal has not made a determination on an application within the
relevant period, it is taken to have refused to grant the authorisation.
Subsection 95AZI(2) defines the relevant period as 3 months commencing on
the day an application is given to the Tribunal with provision for the Tribunal to
extend this period by another 3 months if the Tribunal determines in writing
that the matter cannot be dealt with properly within the first three months either
because of its complexity or because of other special circumstances.
36 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
.4 The Tribunal is required to notify the applicant in writing of the outcome of
its determination, either before the end of the initial 3 months or the further
three month period as extended by the Tribunal.
New section 95AZJ Authorisation subject to conditions
.5 Subsection 95AZJ(1) enables the Tribunal to grant an authorisation subject
to conditions. This subsection notes that the Commission may apply to the
Tribunal to revoke a merger authorisation should the conditions of the
authorisation not be complied with. The subsection also notes that the
acquisition will only be protected from section 50 if all of the conditions of the
authorisation are met, whether such a condition is to be complied with before,
during or after the acquisition. Should any condition not be met, immunity
from section 50 will not apply and will be considered to have never applied and
remedies such as penalties and divestiture may be sought.
.6 Subsection 95AZJ(2) provides that a condition of an authorisation may
require that an undertaking be made to the Commission under section 87B and
may require the undertaking to be in specified terms.
New section 95AZK When authorisation is in force
.7 This specifies when an authorisation comes into force. Subsection
95AZK(1) states that an authorisation may be specified to takes effect on the
day the authorisation is granted. Subsection 95AZK(2) provides for an
authorisation to be in force for a specified time period only.
New section 95AZL Minor variations of authorisation
Application for variation
.8 This provides for minor variations of authorisations. Subsection 95AZL(1)
provides for a person to apply to the Tribunal for minor variations to an
authorisation.
Requirements for valid application
.9 Subsection 95AZL(2) outlines the conditions for validity of an application.
It must be:
40 in a form prescribed by the regulations and contain the information
required by the form; and
41 accompanied by such other information or documents as are prescribed
by the regulations; and
Trade Practices Legislation Amendment Bill (No. 1) 2005 37
Schedule 1 -- Merger clearances and authorisations
42 accompanied by the fee (if any) prescribed by the regulations.
Tribunal to notify if application is invalid
.1 Subsection 95AZL(3) provides that the Tribunal must notify an applicant if
their application for merger authorisation is invalid within 5 business days: (a)
stating that the application is invalid; and (b) giving reasons as to why the
application does not comply with the requirements for a valid application in this
Division.
Tribunal to give the Commission a copy of the application
.2 Subsection 95AZL(4) requires the Tribunal to provide a copy of the
application for a minor variation to the Commission within 3 business days of
receiving it, if it is satisfied that it is minor.
Application to be published on the Internet
.3 Subsection 95AZL(5) requires the Commission to put a copy of the
application for a minor variation on its website (subject to the confidentiality
requirements in section 95AZA) and invite submissions by notice on its website
in respect of the application to be made within a period specified by the
Tribunal.
Tribunal must make a determination on the application
.4 Subsection 95AZL(6) states that, following consideration of the application
and any submissions received within the time period specified by the Tribunal,
the Tribunal must make a determination varying the authorisation or refusing to
vary the application in writing, and give reasons for its decision. Any variation
to an authorisation only applies prospectively.
When variation must not be granted
.5 Subsection 95AZL(7) states that the Tribunal must not make a
determination varying an authorisation unless the variation would not result, or
be likely to result, in a reduction in the benefit to the public that arose from the
original authorisation.
Time limits for determining application
.6 Subsection 95AZL(8) states that the should the Tribunal not make a
determination within the relevant time period, it is deemed to have refused to
vary the authorisation.
38 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
.7 Subsection 95AZL(9) states that the relevant period for merger
authorisation is 3 months commencing on the day the application was received
by the Tribunal. This period can be extended if the Tribunal decides that the
matter cannot be dealt with properly in the period either because of the
complexity of the acquisition or other circumstances, by a maximum of a
further 3 months. The Tribunal must make this determination in writing.
.8 Subsection 95AZL(10) requires the Tribunal to notify the applicant in
writing before the conclusion of the 3 months should the Tribunal decide to
extend the period for making its determination on the authorisation.
2 or more variations at the same time
.9 Subsection 95AZL(11) allows the Tribunal to deal with more than one
minor variation simultaneously if a person applies at the same time, or in close
succession, and if the Tribunal is satisfied that there would not be a material
change in the effect of the authorisation.
Applicant may withdraw application
.10 Subsection 95AZL(12) allows the applicant to withdraw their application
from the Tribunal (via written notice) at any time.
Powers and procedures of the Tribunal
.11 Subsection 95AZL(13) provides the powers found in sections 95AZB,
95AZC, 95AZD and 95AZF to the Tribunal to enable it to consider a minor
variation to an authorisation.
New section 95AZM Revocation of authorisation or revocation of
authorisation and substitution of a new authorisation
Application for revocation
.12 Section 95AZM allows the Tribunal to revoke an authorisation or revoke
an authorisation and substitute it with a new authorisation.
.13 Subsection 95AZM(1) allows the Tribunal to revoke an authorisation or
revoke an authorisation and substitute it with a new authorisation upon the
application of the person to whom the authorisation was granted.
Requirements for valid application
.14 Subsection 95AZM(2) outlines the requirements for a valid application for
a revocation. The application must: (a) be in a form prescribed by the
Trade Practices Legislation Amendment Bill (No. 1) 2005 39
Schedule 1 -- Merger clearances and authorisations
regulations, and contain the information required by the form; (b) be
accompanied by such other information and documents prescribed by the
regulations; and (c) be accompanied by the prescribed fee (if any).
Tribunal to notify if application is invalid
.15 Subsection 95AZM(3) provides that the Tribunal must notify an applicant
if their application to revoke a merger authorisation application or to revoke
their application and substitute it with a new authorisation application is invalid
within 5 business days: (a) stating that the application is invalid; and (b) giving
reasons as to why the application does not comply with the requirements for a
valid application in this Division.
Tribunal to give the Commission a copy of the application
.16 Subsection 95AZM(4) requires the Tribunal to provide a copy of the
application to the Commission within 3 business days of receiving the
application.
Application to be published on the Internet
.17 Subsection 95AZM(5) requires the Commission to put a copy of the
application on its website (subject to confidentiality) and invite submissions in
respect of the application to be made within a period specified by the Tribunal.
Commission may apply for revocation
.18 Subsection 95AZM(6) enables the Commission to apply to the Tribunal to
have an authorisation revoked, or for an authorisation to be revoked and
substituted with a new authorisation, if the Commission is satisfied that: (a) the
authorisation was granted on the basis of false or misleading information; (b) a
condition of the authorisation had not been complied with; or (c) there has been
a material change of circumstances since the authorisation was granted.
.19 Paragraph 95AZM(6)(c) addresses the situation where an authorisation is
granted but there is a delay between the time of granting and the date at which
the acquisition takes place and, during this time, the Commission believes there
to have been a material change of circumstances. In this case, and in order to
prevent an anti-competitive merger taking place, the Commission may apply to
the Tribunal for the authorisation to be revoked on the basis that it was granted
for a certain set of circumstances which no longer apply. However, as the
revocation of an authorisation may only apply prospectively, if an acquisition
has in fact occurred in reliance on the merger authorisation, the person will
retain immunity from section 50 for the acquisition. As a result, the
40 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
Commission would not be seeking a revocation where the acquisition has in
fact been made.
Tribunal to give notice
.20 Subsection 95AZM(7) requires the Tribunal to give notice to the person
granted authorisation to the effect that the Tribunal is considering making a
determination and put public notice on the Commission's website indicating the
basis on which the determination is being proposed and calling for submissions
on the determination to be received within a time period specified by the
Tribunal.
Tribunal must make a determination
.21 Subsection 95AZM(8) requires the Tribunal after considering any
submissions received in the specified period, to make its determination in
writing revoking, or revoking and substituting a new authorisation, or refusing
to revoke, in writing, the person originally granted the authorisation. Any
revocation of an authorisation will only apply prospectively.
When revocation etc. must not be granted
.22 Under subsection 95AZM(9) the Tribunal must not revoke an authorisation
unless it is satisfied that it would not have been granted under the section
95AZH (that is, the authorisation should not be granted because it would not
result, or be likely to result, in the requisite benefit to the public).
.23 Under subsection 95AZM(10) the Tribunal must not revoke an
authorisation and substitute it with another authorisation unless it is satisfied
that the new authorisation would result, or be likely to result, in such a benefit
to the benefit to the public that it should be granted.
Time limits for determining application
.24 Subsection 95AZM(11) states that should the Tribunal not make a
determination on an application consistent with subsections 95AZM(1) or (6)
within the relevant time period, it is deemed to have refused to vary the
authorisation.
.25 Subsection 95AZM(12) states that the relevant period for merger
authorisation is 3 months commencing on the day the application was received
by the Tribunal. The Tribunal can decide to extend the 3 month period due to
the complexity of the acquisition or other special circumstances by a maximum
of a further 3 months. The Tribunal must make this determination in writing.
Trade Practices Legislation Amendment Bill (No. 1) 2005 41
Schedule 1 -- Merger clearances and authorisations
.26 Subsection 95AZM(13) requires the Tribunal to notify the applicant in
writing before the conclusion of the 3 months should the Tribunal decide to
extend the period for making its determination on the authorisation.
Withdrawal of application
.27 Subsection 95AZM(14) enables the applicant or the Commission to
withdraw their application for revocation from the Tribunal at any time,
provided it is done in writing.
Powers and procedures of the Tribunal
.28 Subsection 95AZM(15) provides the powers found in sections 95AZB,
95AZC, 95AZD and 95AZF to the Tribunal to enable it to consider an
application for revocation, or revocation and substitution, of an authorisation.
Subdivision D -- Miscellaneous
.29 This Subdivision contains prohibitions on providing false or misleading
information to the Commission or the Tribunal.
New section 95AZN Providing false or misleading information
.30 This provides that a person must not be negligent as to whether information
given to the Tribunal or the Commission is false or misleading in a material
particular. Subsection 95AZN(2) indicates that proof that a person knew that ,
or was reckless as to whether, information was false or misleading in a material
particular will be taken as proof of negligence for the purposes of subsection
95AZN(1).
.31 Negligence as to the giving of false or misleading information may attract a
pecuniary penalty under section 76 (see Items 1 and 2 in Part 1 of Schedule 9).
Remedies would also be available for such negligence under sections 80AC,
81A and 86C.
Item 28 -- Division 1 of Part IX (heading)
.32 Item 28 repeals the heading Division 1 of Part IX and substitutes it with:
Division 1 -- Applications for review (other than for merger clearances)
.33 Division 1 of Part IX contains the processes by which a person dissatisfied
with a determination by the Commission can seek a review of their application
other than for merger clearance determinations.
42 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
Item 29 -- Subsection 101(1)
.34 Item 29 amends subsection 101(1) to provide for a person dissatisfied with
a determination by the Commission relating to authorisations other than a
merger authorisation to apply to the Tribunal for a review of the determination.
Item 30 -- Subsections 102(1) and (2)
.35 Item 30 amends subsections 102(1) and 102(2) to enable the Tribunal to
make a determination, varying, affirming or setting aside a determination by the
Commission relating to authorisations, other than those for mergers.
Subsection 102(2) provides that the determination made by the Tribunal (with
respect to authorisations other than merger authorisations) can be taken to be a
determination of the Commission.
Item 31 -- Subsection 102(6)
.36 Item 31 amends subsection 102(6) to insert `under this Division' to follow
after the first occurring `Tribunal'. This provides the Tribunal with authority to
request that the Commission make relevant information available at the
Tribunal's request.
Item 32 -- Subsection 102(7)
.37 Item 32 amends subsection 102(7) to insert `under this Division' to follow
after the first occurring `review'. This provides that the Tribunal may consider
information provided by or in evidence given to the Commission in making its
determination when the Tribunal considers its review of non-merger
authorisations.
Item 33 -- Division 2 of Part IX (heading)
.38 Item 33 repeals the heading to Division 2 of Part IX and replaces it with
Division 2 -- Procedure and evidence (other than for review of merger
clearances)
Trade Practices Legislation Amendment Bill (No. 1) 2005 43
Schedule 1 -- Merger clearances and authorisations
Item 34 -- Before section 103
New section 102A Application of this Division
.39 Item 34 inserts a new section 102A stating that the Division applies for the
purposes of review under Division 1.
Item 35 -- Subsection 109(1)
.40 Item 35 amends subsection 109(1) to insert `under Division 1 of Part VII'
after the first occurring `authorization'.
Item 36 -- At the end of Part IX
.41 This item inserts Division 3 to follow on from the end of Part IX.
Division 3 -- Review of Commission's determinations on merger
clearances
.42 The Dawson Review found that dissatisfaction with the informal clearance
process resulted largely from the absence of an effective appeal mechanism
within the system. Accordingly, the formal clearance process will provide
parties with a right of review to the Tribunal. Third parties do not have a right
of review from the Commission's determination on formal clearance, however,
the view of third parties will be considered during the course of the
Commission's formal clearance determination.
New section 111 Applications for review
.43 This new section outlines the process for review of the Commission's
determinations on merger clearances.
.44 Subsection 111(1) enables a person who has applied for a clearance, a
minor variation, a revocation of a clearance or a revocation of a clearance that
has been substituted with another clearance, to apply to the Tribunal for a
review of the determination within the time specified by the regulations.
.45 Subsection 111(2) enables a person granted a clearance that was revoked or
revoked and substituted with another clearance by the Commission to apply to
the Tribunal for a review of the determination within the time specified by the
regulations.
.46 Subsection 111(3) requires the Tribunal to review the determination upon
receiving the application and the prescribed fee.
44 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
.47 Subsection 111(4) enables the Tribunal to make a determination by consent
regardless of whether or not it is satisfied that the application would not have
the effect, or be likely to have the effect, of substantially lessening competition.
.48 Subsection 111(5) enables a presidential member of the Tribunal to shorten
the time period prescribed in the regulations for review of the determination at
the request of the applicant, if the member is satisfied that special
circumstances exist, and that it would not be unfair to do so.
New section 112 Tribunal to notify Commission
.49 Section 112 requires the Tribunal to notify the Commission of the
application for review.
New section 113 Commission to give material to Tribunal
.50 Section 113 requires the Commission to provide the Tribunal with all
information relevant to the making of the determination, including confidential
information, within 2 business days of being notified of the application for
review.
New section 114 Tribunal may consult etc. to clarify information
.51 Section 114 enables the Tribunal to consult for the purposes of clarifying
information given to the Commission in connection with a merger clearance
and then passed to the Tribunal pursuant to section 113.
.52 Subsection 114(1) enables the Tribunal to seek relevant information, and
consult with any persons that it considers reasonable and appropriate, for the
purposes of clarifying information given to the Commission in connection to
the making of the determination to which the review relates.
.53 Subsection 114(2) enables the Tribunal to disclose confidential information
to persons, as it considered reasonable and appropriate, if it is considered
necessary for the purposes of clarifying the information.
.54 For example, the Tribunal may consult with an industry expert or expert
economist who wrote a report that was submitted to the Commission in
connection with a merger clearance that is the subject of the review. The
Tribunal's consultations might seek to clarify any assumptions made by the
expert in writing their report, so as to enable the Tribunal to consider the
appropriateness of those assumptions and thus the appropriate weight that
should be given to the conclusions posited in the report.
Trade Practices Legislation Amendment Bill (No. 1) 2005 45
Schedule 1 -- Merger clearances and authorisations
New section 115 Commission to assist Tribunal
.55 Section 115 enables a member of the Tribunal presiding at the review to
require assistance from the Commission (including giving information and
making reports), as the member specifies.
New section 116 Tribunal only to consider material before the
Commission
.56 Section 116 requires the Tribunal to have regard only to material that has
been given to the Commission and that has then been given to the Tribunal
under section 113, information that was referred to in the Commission's
reasons for the determination to which the review relates and information given
to the Tribunal under section 114.
.57 In considering any document or other information given to the
Commission, the Tribunal is entitled to consider any case, article, report or
other like thing referred to in the document or in the information given to the
Commission. For example, the Tribunal is entitled to have regard to the
entirety of any book that is referred to in a footnote in a document given to the
Commission, so as to enable the Tribunal to properly consider the argument
that is said to be supported by a passage in that book.
New section 117 Tribunal to make decision on review
.58 Section 117 requires the Tribunal to make a determination affirming,
varying or setting aside the Commission's determination.
New section 118 Time limits for making review decision
.59 Section 118 requires the Tribunal to make its decision on the application
review within 30 business days although the Tribunal may extend this period by
a further 60 business days if the Tribunal decides the matter cannot be dealt
with sooner because of its complexity or because of other special
circumstances. If the Tribunal makes a decision to extend this period, it must
notify the applicant before the conclusion of the 30 business day period.
.60 Business day refers to a day that is not a Saturday, a Sunday, or a public
holiday in the Australian Capital Territory.
New section 119 Tribunal's decision taken to be Commission's
.61 Section 119 makes it clear that the Tribunal's determination for the
purposes of this Act will replace the Commission's determination.
46 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
Item 37 -- Section 150J
.62 Item 37 provides a consequential amendment to section 150J which inserts
`clearance' to follow `notification'.
Item 38 -- Paragraph 157(1)(a)
.63 Item 38 amends paragraph 157(1)(a) by inserting `or Subdivision B of
Division 3 of Part VII' after `91C'. This is a consequential amendment
requiring the Commission to disclose documents where various types of
applications have been made to the Commission. The required disclosure will
include material relating to applications for merger clearances.
Item 39 -- After paragraph 157(1)(b)
.64 Item 39 inserts paragraph 157(1)(ba) to make a consequential amendment
requiring the Commission's obligation to disclose documents to include
material where the Commission proposes to revoke, or revoke and substitute, a
clearance under new section 95AS.
Item 40 -- Paragraph 157(1)(c)
.65 Item 40 makes a consequential amendment to paragraph 157(1)(c)
(provision of documents by the Commission in relation to legal proceedings
under sections 77, 80 or 81) to include a reference to proceedings under section
80AC or 81A (injunctions or divestiture for providing false or misleading
information in relation to merger processes).
Item 41 -- After section 157
New section 157A Disclosure of documents by Tribunal in relation to
merger authorisations
.66 Section 157A outlines the procedure for disclosure of documents by the
Tribunal in relation to merger authorisations. Subsection 157A(1) requires the
Tribunal to provide a copy of all documents obtained by, given to, or in the
possession of, the Tribunal in relation to the application for a merger
authorisation or a proposal to vary, revoke or revoke or substitute an
authorisation to the corporation that applied for the authorisation, upon payment
of the prescribed fee, where those documents tend to establish the corporation's
case.
Trade Practices Legislation Amendment Bill (No. 1) 2005 47
Schedule 1 -- Merger clearances and authorisations
.67 Subsection 157A(2) does not require the Tribunal to give the corporation
documents that were obtained from the corporation or prepared by an officer or
professional advisor of the Tribunal.
.68 Subsection 157A(3) states that the Court must direct the Tribunal to
comply with disclosure of documents should the Tribunal not provide copies of
documentation to the corporation, unless subsection 157A(4) applies.
.69 Subsection 157A(4) states that the Court may refuse to make the order
under subsection (3) for the Tribunal to provide copies of the documentation to
the corporation if it considers that disclosure of the documents, or part of the
documents, would be prejudicial to any person, or for any other reason.
.70 Subsection 157A(5) states that the Court may examine the contents of the
documentation before making a decision as to whether the Tribunal must
comply with a request for documentation.
.71 Subsection 157A(6) states that an order given by the Tribunal may be
subject to conditions, which must be specified in that order.
Item 42 -- Paragraph 170(3)(a)
.72 This item makes a consequential amendment to paragraph 170(3)(a) by
inserting `authorisation under Division 1 of Part VII or a clearance under
Division 3 of Part VII' in place of `authorization', extending the ability to apply
for legal and financial assistance to clearance proceedings before the
Commission (as well as continuing to apply to authorisations).
Item 43 -- Paragraph 170(3)(b)
.73 This item is a consequential amendment to insert references to the
Tribunal's functions of reviewing merger clearance decisions by the
Commission, and making merger authorisation decisions, ensuring that legal
and financial assistance may be applied for in relation to these proceedings
before the Tribunal (as well as continuing to apply for proceedings by the
Tribunal in relation to declarations under section 50A).
Item 44 -- Subsection 46(6) of the Schedule
.74 Subsection 46(6) of the Schedule ensures that where there is an
authorisation or notification in force for conduct relating to sections 45, 45B, 47
and 50, or section 93, that conduct is immune from action under section 46.
48 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 1 -- Merger clearances and authorisations
Subsection 46(6) of the Schedule is extended to include where there is a
clearance in force.
Item 45 -- At the end of subsection 50(1) of the Schedule
.75 This item notes at the end of subsection 50(1) of the Schedule that a person
will not be prevented from making an acquisition if the corporation is granted a
clearance or authorisation for the acquisition under Division 3 of Part VII. As
consistent with subsections 95AC(2) and 95AT(2) it is noted that the
acquisition will only be protected if the conditions of the clearance or
authorisation are met and a failure to comply with those conditions may have
serious consequences for the party to that merger including revocation and a
range of remedies such as pecuniary penalties, an injunction and divestiture
may be applied.
Item 46 -- Paragraph 50(4)(b) of the Schedule
.76 This item inserts the words `a clearance or' after `granted' to extend the
existing provision that applies to merger authorisation to merger clearance.
Item 47 -- Paragraph 50(4)(c) of the Schedule
.77 This item inserts the words `a clearance or' after `such', to extend the
existing provision that applies to merger authorisation to merger clearance.
Item 48 -- Paragraph 50(4)(d) of the Schedule
.78 This item inserts the words `the clearance or' after `for the' to extend the
existing provision that applies.
Item 49 -- Paragraph 50(5) of the Schedule
.79 This item omits `an authorization' and substitutes it with `a clearance'.
Item 50 -- Paragraphs 50(5)(a) and (b) of the Schedule
.80 This item omits `the authorization' and substitutes it with `the clearance'.
Trade Practices Legislation Amendment Bill (No. 1) 2005 49
Schedule 1 -- Merger clearances and authorisations
Item 51 -- After subsection 50(5) of the Schedule
.81 This item inserts subsection 5A to follow subsection 50(5) which provides
that an application for authorisation is extinguished 14 days after the Tribunal
has made a determination.
Item 52 -- Application of amendments
.82 Item 52 states that the amendments to the TP Act made by Schedule 1 (the
new clearance and merger authorisation processes) apply in relation to
applications for clearances or authorisations made after the commencement of
the item. Consequently (subject to item 46) authorisations applied for before
the new merger processes commence will be subject to the procedures existing
prior to the commencement of the new processes. Applications for a minor
variation or revocation of an authorisation applied for before commencement of
the amendments, will be considered by the review procedures existing prior to
the commencement of the amendments.
Item 53 -- Transitional
.83 This item introduces transitional provisions for authorisations under
proposed new Division 3 of Part VII of the TP Act (the new merger processes).
Subsection (1) provides that a person who applied for an authorisation under
the old procedures may not apply for an authorisation under the new procedures
unless the Commission is yet to make its determination on the application and
the person withdraws their old application.
50 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 2 -- Non-merger authorisations
Trade Practices Act 1974
.1 The Schedule amends non-merger authorisations in the TP Act.
Item 1 -- Subsection 89(1)
.2 Item 1 repeals the existing subsection 89(1) and replaces it with a new
subsection that requires that applications for authorisation, minor variation,
revocation or revocation substituted with another authorisation, must be:
2 in a form prescribed by the regulations and contain the information
required by the form; and
3 accompanied by all documentation and other information as prescribed by
the regulations; and
4 accompanied by any fee (if any) prescribed by the regulations.
.1 New subsection 89(1A) requires that the Commission give 5 business days
notice to an applicant if their application is invalid and provide reasons why the
purported application does not comply with the requirements in this Division.
.2 New subsection 89(1B) defines a business day to mean Monday to Friday
except for those days which are public holidays in the Australian Capital
Territory.
Item 2 -- Subsection 89(2)
.3 Item 2 amends subsection 89(2) to omit `such an application' and replace it
with `an application referred to in subsection (1)'. This provides for the
Commission to make public an application for a non-merger authorisation,
upon receipt.
Item 3 -- Subsections 90(10) and (10A)
.4 Item 3 repeals subsections 90(10) and (10A) and replaces them with new
text.
Trade Practices Legislation Amendment Bill (No. 1) 2005 51
Schedule 2 -- Non-merger authorisations
.5 New subsection 90(10) provides that the Commission will be taken to have
granted an application for authorisation if it does not respond in the relevant
period.
.6 New subsection 90(10A) provides that where the Commission has prepared
a draft determination in respect of a non-merger application before the end of 6
months beginning on the day the Commission received the application, the
Commission may decide to extend the period by not more than 6 months as
long as the applicant agrees to the extension.
Item 4 -- Subsection 90(11)
.7 Item 4 amends subsection 90(11) by omitting `(12), (13) and (15)' and
substituting it with `(12) and (13)'. This prevents parties to a joint venture
making two or more applications for authorisations at the one time.
Item 5 -- Subsection 90(12)
.8 Item 5 amends subsection 90(12) to omit the first occurring `(10) or'. This
removes the reference to non-merger authorisations which will be subject to
new time provisions in Schedule 1.
Item 6 -- Subsection 90(12)
.9 Item 6 amends subsection 90(12) to omit `(10) or (11), as the case may be'
and substitute it with `(11)'. This amends the section so that applications for
non-merger authorisation will be subject to provisions in Schedule 1.
Item 7 -- Subsection 90(13)
.10 Item 7 amends subsection 90(13) to omit `(10) or'. This amendment
removes the reference to non-merger authorisation so as to ensure consistency
with the provisions of Schedule 1.
Item 8 -- Subsection 90(14)
.11 Item 8 amends subsection 90(14) to omit `period referred to in subsection
(10) of this section' to be substituted with `relevant period (worked out under
subsection (10A) of this section)'. This amends the section to enable the time
period for consideration of an extension of a determination to be consistent with
subsection 90(10A).
52 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 2 -- Non-merger authorisations
Item 9 -- Subsection 90(15)
.12 Item 9 amends subsection 90(15) to insert `(other than an application for an
authorisation under subsection 88(9))' after the first occurring `authorizations'.
This amendment excludes the new formal merger authorisation process from
the operation of the subsection.
Item 10 -- Paragraph 90(15)(b)
.13 Item 10 amends paragraph 90(15)(b) to omit `period referred to in
whichever of subsections (10) and (11) is applicable' and substitutes `relevant
period (worked out under subsection (10A))'. This amendment limits the
application of the subsection to non-merger applications as the Commission and
Tribunal have different time frames for clearance procedures.
Item 11 -- After subsection 101(1)
.14 Item 11 inserts a new subsection (1AAA) to follow subsection 101(1).
This provides for a person dissatisfied with a determination by the Commission
in relation to an application for varying or reviewing an authorisation to apply
to the Tribunal for review, except for matters where the Commission has
received an invalid application and has given notice that the application is
invalid.
Item 12 -- After subsection 172(2)
.15 Item 12 inserts new subsections (2A) and (2B) to follow subsection 172(2).
It provides that regulations may prescribe the circumstances in which the
Commission may waive fees that would otherwise be payable. This does not
apply to applications for authorisation under subsection 88(9) or minor
variations, revocations or revocations substituted with another authorisation.
Item 13 -- Application
.16 Item 13 states that the amendments made in Schedule 2 are applicable to all
applications made after the commencement of the Schedule.
Trade Practices Legislation Amendment Bill (No. 1) 2005 53
Schedule 2 -- Non-merger authorisations
Item 14 -- Saving
.17 Item 14 provides that regulations of this Act already in force for the
purposes of non-merger authorisations will continue to have effect until they
have been replaced and that applications received for non-merger authorisations
but not yet determined will be subject to the old procedures.
54 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
Trade Practices Act 1974
.1 The Dawson Review concluded that collective bargaining should not be
completely exempted from Part IV of the TP Act (Restrictive trade practices).
However, it also concluded that it may be in the public interest to enable small
business to negotiate more effectively in situations where there is an imbalance
of negotiating power. The Dawson Review therefore recommended that, as an
alternative to authorisation, a notification process should be introduced along
the lines of the process contained in section 93 of the TP Act (Notification of
exclusive dealing) for collective bargaining by small business (including
co-operatives that meet the definition of small business) dealing with large
business. This Schedule amends the TP Act to provide for such a notification
process.
.2 The collective bargaining notification scheme will be available for any
small business, including an independent contractor, which meets the necessary
requirements. However, in line with the clear demarcation, acknowledged and
supported by the Dawson Review, between the regulation of business
relationships and employment relationships, it is not envisaged that the
collective bargaining provisions would be used to pursue matters affecting
employment relationships.
Item 1 -- Subsection 8A(6)
.3 Item 1 expands the section dealing with associate members of the
Commission. Under the current provisions of the TP Act, for the purpose of
making a determination in regard to an application for an authorisation or a
decision in regard to notification of exclusive dealing, the Chairperson of the
Commission may direct that one or more associate members of the Commission
be deemed to be members of the Commission. Item 1 provides for similar
powers to be bestowed on associate members for the purpose of making a
decision (issuing an objection notice) in regard to notification of collective
bargaining.
Item 2 -- After subsection 45(8)
.4 Subsection 45(2) of the TP Act restricts corporations from making a
contract or arrangement or arriving at an understanding if an exclusionary
provision is included or a provision of the proposed contract, arrangement or
Trade Practices Legislation Amendment Bill (No. 1) 2005 55
Schedule 3 -- Collective bargaining
understanding has the purpose or likely effect of substantially lessening
competition. Further, no corporation may give effect to a provision of a
contract, arrangement or understanding if that provision is an exclusionary
provision or has the purpose or likely effect of substantially lessening
competition. Consequently, section 45 generally prohibits collective bargaining
as a form of collusive conduct.
.5 Item 2 inserts a new subsection 45(8A) which exempts a corporation from
the restrictions of subsection 45(2) so long as it has given the Commission a
collective bargaining notice describing the conduct and the notice is in force.
Item 3 -- Subsection 46(6)
.6 Subsection 46(6) of the TP Act provides for certain exemptions from
section 46(1) which proscribes misuse of market power by corporations which
have a substantial degree of power in a market. Corporations exempted from
the requirements of subsection 46(1) by subsection 46(6) are those for which an
authorisation is in force or those operating via a notification of exclusive
dealing.
.7 Item 3 expands the exemptions to include a corporation that has given the
Commission a notification of collective bargaining describing the conduct and
for whom the notification is in force.
Item 4 -- Subsection 46A(6)
.8 Section 46A of the TP Act proscribes misuse of market power by those
corporations with a substantial degree of power in a trans-Tasman market.
Subsection 46A(6) outlines those corporations exempted from subsection
46A(1), specifically those corporations for whom an authorisation is in force or
those operating via a notification of exclusive dealing.
.9 Item 4 expands the exemptions to include a corporation that has given the
Commission a notification of collective bargaining describing the conduct and
for whom the notification is in force.
Item 5 -- Before section 93
.10 As a result of the amendments to the TP Act to provide for the collective
bargaining recommendations from the Dawson Review, Division 2 of Part VII
of the TP Act which deals with notifications is expanded. Item 5 inserts the
label:
56 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
Subdivision A -- Exclusive dealing
before section 93 to indicate that the notification provisions in section 93 relate
to exclusive dealing.
Item 6 -- After section 93
.11 Item 6 makes a consequential amendment to the exclusive dealing
provisions, for purposes of consistency.
Item 7 -- After subsection 93(1)
.12 This is a consequential amendment to the exclusive dealing provisions for
purposes of consistency and provides that to be valid a notice under subsection
93(1) must be:
2 in a form prescribed by the regulations and contain the information
required by the form; and
3 accompanied by any other information or documents prescribed by the
regulations; and
4 accompanied by the fee (if any) prescribed by the regulations.
Item 8 -- After subsection 93(2A)
.1 This is a consequential amendment to the exclusive dealing provisions for
purposes of consistency and provides that, if the Commission receives a
purported exclusive dealing notice that it considers is not valid, it must give the
applicant a written notice within five business days:
5 stating that the person has not given a valid notice; and
6 providing reasons why the purported notice does not comply with the
Division.
.1 A business day is a Monday to Friday inclusive, not including a public
holiday in the Australian Capital Territory.
Trade Practices Legislation Amendment Bill (No. 1) 2005 57
Schedule 3 -- Collective bargaining
Item 9 -- After section 93
.2 Item 9 makes provision for collective bargaining to be included in the
division on notifications and outlines the process by which notification of
collective bargaining will operate.
.3 Prior to the Dawson Review, sections 88 and 90 of the TP Act allowed the
Commission to authorise collective bargaining where it was satisfied that the
public benefit would outweigh any lessening of competition that would result.
However, the process of obtaining authorisation was considered to be expensive
and time consuming. The Dawson Review recommended that, as an alternative
to authorisation (which would still be an available option for small business), a
notification process should be introduced for collective bargaining proposals.
The significance of the proposed change is that, under the authorisation process,
the applicant was required to establish that there would be a net public benefit
from the proposed collective bargaining arrangement. Under the new
notification process, however, the onus is on the Commission to satisfy itself
that there is no net public benefit.
.4 Part VII of the TP Act deals with authorisations and notifications and, in
particular, Division 2 addresses notifications. Item 6 inserts a new subdivision
dealing with notification of collective bargaining.
Subdivision B -- Collective bargaining
New section 93AA Definitions
.5 Section 93AA of the TP Act provides definitions for the terms collective
bargaining notice, conference notice, contract and objection notice.
New section 93AB Notification of collective bargaining
.6 Section 93AB then deals with the procedure by which, and the limits within
which, corporations are entitled to obtain statutory protection in relation to
collective bargaining conduct which may otherwise breach section 45 of the TP
Act.
Notice to Commission
.7 In particular, subsection 93AB(1) provides that a corporation that has acted
or proposed to act in the manner prescribed in subsection 45(2) may file a
notice with the Commission setting out the full particulars of the conduct.
58 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
.8 However, three additional requirements must be satisfied and are outlined in
this section of the TP Act. These requirements restrict the collective bargaining
process to small business in negotiation with big business where experience has
shown that collective bargaining may do little or no harm to the competitive
process and may generate public benefit. The first two restrictions outline the
behaviour of the small businesses, the contracting parties, both between
themselves and with a third party, the target, while the third requirement uses a
transaction value approach to provide a definition of small business for the
purposes of this section of the TP Act.
First -- making of initial contract
.9 First, subsection 93AB(2) prescribes the behaviour of the contracting
parties with each other. Specifically, an initial contract must be proposed or
made between two or more corporations (the contracting parties) planning to
collectively bargain about goods or services supplied to or acquired from a third
party (the target).
Second -- making of contracts with target
.10 Second, subsection 93AB(3) prescribes the behaviour of the contracting
parties with the target. In particular, the contracting parties must reasonably
expect that they will make at least one contract with the target in regard to
selling or acquiring at least one of the goods or services.
Third -- price of contracts with target
.11 Third, subsection 93AB(4) aims to ensure that the notification process for
collective bargaining assists small businesses in situations in which they face an
imbalance of market power. The Dawson Review considered that a transaction
value approach to defining small business was simpler and less intrusive than
using the features of the business (e.g., turnover, employee numbers or
ownership structure) to provide a definition of small business. This subsection
prescribes that each individual corporation (that is, each member of the
collective bargaining arrangement) must reasonably expect that the total value
of the transactions that it will conduct with the target in any 12 month period in
regard to the goods and services specified in subsections 93AB(3) and (4) will
not exceed $3 million or another amount prescribed by regulations. The
regulations may vary according to industry.
Timing of reasonable expectation
.12 Subsection 93AB(5) outlines the timing requirements of reasonable
expectation. Specifically, it requires that, at the time of giving the collective
Trade Practices Legislation Amendment Bill (No. 1) 2005 59
Schedule 3 -- Collective bargaining
bargaining notice and, if the initial contract has been made, at the time that it
was made, each individual corporation to the collective bargaining arrangement
must have reasonably expected to make at least one contract with the target
about the specified goods or services and have reasonably expected that the
total value of all its contracts with the target in regard to those goods and
services in any 12 month period would not exceed $3 million (or the prescribed
amount).
Form of notice etc.
.13 Subsection 93AB(6) provides that to be valid a collective bargaining notice
must be:
7 in a form prescribed by the regulations and contain the information
required in the form; and
8 accompanied by any other information or documents prescribed by the
regulations; and
9 accompanied by the fee (if any) prescribed by the regulations.
Notice given by, or on behalf of, contracting persons
.1 Subsection 93AB(7) provides for third parties to make a collective
bargaining notification on behalf of a group of small businesses. This might be
relevant, for example, to rural producers who may wish to bargain through the
structure provided by a single industry body. The Dawson Review concluded
that this provision would increase the utility of a collective bargaining
notification process. However such a notice may only be given if the individual
parties to the collective bargaining arrangement could have given the notice on
their own behalf. This limits the collective bargaining arrangements to
corporations who wish to collectively bargain with one company. If parties
wish to seek immunity for a variety of similar arrangements with a variety of
targets, the authorisation process with its longer time frame is the appropriate
process.
When a notice may not be given
.2 Subsection 93AB(8) outlines the conditions under which a collective
bargaining notice may not be given. Specifically, a collective bargaining notice
in relation to a contract or proposed contract may not be given if the
corporation has applied for an authorisation in relation to the same contract or
proposed contract, and a determination has been made dismissing the
60 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
application, and if the review period has ended with either a determination by
the Tribunal or no application for review.
Notice is invalid if given by union etc. on behalf of the corporation
.3 Subsection 93AB(9) provides that a purported collective bargaining notice
is not a valid notice if it is given, on behalf of the corporation, by a trade union,
an officer of a trade union or a person acting on the direction of a trade union.
Invalid collective bargaining notice
.4 Subsection 93AB(10) provides that, if the Commission receives a purported
collective bargaining notice that it considers is invalid, it must within 5 business
days of receiving the purported notice provide written notice to the applicant
that the notice is not valid and provide reasons for that lack of validity under
this Division.
Definition
.5 Business day means Monday to Friday inclusive, excluding a public
holiday in the Australian Capital Territory.
.6 Trade union has the same meaning as that in subsection 4(1) of the
Workplace Relations Act 1996.
New section 93AC Commission's objection notice
.7 Section 93AC of the TP Act deals with the Commission's objection notice
and covers two types of provisions. The first provision (subsection 93AC(1))
relates to exclusionary conduct as proscribed in subparagraphs 45(2)(a)(i) and
(b)(i) of the TP Act and to price fixing conduct as proscribed in subsection
45A(1) of the TP Act. The second (section 93AC(2)) relates to the substantial
lessening of competition as outlined in subparagraphs 45(2)(a)(ii) and (b)(ii) of
the TP Act.
.8 Subject to the tests and procedural requirements of section 93AC being met,
an objection notice may be given by the Commission at any time (see
explanatory material for section 93AD for details on timing).
Commission's objection notice -- per se provisions
.9 Subsection 93AC(1) relates to a contract, or proposed contract, which
contains an exclusionary provision (of the kind referred to in subparagraph
45(2)(a)(i) or (b)(i)) or contains a price fixing provision. In either case,
subsection 93AC(1) provides that if the Commission is satisfied that the actual
Trade Practices Legislation Amendment Bill (No. 1) 2005 61
Schedule 3 -- Collective bargaining
or likely benefit to the public from the provision will not outweigh the actual or
likely detriment to the public from the provision, it may give the corporation a
written notice (an objection notice) making that statement.
.10 In the context of the TP Act, public benefit has been interpreted to mean
anything of value to the community generally, any contribution to the aims
pursued by the society including as one of its principal elements (in the context
of trade practices legislation), the achievement of economic goals of efficiency
(encompassing allocative efficiency, production efficiency and dynamic
efficiency) and progress.
.11 Public detriment has been interpreted as any impairment to the community
generally, any harm or damage to the aims pursued by the society including as
one of its principal elements the achievement of the goal of economic
efficiency. This includes any public detriment arising from a lessening of
competition. In considering the range of detriments, the Commission will
consider the harm that might result from efforts to reduce the competitiveness
of an industry by coordinating arrangements that apply to employees and those
that apply to small business corporations or independent contractors who might
also provide services in that industry.
.12 The Commission will weigh any public benefit against the public detriment
to determine whether a net public benefit exists.
Commission's objection notice --competition provisions
.13 Subsection 93AC(2) relates to a contract or proposed contract containing a
provision of the kind referred to in subparagraph 45(2)(a)(ii) or (b)(ii) (other
than a price fixing provision). It further relates to instances in which the
Commission is satisfied that the provision has the purpose, or actual or likely
effect, of substantially lessening competition (within the meaning of section
45). If the Commission is so satisfied and is also satisfied that there is no actual
or likely benefit to the public from the provision or that the actual or likely
benefit to the public from the provision will not outweigh the actual or likely
detriment to the public constituted by any lessening of competition, it may give
the corporation a written objection notice making that statement.
.14 In the context of the TP Act, public benefit has been interpreted to mean
anything of value to the community generally, any contribution to the aims
pursued by the society including as one of its principal elements (in the context
of trade practices legislation), the achievement of economic goals of efficiency
(encompassing allocative efficiency, production efficiency and dynamic
efficiency) and progress.
62 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
.15 Public detriment constituted by a lessening of competition has been
interpreted as any impairment to the community generally, any harm or damage
to the aims pursued by the society including as one of its principal elements the
achievement of the goal of economic efficiency. In considering the range of
detriments, the Commission will consider the harm that might result from
efforts to reduce the competitiveness of an industry by coordinating
arrangements that apply to employees and those that apply to small business
corporations or independent contractors who might also provide services in that
industry.
.16 The Commission will weigh any public benefit against the public detriment
to determine whether a net public benefit exists.
Reasons for objection notice
.17 Subsection 93AC(3) of the TP Act states that the Commission must give a
written statement of its reasons for objecting at the time of giving the objection
notice.
Conference before objection notice
.18 In following the process for deciding whether to give notice in regard to a
notification of collective bargaining, the Commission must also comply with
section 93A which requires that it afford opportunity for a conference before
giving notice (subsection 93AC(4)).
Commission to seek additional information
.19 Subsection 93AC(5) requires that, to assist in deciding whether or not to
give an objection notice, the Commission must seek such relevant information
as it considers reasonable and appropriate. Further, it requires the Commission
to make its decision on the basis of any information it receives through this
means, any other information given to it by the corporation or any other person
and any other information in its possession.
.20 This subsection is an integral part of the Commission's ability to consider
collective bargaining notices. It requires the Commission to seek any relevant
information it considers reasonable and appropriate and allows it to base its
decision on this (and any other) information. This provision ensures that the
Commission could provide an objection notice where information it sought
under clause 93AC(5)(a) was not provided and it therefore does not have
sufficient information to assess the tests in section 93AC.
Trade Practices Legislation Amendment Bill (No. 1) 2005 63
Schedule 3 -- Collective bargaining
New section 93AD When collective bargaining notice comes into force
and ceases to be in force
.21 Section 93AD outlines the time at which a collective bargaining notice
comes into force and the time at which it ceases to be in force. In
recommending a notification scheme for collective bargaining in addition to the
existing authorisation process, the Dawson Review concluded that such a
notification process should provide a speedier, simpler and less expensive
mechanism. The Dawson Review, therefore, recommended a delay of 14 days
after the date of lodgement of the notification before the notification takes
effect. The Dawson Review maintained that any extension of this period would
impair the speedy and effective nature of the process.
When collective bargaining notice comes into force
.22 Subsection 93AD(1) of the TP Act provides that a collective bargaining
notice comes into force at the end of 14 days or a longer period if prescribed by
regulation, starting on the day the corporation gave the Commission the notice.
However, if the Commission gives a conference notice within the 14-day period
(or other period prescribed in this section) and it then decides not to give an
objection notice, the collective bargaining notice comes into force at the time
the Commission makes that decision.
.23 It is proposed that the period referred to subsection 93AD(1) initially be set
by regulation at 28 days. It is envisaged that this will give the Commission
sufficient time to consider notification applications in the initial stages after the
introduction of the notification scheme, but the time period will be monitored
and reviewed after 12 months with a preference for 14 days.
.24 Subsection 93AD(2) outlines the circumstances in which a collective
bargaining notice does not come into force. Specifically, if the notice is
withdrawn or taken to be withdrawn before the period in subsection 93AD(1)
expires, or if the Commission gives the corporation a conference notice during
that period and then gives the corporation an objection notice, then the
collective bargaining notice does not come into force.
When collective bargaining notice ceases to be in force
.25 Subsection 93AD(3) describes the time at which a collective bargaining
notice which is in force ceases to be in force. A notice can cease to be in force
in one of three different ways and does so at the earliest of those times. First,
the notice may be withdrawn or taken to be withdrawn. The notice ceases to be
in force at the time of withdrawal. Second, the Commission may give the
corporation an objection notice. This can occur at any time, including after the
64 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
period referred to in paragraph 93AD(1)(a) expires and the notice takes effect.
If this is the case then the collective bargaining notice ceases to be in force on
the 31st day after the relevant day or on a later day specified in writing by the
Commission. (The relevant day varies depending on whether an application is
made to the Tribunal for a review of the Commission's decision to give the
objection notice.) Third, the notice may expire. In this case the notice ceases
to be in force at the end of the period of three years, beginning on the day that
the corporation gave the Commission a collective bargaining notice.
Relevant day
.26 The relevant day in subsection 93AD(3) is worked out in accordance with
the table in subsection 93AD(4). If an application for review of the
Commission's objection notice is not made to the Tribunal then the relevant
day is the day the Commission gave the objection notice. If an application is
made for a review of the Commission's objection notice, the relevant day could
be one of three different possibilities. In the simplest cases, either the
application for review of the objection notice is withdrawn -- in which case the
relevant day is the day of the withdrawal -- or the Tribunal makes a
determination -- in which case the relevant day is the day on which the
determination is made. If, however, on application by a relevant party the
Tribunal declares that the applicant is not proceeding with the review
application with due diligence, then the relevant day is the day of that
declaration.
New section 93AE Withdrawal of collective bargaining notice
.27 Section 93AE deals with withdrawal of a collective bargaining notice.
Withdrawal by corporation
.28 Subsection 93AE(1) and (2) discuss withdrawal of a collective bargaining
notice by the corporation that gave the notice. Specifically, a corporation may
withdraw a collective bargaining notice at any time before the Commission
gives it an objection notice in relation to the collective bargaining notice. That
is, the corporation may withdraw its notice at any time, either during the period
referred to in paragraph 93AD(1)(a), or during the period that the notice is in
force. Written notice requesting the withdrawal must be provided to the
Commission.
Deemed withdrawal
.29 The collective bargaining notice can also be deemed to have been
withdrawn and this is described in subsection 93AE(3). Such a situation can
Trade Practices Legislation Amendment Bill (No. 1) 2005 65
Schedule 3 -- Collective bargaining
arise if, before or after a corporation gives a collective bargaining notice in
relation to a contract or proposed contract, the corporation applies to the
Commission for an authorisation for that contract or proposed contract and the
Commission makes a determination of any kind and the time for making an
application for review ends with either a determination made by the Tribunal or
no application for review made. In this case, the collective bargaining notice is
taken to be withdrawn.
New section 93AF Only 1 collective bargaining notice may be given
.30 Section 93AF restricts corporations to submitting only one collective
bargaining notice in relation to specific conduct. Consequently, if a corporation
gives the Commission a collective bargaining notice in relation to a specific
contract or proposed contract and the Commission gives the corporation an
objection notice in relation to the contract or proposed contract or the collective
bargaining notice is taken to be withdrawn (under subsection 93AE(3)) then the
corporation may not give the Commission a further collective bargaining notice
in relation to the same contract or proposed contract or in relation to a contract
or proposed contract to the like effect.
.31 Section 93AF does, however, allow for more than one collective bargaining
notice to be given in situations in which a notice is given and consequently
withdrawn by the corporation which gave the notice. This will allow
corporations to withdraw their notice and make amendments on the basis of
discussion with, or advice from, the Commission. This would be of particular
use to corporations that are informally advised by the Commission that their
notice is likely to be objected to.
Item 10 -- Before section 93A
.32 Item 10 inserts the label:
Subdivision C -- Conferences
before section 93A to indicate that the provisions in section 93A relate to the
process the Commission must undertake before giving an objection notice.
Item 11 -- Subsection 93A(1)
.33 Item 11 expands subsection 93A(1) of the TP Act (which formerly applied
only to notification in relation to exclusive dealing) to prescribe that, before
giving notice in relation to collective bargaining conduct or proposed conduct,
66 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
the Commission must prepare a draft notice in relation to that conduct or
proposed conduct.
Item 12 -- Subsections 93A(3), (4) and (10A)
.34 Item 12 further alters section 93A of the TP Act to include collective
bargaining.
.35 Subsection 93A(3) requires the Commission, upon invitation to interested
parties to attend a conference, to provide a copy of the draft notice and a
summary of reasons why it proposes to give the notice.
.36 Subsection 93A(4) prescribes that, if no conference is required (either
because the Commission was notified in writing that no conference was
required or because it was not notified that a conference was required within the
specified time period), then the Commission must decide whether to give a
notice about the collective bargaining conduct or proposed conduct.
.37 Subsection 93A(10A) prescribes that, if a conference is held, then after the
conference the Commission must decide whether or not to give a notice about
the collective bargaining conduct or proposed conduct.
Item 13 -- Subsection 93A(12)
.38 Item 13 enables the Commission, where it believes two or more collective
bargaining notices have been given by the same or a related person which
describe essentially the same or similar conduct, to treat the notices as one
single notice and prepare one draft notice and hold one conference in relation to
that draft notice.
Item 14 -- Before section 95
.39 Item 14 inserts the label:
Subdivision D -- Register of notifications
before section 95 to indicate that the provisions in section 95 relate to the
Commission's procedures for maintaining a register of notifications.
Trade Practices Legislation Amendment Bill (No. 1) 2005 67
Schedule 3 -- Collective bargaining
Item 15 -- Paragraph 95(1)(c)
.40 Item 15 expands paragraph 95(1)(c) to prescribe that the Commission must
maintain a register of collective bargaining notices given to it (including notices
that have been withdrawn).
Item 16 -- Paragraph 95(1)(f)
.41 Item 16 expands paragraph 95(1)(f) to prescribe that the Commission must
maintain a register of the particulars of any notices that the Commission gives
in relation to notification of collective bargaining.
Item 17 -- Before paragraph 95(1)(h)
.42 Item 17 inserts new paragraph 95(1)(gb) to prescribe that the Commission
must maintain a register with details of the date on which a collective
bargaining notice ceases to be in force when the Commission gives a
corporation an objection notice to take effect from a specified (written) date.
Item 18 -- Paragraph 95(2)(a)
.43 Item 18 provides that either part or all of a document in relation to a
collective bargaining notice or any oral submission to the Commission in
relation to that notice may be excluded from the public register on request of
the person due to the confidential nature of the contents.
Item 19 -- Section 101A
.44 Item 19 extends section 101A of the TP Act to allow that a person who is
dissatisfied with a notice given by the Commission (under subsection 93AC(1)
or (2)) in relation to a proposed collective bargaining arrangement may apply to
the Tribunal for a review of the giving of the notice.
Item 20 -- After subsection 102(5)
.45 Item 20 inserts new subsections 102(5AA), (5AB) and (5AC) which
describe the functions and powers of the Tribunal to review the giving of a
collective bargaining notice by the Commission and make a determination
which either upholds it or sets it aside. In the making of such a determination,
the Tribunal is required to use the same tests as the Commission used to make
its decision.
68 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
.46 Subsection 102(5AA) relates to the review of an objection notice given by
the Commission in relation to contracts involving per se provisions (that is,
exclusionary or price fixing provisions). It provides for the Tribunal to set
aside the Commission's objection notice if it is satisfied that the actual or likely
benefit to the public from the provision outweighs or would outweigh the actual
or likely detriment to the public from the provision, or to affirm the notice if it
is not so satisfied. The onus is on the person who applies for the review to
satisfy the Tribunal that the Commission's notice should be set aside.
.47 Subsection 102(5AB) relates to the review of an objection notice given by
the Commission in relation to contracts involving competition provisions (that
is, provisions other than exclusionary or price fixing provisions). The Tribunal
is able to set aside the Commission's objection notice if it is satisfied that the
provision does not and would not have the purpose, or actual or likely effect, of
substantially lessening competition (within the meaning of section 45) or if it is
satisfied that the actual or likely benefit to the public from the provision
outweighs or would outweigh the actual or likely detriment to the public
constituted by any lessening of competition, or to affirm the notice if it is not so
satisfied. The onus is on the person who applies for the review to satisfy the
Tribunal that the Commission's notice should be set aside.
.48 Subsection 102(5AC) describes the procedures if the Tribunal sets aside an
objection notice given by the Commission under subsection 93AC(1) or (2).
Specifically, if the Commission gave the notice following a conference notice
issued during the waiting period, then the Commission is deemed not to have
given an objection notice and the collective bargaining arrangement comes into
force on the day the objection notice is set aside by the Tribunal.
Item 21 -- Subsection 109(1A)
.49 Item 21 extends subsection 109(1A) to provide that a person to whom an
objection notice was given by the Commission (either in regard to per se
provisions or competition provisions) is entitled to participate in any
proceedings before the Tribunal instituted by another person in relation to that
notice. This is of particular importance for a notification of collective
bargaining since there will be at least two and possibly many parties (the
contracting parties) for whom the objection notice will be relevant.
Item 22 -- Paragraph 151AJ(7)(b)
.50 Section 151AJ of the TP Act describes the circumstances in which a carrier
or a carriage service provider is said to engage in anti-competitive conduct.
Specifically, item 22 amends the section to prescribe that a carrier or carriage
Trade Practices Legislation Amendment Bill (No. 1) 2005 69
Schedule 3 -- Collective bargaining
service provider is not deemed to be engaging in anti-competitive conduct if a
collective bargaining notice is in force which covers the relevant conduct.
Item 23 -- Paragraph 151AY(1)(b)
.51 Item 23 extends paragraph 151AY(1)(b) of the TP Act to include
circumstances where an application for an exemption order under Part XIB of
the TP Act and a notice of collective bargaining under subsection 93AB(1)
which relate to the same conduct, have been received by the Commission.
Item 24 -- Paragraph 151AY(2)(c)
.52 Section 151AY is expanded to allow the Commission to refuse to consider
an application for an exemption order under Part XIB of the TP Act or to refuse
to convene a conference to discuss the application for an exemption order until
the Commission decides whether or not to give an objection notice under
subsection 93AC(1) or (2) in regard to a collective bargaining notice.
Item 25 -- Subsection 155(1)
.53 Section 155 of the TP Act outlines the Commission's power to obtain
information, documents and evidence. Specifically, Item 25 alters this section
to ensure that the Commission has the same powers in making a decision in
regard to a notification of collective bargaining as it does in relation to making
a decision in regard to notification of exclusive dealing.
Item 26 -- After subsection 45(8) of the Schedule
.54 Item 26 insets new subsection 45(8A) of the Schedule to provide immunity
for a person engaging in exclusionary conduct or conduct which has the actual
or likely purpose or effect of substantially lessening competition (as described
in subsection 45(2) of the Schedule) if the person has given the Commission a
collective bargaining notice under subsection 93AB(1) describing the conduct
and the notice is in force under section 93AD.
Item 27 -- Subsection 46(6) of the Schedule
.55 Item 27 amends subsection 46(6) of the Schedule to ensure that a notified
arrangement will not contravene section 46 (Misuse of market power) if the
arrangement has been authorised or a valid notification is in place.
70 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 3 -- Collective bargaining
Item 28 -- Application
.56 Item 28 states that only contracts or arrangements made, or understandings
arrived at, after the commencement of this Schedule are affected by the
amendments within the Schedule.
Item 29 -- Saving
.57 Regulations made pursuant and notices given according to section 93(1) of
the TP Act in force immediately prior to the commencement of Schedule 3,
have effect after that commencement as if they had been made for the purposes
of new subsection 93(1A).
Trade Practices Legislation Amendment Bill (No. 1) 2005 71
Schedule 4 -- Exclusionary provisions
Trade Practices Act 1974
.1 Schedule 4 contains two items to provide for a defence to proceedings
relating to exclusionary provisions, proscribed by subparagraphs 45(2)(a)(i) and
(2)(b)(i) of the TP Act. The amendments in this Schedule reflect the
Government's reconsideration of recommendations 8.1 and 8.2 of the Dawson
Review.
.2 The Dawson Review found that the per se prohibition of exclusionary
provisions (that is, the outright prohibition of such provisions without regard to
the impact on competition) was unnecessarily broad as it extended to
co-operative contracts, arrangements or understandings that are unlikely to be
anti-competitive and may be either socially beneficial or pro-competitive.
Recommendation 8.2 was thus designed to narrow the prohibition.
.3 However, in light of the August 2003 High Court decision in News Limited
v South Sydney District Rugby League Football Club Limited [2003] HCA 45
-- which took a more restrictive approach to the per se prohibition -- the
Government now considers it is unnecessary to implement
recommendation 8.2.
.4 Recommendation 8.1 of the Dawson Review proposed that the TP Act be
amended so that it is a defence in proceedings based upon the prohibition of an
exclusionary provision to prove that the exclusionary provision did not have the
purpose, effect or likely effect of substantially lessening competition.
.5 The Government now considers that the recommended defence would be
too broad as it would prevent unambiguously anti-competitive conduct from
being prohibited per se in appropriate cases. The defence has therefore been
restricted so that it only applies where the exclusionary provision is for the
purposes of a joint venture (as defined in section 4J) and does not substantially
lessen competition. This change also has the benefit of providing a consistent
defence for joint ventures to the per se prohibition of exclusionary provisions
and price fixing provisions.
72 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 4 -- Exclusionary provisions
Item 1 -- After section 76B
New section 76C Defence to proceedings relating to exclusionary
provisions
.6 Item 1 inserts a new section 76C that provides a defence to proceedings
against a person in relation to an alleged contravention of subparagraphs
45(2)(a)(i) or (b)(i) in respect of an exclusionary provision. The defence is
available in all proceedings pursuant to a provision in Part VI or section 163A
of the TP Act and declaration proceedings under sections 21 and 23 of the
Federal Court of Australia Act 1976 and section 39B of the Judiciary Act 1903.
Defence
.7 It is a defence if the person establishes on the balance of probabilities that
the provision is for the purposes of a joint venture and that it does not have the
purpose, and does not have and is not likely to have the effect, of substantially
lessening competition. Placing the burden of proof upon the respondent or
defendant is justified by the prima facie illegality and undesirability of
exclusionary provisions.
Joint venture
.8 Section 4J defines a joint venture to be `an activity in trade or
commerce...carried on jointly by two or more persons' or `an activity in trade
or commerce...carried on by a body corporate formed by two or more persons
for the purpose of enabling those persons to carry on that activity jointly'.
Satisfying this requirement will ordinarily require the parties to provide
evidence that the activity in question is separable from the activities they are
individually engaged in and evidence of each party's contribution to that
activity, for example, the capital or skill.
.9 If the only activity being carried on jointly by the parties is the activity of
making, or giving effect to, a contract, arrangement or understanding containing
an exclusionary provision or other illegal provision, then the provision in
question cannot be for the purposes of a joint venture.
.10 Joint ventures that may satisfy the requirements of section 4J include joint
ventures directed to research and development, the production of goods, the
supply of services and marketing. The section 4J definition of joint ventures
will also encompass other arrangements, for example, the enforcement by clubs
of the rules of a professional sporting competition.
Trade Practices Legislation Amendment Bill (No. 1) 2005 73
Schedule 4 -- Exclusionary provisions
Substantially lessening competition
.11 Once a provision is assessed as being for the purposes of a joint venture,
the assessment of whether that provision has the purpose, effect or likely effect
of substantially lessening competition is to be consistent with the assessment
made under subparagraphs 45(2)(a)(ii) and (b)(ii) of the TP Act.
Item 2 -- Application
.12 Item 2 specifies that the defence is to apply in relation to proceedings
instituted after the commencement of the Schedule, irrespective of when the
contract, arrangement or understanding was made or given effect to.
.13 Thus, the defence may apply to contracts, arrangements or understandings
made prior to the commencement of the Schedule. Although potentially
retrospective, the application provision is considered appropriate because the
amendment introduces a defence that is of potential benefit to persons who are
alleged to have made or given effect to a contract, arrangement or
understanding that contains an exclusionary provision.
74 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 5 -- Price fixing provisions
Trade Practices Act 1974
.14 Schedule 5 contains four items to provide for a defence to proceedings
relating to price fixing. Price fixing provisions are deemed, by
subsection 45A(1), to be a contravention of subparagraphs 45(2)(a)(ii) and
(2)(b)(ii) of the TP Act.
.15 The amendments in this Schedule implement recommendation 9.1 of the
Dawson Review.
Item 1 -- Subsection 45A(2)
.16 This item repeals subsection 45A(2) in Part IV which provides an
exemption to section 45A(1) for a limited range of joint ventures. This
exemption was found by the Dawson Review to be too narrow for some
pro-competitive joint ventures.
Item 2 -- Before section 77
New section 76D Defence to proceedings relating to price fixing
provisions
.17 Item 2 inserts a new section 76D that provides a defence to proceedings
against a person in relation to an alleged contravention of subparagraphs
45(2)(a)(ii) or (b)(ii) in relation to a price fixing provision. The defence is
available in all proceedings pursuant to a provision in Part VI or section 163A
of the TP Act and declaration proceedings under sections 21 and 23 of the
Federal Court of Australia Act 1976 and section 39B of the Judiciary Act 1903.
Defence
.18 It is a defence if the person establishes on the balance of probabilities that
the provision is for the purposes of a joint venture and that it does not have the
purpose, and does not have and is not likely to have the effect, of substantially
lessening competition. Placing the burden of proof upon the respondent or
defendant is justified by the prima facie illegality and undesirability of price
fixing provisions.
Trade Practices Legislation Amendment Bill (No. 1) 2005 75
Schedule 5 -- Price fixing provisions
Joint venture
.19 Section 4J defines a joint venture to be `an activity in trade or
commerce...carried on jointly by two or more persons' or `an activity in trade
or commerce...carried on by a body corporate formed by two or more persons
for the purpose of enabling those persons to carry on that activity jointly'.
Satisfying this requirement will ordinarily require the parties to provide
evidence that the activity in question is separable from the activities they are
individually engaged in and evidence of each party's contribution to that
activity, for example, the capital or skill.
.20 If the only activity being carried on jointly by the parties is the activity of
making, or giving effect to, a contract, arrangement or understanding containing
a price fixing provision or other illegal provision, then the provision in question
cannot be for the purposes of a joint venture.
.21 Joint ventures that may satisfy the requirements of section 4J include joint
ventures directed to research and development, the production of goods, the
supply of services and marketing. The section 4J definition of joint ventures
will also encompass other arrangements, for example, the enforcement by clubs
of the rules of a professional sporting competition.
Substantially lessening competition
.22 Once a provision is assessed as being for the purposes of a joint venture,
the assessment of whether that provision has the purpose, effect or likely effect
of substantially lessening competition is to be consistent with the assessment
made under subparagraphs 45(2)(a)(ii) and (b)(ii) of the TP Act.
Item 3 -- Subsection 45A(2) of the Schedule
.23 This item repeals subsection 45A(2) in Schedule 1 which provides an
exemption to section 45A(1) for a limited range of joint ventures. This is a
consequential amendment flowing from Item 1.
Item 4 -- Application
.24 Item 4 specifies that the new defence is to apply in relation to all
proceedings instituted after the commencement of the Schedule, irrespective of
when the contract, arrangement or understanding was made or given effect to.
.25 Item 4 also specifies that the subsection 45A(2) exemption for a restricted
range of joint ventures is no longer to apply, regardless of whether the relevant
76 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 5 -- Price fixing provisions
contract or arrangements was made, or the understanding arrived at, before or
after the commencement of the Schedule. The repeal of the joint venture
exemption may therefore have a retrospective effect in some cases.
.26 These complementary application provisions ensure, on the one hand, that
all defendants or respondents who are parties to proceeding instituted after the
commencement of the Schedule can potentially take advantage of the joint
venture defence. On the other hand, plaintiffs or applicants are provided with
certainty because no defendant or respondent who is a party to a proceeding
instituted after the commencement of the Schedule will be able to claim that the
current subsection 45A(2) exemption applies.
Trade Practices Legislation Amendment Bill (No. 1) 2005 77
Schedule 6 -- Dual listed companies
Trade Practices Act 1974
.1 Recommendation 9.3 of the Dawson Review stated that the TP Act should
be amended to allow intra-party transactions in a dual listed company to be
treated on the same basis as related party transactions within a group of
companies and that the aggregate size of the dual listed company should be
recognised for the purposes of assessing market power. In addition this
Schedule amends the TP Act to prohibit the forming of a dual listed company
where it would substantially lessen competition in a market and provides a
mechanism whereby authorisation may be able to be sought for this conduct.
Item 1 -- Subsection 4(1)
.2 This item inserts a definition of dual listed company arrangement. It
provides that dual listed company arrangement has the same meaning as in
section 125-60 of the Income Tax Assessment Act 1997.
Item 2 -- After subsection 4A(5)
.3 This item inserts a new subsection 4A(5A) into the TP Act. The new
section makes it clear that dual listed companies are treated as corporate groups
for the purposes of Part IV, Part VI and Part VII. This reflects the fact that it is
only these areas of the TP Act that are relevant to the making of dual listed
companies.
Item 3 -- Paragraph 6(2)(h)
.4 This is a consequential amendment to include reference to new section 49 in
paragraph 6(2)(h).
Item 4 -- After subsection 45(6)
.5 This item inserts a new subsection 45(6A) into the TP Act. This new
subsection governs the potential overlap between section 45 and the new
section 49. The effect of this section is that dual listed company arrangements
will be regulated only by the new section 49 and not section 45.
78 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 6 -- Dual listed companies
Item 5 -- Subsection 46(6)
.6 This item amends subsection 46(6) of the TP Act to refer to the new section
49. The effect of this amendment is that a dual listed company arrangement
will not contravene section 46 (Misuse of market power) if the dual listed
company arrangement has been authorised or if a valid notification is in force.
Item 6 -- Subsection 46A(6)
.7 This item amends subsection 46A(6) of the TP Act to refer to the new
section 49. The effect of this amendment is that a dual listed company
arrangement will not contravene section 46A (Misuse of market power --
corporation with substantial degree of power in trans-Tasman market) if the
dual listed company arrangement has been authorised or a valid notification is
in force.
Item 7 -- After section 48
New section 49 Dual listed company arrangements that affect
competition
.8 This item inserts a new section 49 prohibiting dual listed companies which
substantially lessen competition.
.9 Subsection 49(1) provides that a corporation must not:
2 make a dual listed company arrangement if a provision of the proposed
arrangement has the purpose, or would have or be likely to have the effect
of substantially lessening competition; or
3 give effect to a provision of a dual listed company arrangement if that
provision has the purpose, or has or is likely to have the effect, of
substantially lessening competition.
.1 A note is inserted at the end of subsection 49(1). This note makes it clear
that conduct that would otherwise contravene section 49 can be authorised
under subsection 88(8B).
Exception
.2 Subsection 49(2) provides an exception to the prohibition contained in
subsection 49(1). Specifically, subsection 49(2) provides that a corporation
does not contravene the section if:
Trade Practices Legislation Amendment Bill (No. 1) 2005 79
Schedule 6 -- Dual listed companies
4 the arrangement is subject to a condition that the provision will not come
into force unless and until the corporation is granted an authorisation to
give effect to the provision; and
5 the corporation applies for the grant of such an authorisation within 14
days after the arrangement is made.
.1 The new subsection 49(2) also makes it clear that a corporation is not
permitted to give effect to such a provision prior to the granting of the
authorisation.
Meaning of competition
.2 Subsections 49(3) and (4) provide the meaning of competition for the
purposes of new section 49 to be:
6 competition in any market in which a party to the dual listed company
arrangement, or any related body corporate, does, or is likely to or would
or would be likely to supply or acquire goods or services apart from the
arrangement;
7 the provisions of all contracts or arrangements of the party to the dual
listed company arrangement.
Item 8 -- After subsection 88(8A)
.1 This item inserts new subsections 88(8B), (8C) and (8D).
.2 Subsection 88(8B) provides that subject to this Part, the Commission may,
upon application by or on behalf of a corporation, grant it an authorisation:
8 to make a dual listed company arrangement; or
9 to give effect to a provision of a dual listed company arrangement.
.1 The new subsection 88(8B) clarifies that, while an authorisation to make a
dual listed company arrangement remains in force, section 49 does not prevent
the corporation from: (i) making the arrangement in accordance with the
authorisation; and (ii) giving effect, in accordance with the authorisation, to any
provision of the arrangement so made.
.2 In addition, while an authorisation remains in force to give effect to a
provision of a dual listed company arrangement, section 49 does not prevent the
80 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 6 -- Dual listed companies
corporation from giving effect to the provision in accordance with the
authorisation.
.3 The new subsection 88(8C) provides that an authorisation granted by the
Commission to a corporation under subsection 88(8B) provides the same
protection to the other corporation named or referred to in the application for
the authorisation as a party to the arrangement or proposed arrangement.
Parties to a dual listed company arrangement are, consequently, not required to
lodge separate authorisation applications.
.4 New subsection 88(8D) provides that, subject to subsection 49(2), the
Commission does not have power to grant an authorisation to a corporation to
make a dual listed company arrangement if the arrangement has been made
before the Commission makes a determination in respect of the application.
.5 This section makes it clear that, subject to the exception provided in
subsection 49(2), authorisation for dual listed company arrangements may not
be sought retrospectively.
Item 9 -- After subsection 90(8)
.6 This item inserts new subsections 90(8A) and (8B). The new subsections
90(8A) and (8B) make it clear that the Commission must not make a
determination authorising the making of or giving effect to a dual listed
company arrangement unless it is satisfied in all the circumstances that the
making of the arrangement would result, or be likely to result, in such a benefit
to the public that the arrangement should be allowed to be made. The new
subsections also make it clear that the meaning of benefit for these purposes is
made by reference to the existing subsection 90(9A).
Item 10 -- Subsection 90(9)
.7 This item makes a consequential amendment to subsection 90(9) of the TP
Act to refer to the amended subsection 90(9A) which outlines the criteria to be
regarded when considering any benefit to the public.
Item 11 -- Subsection 90(9A)
.8 This item makes a consequential amendment to subsection 90(9A) to refer
to the new subsections 90(8A) and 90(8B). This provides criteria for the
Commission to consider in regard to public benefit when assessing whether to
grant an authorisation for a dual listed company arrangement.
Trade Practices Legislation Amendment Bill (No. 1) 2005 81
Schedule 6 -- Dual listed companies
Item 12 -- Subsection 91A(5)
.9 This item makes a consequential amendment to subsection 91A(5) to refer
to the new subsections 90(8A) and 90(8B). As a result, the Commission may
not vary an authorisation for a dual listed company arrangement without
ensuring that there will be no reduction in the benefit to the public as a result of
the variation.
Item 13 -- Subsection 91B(5)
.10 This item makes a consequential amendment to subsection 91B(5) to refer
to the new subsections 90(8A) and 90(8B). Consequently, the Commission
must follow the process prescribed in section 91B when considering the
revocation of an authorisation of a dual listed company arrangement.
Item 14 -- Subsection 91C(7)
.11 This item makes a consequential amendment to subsection 91C(7) to refer
to the new subsections 90(8A) and (8B). Consequently, the Commission must
follow the process prescribed in section 91C when considering revoking an
authorisation of a dual listed company arrangement and substituting another
authorisation.
Item 15 -- Subsection 101(1A)
.12 This item amends subsection 101(1A) to refer to the new subsections
90(8A) and (8B). This item extends the Tribunal's review powers to include
determinations in regard to dual listed company arrangement authorisations.
Item 16 -- Subsection 101(2)
.13 This item amends subsection 101(2) to refer to the new subsections 90(8A)
and (8B). Consequently, the Tribunal is conferred the same powers and
obligations in regard to the review of a determination as the Commission in
regard to the making of that determination.
Item 17 -- After subsection 45(6) of the Schedule
.14 This item inserts a new subsection 45(6A) into the Schedule of the TP Act.
This new subsection governs the potential overlap between section 45 in the
Schedule and the new section 49 in the Schedule. The effect of this section is
82 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 6 -- Dual listed companies
that dual listed company arrangements will be regulated only by the new
section 49 of the Schedule and not section 45 of the Schedule.
Item 18 -- Subsection 46(6) of the Schedule
.15 This item amends subsection 46(6) of the Schedule to refer to the new
section 49 of the Schedule.
Item 19 -- After section 48 of the Schedule
New section 49 Dual listed company arrangements that affect
competition
.16 This item inserts a new section 49 prohibiting dual listed companies which
substantially lessen competition in the Schedule of the TP Act.
.17 Subsection 49(1) provides that a person (including a corporation) must not:
10 make a dual listed company arrangement if a provision of the proposed
arrangement has the purpose, or would have or be likely to have the effect
of substantially lessening competition; or
11 give effect to a provision of a dual listed company arrangement if that
provision has the purpose, or has or is likely to have the effect, of
substantially lessening competition.
.1 A note is inserted at the end of subsection 49(1). This note makes it clear
that conduct that would otherwise contravene section 49 can be authorised
under subsection 88(8B).
Exception
.2 Subsection 49(2) provides an exception to the prohibition contained in
subsection 49(1). Specifically, subsection 49(2) provides that a person does not
contravene the section if:
12 the arrangement is subject to a condition that the provision will not come
into force unless and until the person is granted an authorisation to give
effect to the provision; and
13 the person applies for the grant of such an authorisation within 14 days
after the arrangement is made.
Trade Practices Legislation Amendment Bill (No. 1) 2005 83
Schedule 6 -- Dual listed companies
.1 The new subsection 49(2) also makes it clear that a person is not permitted
to give effect to such a provision prior to the granting of the authorisation.
Meaning of competition
.2 Subsections 49(3) and (4) provide the meaning of competition for the
purposes of new section 49 to be:
14 competition in any market in which a party to the dual listed company
arrangement, or any related body corporate, does, or is likely to or would
or would be likely to supply or acquire goods or services apart from the
arrangement;
15 the provisions of all contracts or arrangements of the party to the dual
listed company arrangement.
.1 Subsection 49(4) provides that the cumulative effect of all the relevant
provisions of the proposed dual listed company arrangement will be considered
in determining whether or not the dual listed company arrangement will result
in a substantial lessening of competition.
Item 20 -- Application
.2 This item makes it clear that amendments made by items 1, 4, 7, 8, 9 and 19
apply in relation to arrangements made after the commencement of those items.
It also makes it clear that the amendment made by item 2 applies in relation to
conduct engaged in after the commencement of that item.
84 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 7 -- Third line forcing and exclusive
dealing
Part 1 -- Third line forcing subject to a substantial
lessening of competition test
Trade Practices Act 1974
.1 Under section 47 of the TP Act, exclusive dealing is only prohibited if it has
the purpose, or has or is likely to have the effect of substantially lessening
competition. Third line forcing, when a corporation sells goods or services, or
gives a discount, but only on the condition that the purchaser acquires other
goods from a third person, is currently prohibited per se (that is, prohibited
outright) by sections 47(6) and (7) of the TP Act.
.2 The Dawson Review of the competition provisions of the TP Act
considered that third line forcing is often beneficial and pro-competitive, and
recommended that third line forcing should instead be subject to a substantial
lessening of competition test, consistent with other forms of exclusive dealing.
The Commission opposes very few of the hundreds of third line forcing
notifications received annually. The notification process, while relatively cheap
and quick, was found to mostly be an unnecessary imposition in the case of
third line forcing. However, the Dawson Review found that notification should
continue to be available for third line forcing activities that may substantially
lessen competition.
.3 These amendments implement the Dawson recommendation that third line
forcing be subject to a competition test bringing the treatment of third line
forcing into line with that of other forms of exclusive dealing.
Item 1 -- Subsection 8A(6)
.4 This item omits `or (3A)' from subsection 8A(6).
.5 This removes a reference to a subsection that is repealed in item 8 of this
Schedule, aligning the treatment of third line forcing with that of the other
forms of exclusive dealing.
Trade Practices Legislation Amendment Bill (No. 1) 2005 85
Schedule 7 -- Third line forcing and exclusive dealing
Item 2 -- Paragraph 45DD(7)(a)
.6 This item omits `or (3A)' from paragraph 45DD(7)(a).
.7 This removes a reference to a subsection that is repealed in item 8 of this
Schedule, aligning the treatment of third line forcing with that of the other
forms of exclusive dealing.
Item 3 -- Subsection 47(10)
.8 Item 3 omits `or (5) or paragraph (8)(a) or (b) or (9)(a), (b) or (c)' from
subsection 47(10), substituting `, (5), (6), (7), (8) or (9)' to ensure that third line
forcing activities are not prohibited under the TP Act unless such activities have
the purpose or the effect of substantially lessening competition.
.9 This section makes it clear that the per se prohibition of third line forcing
activities is removed.
Item 4 -- Subsection 47(10A)
.10 Item 4 repeals subsection 47(10A), which allows third line forcing
activities to continue provided the corporation had previously provided the
Commission with notification of these activities under section 93 of the TP Act.
.11 This subsection is no longer necessary due to the amendments made in item
3 of this Schedule, which removes the per se prohibition of third line forcing
activities.
Item 5 -- Subsection 90(6)
.12 All types of exclusive dealing are able to be authorised by the Commission.
The general test for authorisation of exclusive dealing is whether or not the
benefit to the public of the activity taking place outweighs the detriment arising
from the substantial lessening of competition arising from the activity. The
current test for third line forcing activity is whether or not the Commission
considers that the activity is of such benefit to the public that it should be
allowed to take place.
.13 Item 5 omits `(other than conduct to which subsection 47(6) or (7) applies)'
from subsection 90(6). This brings the test for authorisation of third line
forcing activity that has been found to substantially lessen competition into line
with that of all other types of exclusive dealing, so that it is necessary to
86 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 7 -- Third line forcing and exclusive dealing
demonstrate that the benefits of the activity to the public outweigh the
detriment to the public of the substantial lessening of competition.
Item 6 -- Subparagraph 90(8)(a)(iii)
.14 Item 6 repeals subparagraph 90(8)(a)(iii), which allows third line forcing
conduct that has been found to substantially lessen competition to be authorised
only where the Commission considers it is of such a benefit to the public that it
should be allowed to take place. This ensures that authorisation for third line
forcing activity will be considered under the same test as other forms of
exclusive dealing.
Item 7 -- Subsection 93(3)
.15 Notification is a procedure available for all types of exclusive dealing.
Notification confers immediate immunity from the prohibition on exclusive
dealing unless and until the Commission gives a notice. In the case of third line
forcing, the notice does not come into effect (that is, provide immunity) until
14 days following lodgement (the proscribed period). The following
amendments bring the ratification procedures for third line forcing into line
with other forms of exclusive dealing.
.16 Item 7 omits `or (5) or paragraph 47(8)(a) or (b) or (9)(a), (b) or (c)' from
subsection 93(3), substituting `, (5), (6), (7), (8) or (9)'. This allows the
Commission to notify a corporation that the corporation's third line forcing
activities are likely to substantially lessen competition and that any public
benefit which may result from these activities is unlikely to outweigh the
detriment to the public caused by the lessening of competition.
.17 This brings the treatment of Commission notices for third line forcing
activities into line with that of other forms of exclusive dealing.
Item 8 -- Subsection 93(3A)
.18 Item 8 repeals subsection 93(3A), which allowed the Commission to give
notice to a corporation that benefits to the public from proposed third line
forcing conduct is unlikely to outweigh the public detriment caused by the
conduct.
.19 This subsection is no longer necessary due to the amendments made in item
7 of this Schedule aligning the treatment of third line forcing with that of the
other forms of exclusive dealing.
Trade Practices Legislation Amendment Bill (No. 1) 2005 87
Schedule 7 -- Third line forcing and exclusive dealing
Item 9 -- Subsections 93(4), (5) and (6)
.20 Item 9 omits `or (3A)' from subsections 93(4), (5) and (6).
.21 This removes a reference to a subsection that is repealed in item 8 of this
Schedule aligning the treatment of third line forcing with that of the other forms
of exclusive dealing.
Item 10 -- Subsections 93(7A), (7B) and (7C)
.22 Item 10 repeals subsections 93(7A), (7B) and (7C), which provide for
when a notification comes into effect for third line forcing activities as per se
prohibited activities.
.23 These subsections are no longer necessary due to the amendments made in
item 3 of this Schedule removing the per se prohibition of third line forcing.
Item 11 -- Subsection 93(9)
.24 Item 11 omits `or (3A)' from subsection 93(9).
.25 This removes a reference to a subsection that is repealed in item 8 of this
Schedule aligning the treatment of third line forcing with that of the other forms
of exclusive dealing.
Item 12 -- Subsection 93(9)
.26 Item 12 omits `or paragraph (7C)(b)' from subsection 93(9).
.27 This removes a reference to a subsection that is repealed in item 10 of this
Schedule removing the differentiation between notification for third line forcing
activities and other types of exclusive dealing.
Item 13 -- Paragraph 93(10)(a)
.28 Item 13 omits `or (3A)' from paragraph 93(10)(a).
.29 This removes a reference to a subsection that is repealed in item 8 of this
Schedule aligning the treatment of third line forcing with that of the other forms
of exclusive dealing.
88 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 7 -- Third line forcing and exclusive dealing
Item 14 -- Subsections 93A(1), (3), (4) and (10A)
.30 Item 14 omits `or (3A)' from subsections 93A(1), (3), (4) and (10A).
.31 This removes a reference to a subsection that is repealed in item 8 of this
Schedule, aligning the treatment of third line forcing with that of the other
forms of exclusive dealing.
Item 15 -- Paragraph 95(1)(ga)
.32 Item 15 repeals paragraph 95(1)(ga), which states that the Commission
shall keep a register containing details of the specification of any day by the
Commission under paragraph 93(7C)(b).
.33 This paragraph is no longer necessary, as subsection 93(7C) was repealed
in item 10 of this Schedule, which removed the differentiation in notification
procedures between third line forcing and other exclusive dealing activity.
Item 16 -- Section 101A
.34 Item 16 omits `or (3A)' from section 101A.
.35 This removes a reference to a subsection that is repealed in item 8 of this
Schedule aligning the treatment of third line forcing with that of the other forms
of exclusive dealing.
.36 The heading to section 101A is also amended to omit a reference to the
same subsection.
Item 17 -- Subsections 102(4)
.37 Subsection 102(4) relates to the review of a notice, given by the
Commission, objecting to exclusive dealing conduct notified under section 93
of the TP Act. It provides that the Tribunal must set aside the Commission's
notice of objection if the Tribunal is satisfied that the exclusive dealing conduct
does not have the purpose, and does not have the effect or likely effect, of
substantially lessening competition (within the meaning of section 45). The
Tribunal must also set aside the Commission's notice of objection if the
Tribunal is satisfied that the exclusive dealing conduct results in a benefit to the
public and that benefit outweighs or would outweigh the detriment to the public
constituted by any lessening of competition.
Trade Practices Legislation Amendment Bill (No. 1) 2005 89
Schedule 7 -- Third line forcing and exclusive dealing
.38 However, the Tribunal must affirm the Commission's notice of objection if
it is not so satisfied.
.39 The person who applies for the review of the Commission's notice of
objection bears the burden of satisfying the Tribunal that the Commission's
notice should be set aside.
Item 18 -- Subsections 102(5A), (5B) and (5C)
.40 Item 18 repeals subsections 102(5A), (5B) and (5C) dealing with Tribunal
processes in relation to Commission notices regarding third line forcing under
subsection 93(3A). Subsection 93(3A) was repealed in item 8 of this Schedule,
aligning the treatment of third line forcing with that of the other forms of
exclusive dealing.
Item 19 -- Subsection 109(1A)
.41 Item 19 omits `or (3A)' from subsection 109(1A).
.42 This removes a reference to a subsection that is repealed in item 8 of this
Schedule aligning the treatment of third line forcing with that of the other forms
of exclusive dealing.
Item 20 -- Subsection 10.18(2)
.43 Part X of the TP Act deals with international liner cargo shipping.
.44 Item 20 repeals subsection 10.18(2) which states that the exemption of
conduct which gives effect to a provision of a registered conference agreement
in relation to an outwards liner cargo shipping service or an inwards liner cargo
shipping service from section 47 does not apply to subsections 47(6) and (7)
(which relate to third line forcing conduct).
.45 This brings the treatment of such conduct insofar as it relates to third line
forcing into line with the other exclusive dealing provisions outlined in section
47.
Item 21 -- Subsection 10.18A(3)
.46 Item 21 repeals subsection 10.18A(3) which states that the exemption of
certain freight rate agreements from section 47 does not apply to subsections
47(6) and (7) (which relate to third line forcing conduct).
90 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 7 -- Third line forcing and exclusive dealing
.47 This brings the treatment of such conduct insofar as it relates to third line
forcing into line with the other exclusive dealing provisions outlined in section
47.
Item 22 -- Subsection 10.20(2)
.48 Item 22 repeals subsection 10.20(2) which states that the exemption of
conduct engaged in by a party to a loyalty agreement in relation to another
party to the agreement so far as the conduct gives effect to a provision of the
agreement in relation to an outwards liner cargo shipping service or an inwards
liner cargo shipping service from section 47 does not apply to subsections 47(6)
and (7) (which relate to third line forcing).
.49 This brings the treatment of such conduct insofar as it relates to third line
forcing into line with the other exclusive dealing provisions outlined in section
47.
Item 23 -- Subsection 10.24(3)
.50 Item 23 repeals subsection 10.24(3) which states that the exemption from
section 47 of certain negotiations outlined in subsections 10.24(1) and (2) do
not apply to subsections 47(6) and (7) (which relate to third line forcing).
.51 This brings the treatment of such conduct insofar as it relates to third line
forcing into line with the other exclusive dealing provisions outlined in section
47.
Item 24 -- Subsection 10.24A(4)
.52 Item 24 repeals subsection 10.24A(4) which states that the exemption from
section 47 of certain negotiations, conduct or dealings relating to stevedoring
contracts outlined in subsections 10.24A(1), (2) and (3) do not apply to
subsections 47(6) and (7) (which relate to third line forcing).
.53 This brings the treatment of such activities insofar as they relate to third
line forcing into line with the other exclusive dealing provisions outlined in
section 47.
Item 25 -- Paragraph 151AY(2)(c)
.54 Part XIB relates to the telecommunications industry.
Trade Practices Legislation Amendment Bill (No. 1) 2005 91
Schedule 7 -- Third line forcing and exclusive dealing
.55 Item 25 omits `or (3A)' from paragraph 151AY(2)(c) which allows the
Commission to refuse an application for an exemption order or to convene a
conference in relation to an exemption order under Part XIB if it relates to the
same conduct as an exclusive dealing notification.
.56 This removes a reference to a subsection that is repealed in item 8 of this
Schedule aligning the treatment of third line forcing with that of the other forms
of exclusive dealing.
Item 26 -- Subsection 155(1)
.57 Section 155 deals with power to obtain information, documents and
evidence.
.58 Item 26 omits `or (3A)' from subsection 155(1).
.59 This removes a reference to a subsection that is repealed in item 8 of this
Schedule aligning the treatment of third line forcing with that of the other forms
of exclusive dealing.
Item 27 -- Subsection 47(10) of the Schedule
.60 Item 27 omits `or (5) or paragraph (8)(a) or (b) or (9)(a), (b) or (c)' from
subsection 47(10) of the Schedule, substituting `, (5), (6), (7), (8) or (9)'. This
will ensure that third line forcing activities undertaken by a person (including a
corporation) are not prohibited under the TP Act unless such activities have the
purpose or the effect of substantially lessening competition.
.61 This brings the treatment of third line forcing activities into line with that
of other forms of exclusive dealing outlined in section 47, and removes the per
se prohibition of third line forcing activities for persons (including
corporations). This is in line with the amendments to subsection 47(10) of the
TP Act made in item 3 of this Schedule.
Item 28 -- Subsection 47(10A) of the Schedule
.62 Item 28 repeals subsection 47(10A) of the Schedule, which allows third
line forcing activities conducted by a person (including a corporation) to
continue provided the individual had previously provided the Commission with
notification under section 93 of the TP Act.
92 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 7 -- Third line forcing and exclusive dealing
.63 This subsection is no longer necessary due to the amendments made in item
26 of this Schedule. This is in line with the amendments to subsection 47(10)
of the TP Act made in item 4 of this Schedule.
Item 29 -- Application
.64 This subsection is no longer necessary due to the amendments made in item
27 of this Schedule. This is in line with the amendments to subsection 47(10)
of the TP Act made in item 4 of this Schedule.
Trade Practices Legislation Amendment Bill (No. 1) 2005 93
Schedule 7 -- Third line forcing and exclusive dealing
Part 2 -- Related companies
Trade Practices Act 1974
.65 Third line forcing conduct, whereby a corporation sells goods or services,
or gives a discount, but only on the condition that the purchaser acquires other
goods from a third party, is currently prohibited per se. If the same practice
were undertaken by a single corporate entity, it would be subject to a
substantial lessening of competition test. The Dawson Review recommended
that related companies should be treated as a single entity for the purposes of
section 47, bringing the treatment of third line forcing activity into line with
that of the other forms of exclusive dealing.
Item 30 -- At the end of subsections 47(6) and (7)
.66 Item 30 adds `not being a body corporate related to the corporation' to the
end of subsections 47(6) and (7).
.67 This ensures that related companies are treated as a single entity for the
purposes of sections 46(6) and (7).
Item 31 -- Paragraph 151AJ(5)(f)
.68 Item 31 inserts `subsections 47(6) and (7) and' after `omitted from' in
paragraph 151AJ(5)(f).
.69 This ensures that the exemption to subsections 47(6) and (7) for related
companies, whereby related companies are treated as a single entity for the
purposes of subsections 47(6) and (7), does not apply to a carrier or carriage
service provider that is not a corporation when the conduct in question relates to
the telecommunications market.
Item 32 -- At the end of subsections 47(6) and (7) of the Schedule
.70 Item 32 adds `not being a body corporate related to the corporation' to the
end of subsections 47(6) and (7) of the Schedule.
.71 This ensures that related persons (including corporations) are treated as a
single entity for the purposes of sections 46(6) and (7) of the Schedule.
94 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 7 -- Third line forcing and exclusive dealing
Item 33 -- Application
.72 Item 33 ensures that the amendments made by this Part apply to conduct
engaged in after the commencement of this Part.
Trade Practices Legislation Amendment Bill (No. 1) 2005 95
Schedule 7 -- Third line forcing and exclusive dealing
Part 3 -- Notification of exclusive dealing
Trade Practices Act 1974
Item 34 -- Paragraph 93(2)(b)
.73 Item 34 omits `or granting an authorisation (whether or not the
authorisation is still in force)' from paragraph 93(2)(b). This ensures that
conduct that has previously been authorised, whether or not that authorisation is
still in force, can still be the subject of a notification.
Item 35 -- Application
.74 Item 35 ensures that the amendment made in this Part applies in relation to
notices given after the commencement of this Part, whether or not the
application for authorisation was dismissed before or after that commencement.
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Schedule 8 -- Enforcement
Trade Practices Act 1974
.75 This Schedule inserts a new Part XID (Search and seizure) into the TP Act.
The new Part sets out an enforcement regime for the purposes of determining
whether there has been a contravention of the TP Act, Part 20 of the
Telecommunications Act 1997 or Part 9 of the Telecommunications (Consumer
Protection and Service Standards) Act 1999.
Item 1 -- Subsection 79A(1)
.76 Item 1 amends section 79A (Enforcement and recovery of certain fines) so
that subsection 79A(1) refers to the new section 154Q (Occupier to provide
reasonable facilities and assistance).
Item 2 -- Subsection 79A(1)
.77 Item 2 amends section 79A (Enforcement and recovery of certain fines) so
that subsection 79A(1) refers to section 149.1 of the Criminal Code that refers
to the new Part XID.
Item 3 -- Section 10.91
.78 Item 3 amends section 10.91 (application of section 155 to investigations
under Part) so that it refers to the new Part XID and section 155. This item also
amends the heading to section 10.91 so that it refers to the new Part XID.
Item 4 -- After Part XIC
.79 Item 4 inserts the new:
Part XID -- Search and seizure
after Part XIC. Part XID sets out an enforcement regime for the purposes of
finding out whether there has been a contravention of the TP Act. This replaces
section 155(2) authorisations, which provide the Commission with the power to
enter premises and inspect documents without a warrant. The Commission is
granted search and seizure powers, similar to the search warrant provision in
the Crimes Act 1914.
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Schedule 8 -- Enforcement
.80 The Dawson Review expressed concern that the section 155(2) powers are
not subject to adequate safeguards. Recommendation 13.1 of the Dawson
Review indicated that the Commission should continue to give careful
consideration to the financial implications of requests for information that are
made to businesses consistent with the Commission guidelines on this matter.
The Government accepted this recommendation, considering that while the
Commission needs broad investigative powers for the purpose of detecting and
prosecuting contraventions of the TP Act, it should be concerned about the
effect of information requests on recipients. Recommendation 13.3.1 of the
Dawson Review indicated that the TP Act should be amended to require the
Commission to seek a warrant from a Magistrate for the Commission to enter
premises and inspect documents. Recommendation 13.3.2 indicated that the TP
Act should be amended to extend the Commission's powers to include
searching for and seizing information.
.81 Part XID has five Divisions:
2 Division 1 -- Preliminary
3 Division 2 -- Appointment of inspectors and identity cards
4 Division 3 -- Entry to premises with consent
5 Division 4 -- Entry to premises under a search warrant.
This division consists of seven subdivisions:
.1 Subdivision A -- Powers available under a search warrant
.2 Subdivision B -- Availability of assistance and use of force in
executing a search warrant
.3 Subdivision C -- Obligations of executing officer and officers
assisting
.4 Subdivision D -- Occupier's rights and responsibilities
.5 Subdivision E -- General provisions relating to seizure
.6 Subdivision F -- Search warrants
.7 Subdivision G -- Powers of magistrates
6 Division 5 -- General provisions relating to electronic equipment
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Schedule 8 -- Enforcement
Division 1 -- Preliminary
New section 154 Simplified outline
.1 This provides a simplified outline of this Part.
New section 154A Definitions
.2 Section 154A introduces a number of defined terms. These definitions
apply in proceedings subject to Part XID, unless a contrary intention appears in
Part XID.
.3 The definitions in section 154A are:
7 consultant means a person engaged under section 27A;
8 evidential material means a document or evidence relating to a
contravention of this Act, Part 20 of the Telecommunications Act 1997, or
Part 9 of the Telecommunications (Consumer Protection and Service
Standards) Act 1999;
9 executing officer for a search warrant, this means the inspector named in
the warrant as being responsible for executing the warrant;
10 inspector means a person appointed to this function under section 154B;
11 occupier in relation to premises, includes a person present at the premises
who apparently represents the occupier;
12 officer assisting for a search warrant this means (a) an inspector assisting
in executing the warrant; or (b) a person authorised under section 154K,
in relation to the warrant;
13 premises means (a) an area of land or any other place (whether or not it is
enclosed or built on); or (b) a building or other structure; or (c) a vehicle,
vessel or aircraft; or (d) a part of any such premises;
14 search warrant means a warrant issued by a magistrate under section
154X or signed by a magistrate under section 154Y;
15 thing includes a thing in electronic or magnetic form.
Division 2 -- Appointment of inspectors and identity cards
Trade Practices Legislation Amendment Bill (No. 1) 2005 99
Schedule 8 -- Enforcement
.1 Division 2 provides for the appointment of inspectors and the issue of
identity cards. Recommendation 13.2 of the Dawson Review indicated that the
function of conducting an examination of a person who is in receipt of a
section 155(1)(c) notice should be delegable to senior staff of the Commission.
The Government endorsed this recommendation because it provides greater
flexibility to the Commission, as Commissioners need not be directly involved
in the detail of particular investigations.
New section 154B Appointment of inspectors
.2 Section 154B allows for the appointment of inspectors.
.3 Subsection 154B(1) bestows power upon the Chairperson to appoint
inspectors.
Staff member to have suitable qualifications and experience
.4 Subsection 154B(2) ensures that inspectors have suitable qualifications and
experience.
Inspector to comply with Chairperson's directions
.5 Subsection 154B(3) makes it clear that inspectors must comply with any
directions of the Chairperson in exercising powers or functions.
New section 154C Identity cards
.6 Section 154C prescribes the requirements for inspectors who are issued
with and who carry identity cards.
.7 Subsection 154C(1) provides that the Chairperson must issue an identity
card to an inspector.
Form of identity card
.8 Subsection 154C(2) indicates that the identity card must be in the form
prescribed by the regulations, and must contain a recent photograph of the
inspector.
Offence
.9 Subsection 154C(3) provides that a person commits an offence if
16 the person has been issued with a card; and
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Schedule 8 -- Enforcement
17 the person ceases to be an inspector; and
18 the person does not return the identity card to the Chairperson as soon as
practicable.
.1 The penalty applicable under section 154C(3) is one penalty unit.
.2 Subsection 154C(4) makes it clear that the offence created by section
154C(3) is a strict liability offence.
Card lost of destroyed
.3 Subsection 154C(5) makes it clear that subsection 154C(3) does not apply if
the card was lost or destroyed.
Inspector must carry card
.4 Subsection 154C(6) requires the inspector to carry their card at all times
when exercising powers or performing functions as an inspector.
Inspector must produce card on request
.5 Subsection 154C(7) provides that an inspector is not entitled to exercise any
powers in relation to premises if the occupier of the premises has requested the
inspector to produce the card and they fail to comply with the request.
Division 3 -- Entry to premises with consent
.6 Division 3 concerns entry to premises with the consent of the occupier of
the premises.
New section 154D Entry with consent
.7 Section 154D provides that inspectors and their assistants may enter
premises with the voluntary consent of the occupier where there are reasonable
grounds for suspecting that there may be evidential material on the premises.
Entry
.8 Subsection 154D(1) prescribes the conditions under which the inspector
may enter premises, namely where there are reasonable grounds to suspect that
evidence is being held on the premises, and the inspector has obtained the
consent of the occupier of the premises to enter the premises.
Subsection 154D(2) allows an inspector to be accompanied by one or more
assistants.
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Schedule 8 -- Enforcement
Obtaining consent
.9 Subsection 154D(3) requires the inspector to inform the person they are
seeking consent from, that the person may refuse consent. Subsection 154D(4)
requires consent to be voluntary.
New section 154E Powers in relation to premises
.10 Section 154E provides powers to inspectors in relation to premises.
.11 Subsection 154E(1) provides that an inspector or assistant may exercise
powers once they have entered the premises, including searching for evidence,
making copies of evidence including electronic materials, removing evidence
with the consent of the occupier, securing evidence pending a warrant to seize
it, and taking equipment onto the premises to achieve any of these aims. It is
noted that Division 5 also addresses the operation of electronic equipment at the
premises.
Obtaining consent to remove evidential material
.12 Subsection 154E(2) provides that prior to obtaining consent to remove
evidence from the premises, the inspector or assistant must inform the person of
the purpose for which the material is required and that the person may refuse
consent. It also provides that only voluntary consent is effective.
New section 154F Operation of electronic equipment at premises
.13 Subsection 154F(1) indicates that an inspector or assistant has two options
when evidential material is accessible by operating electronic equipment at the
premises.
Removal of documents
.14 Subsection 154F(2) provides that one option is to use the electronic
equipment at the premises to put the evidential material in documentary form
and remove the documents so produced .
Removal of disk, tape or other storage device
.15 Subsection 154F(3) provides that the other option is to operate the
equipment at the premises to transfer the evidential material onto a storage
device (for example, disk or tape) and remove that storage device from the
premises.
Division 4 -- Entry to premises under a search warrant
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Schedule 8 -- Enforcement
.16 This Division deals with entry to premises under a search warrant issued by
a magistrate. It sets out the powers available under a search warrant, the
obligations of persons entering the premises, and the rights and responsibilities
of the occupier of the premises.
.17 The Dawson Review identified the concern that the Commission's
investigative powers under section 155 lack adequate safeguards, particularly in
relation to section 155(2), which provides the Commission with power to enter
premises and inspect documents without the need for a warrant.
.18 Recommendation 13.3.1 of the Dawson Review stated that the
Commission's powers to enter premises and inspect documents should be
subject to the Commission seeking and obtaining a warrant from a Federal
Court Judge or Magistrate for the exercise of those powers. The Government
endorsed this recommendation noting that the Commission's powers are
extensive, and that regulatory power must be matched with appropriate
accountability. Accordingly, Division 4 requires the Commission to seek a
warrant for the exercise of its powers to gather evidence, and grants search and
seizure powers to the Commission.
.19 Recommendation 13.3.2 of the Dawson Review stated that section 155(2)
of the TP Act should be amended to provide the Commission with the power to
search for and seize information. The Government accepted this
recommendation on the basis that it would provide greater clarification and
certainty, as the elements of these powers are generally well known.
Subdivision A -- Powers available under a search warrant
New section 154G The things that are authorised by a search warrant
.20 Subsection 154G(1) details the conduct permitted under the warrant. It
provides that an executing officer or an officer assisting may:
19 enter the premises;
20 search the premises;
21 make copies of the kind of evidential material specified in the warrant;
22 operate electronic equipment at the premises (see Division 5); and
23 take equipment and material onto the premises and use it for these
purposes
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Schedule 8 -- Enforcement
Seizing other evidence
.1 Subsection 154G(2) provides that the executing officer or assistant may
seize other material that is not specified in the warrant, where they have
reasonable grounds to believe both that the material is evidence of an indictable
offence against the TP Act, or Part 20 of the Telecommunications Act 1997 or
Part 9 of the Telecommunications (Consumer Protection and Service
Standards) Act 1999 and seizure is necessary to prevent it from being destroyed
or concealed.
New section 154H Operation of electronic equipment at premises
.2 Subsection 154H(1) indicates that the executing officer may do one of the
three things if they find that the kind of evidential material specified in the
warrant is accessible by operating electronic equipment at the premises.
Seizure
.3 Subsection 154H(2) provides that one thing they may do is seize the
equipment and any disk, tape or other associated device.
Removal of documents
.4 Subsection 154H(3) provides that one thing they may do is operate the
equipment or other facilities at the premises to put the evidential material into
documentary form, and the remove the documents so produced.
Removal of disk, tape or other storage device
.5 Subsection 154H(4) provides that the final thing they may do is operate the
equipment at the premises to transfer the evidential material to a disk, tape or
storage device and then remove that device.
Limitation on seizure
.6 Subsection 154H(5) provides that seizure under subsection 154H(2) is
limited to cases where it is not practicable to put the evidential material in
documentary form or transfer the evidential material to a storage device
(subsections 154H(3) or (4)), or where possession of the thing by the occupier
could constitute an offence against a law of the Commonwealth.
New section 154J Securing electronic equipment for use by experts
.7 Subsection 154J(1) allows for an executing officer who has reasonable
grounds to believe that the kind of evidence specified in the warrant may be
104 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 8 -- Enforcement
accessible by operating electronic equipment at the premises, and expert
assistance is required to operate the equipment and the material may be
destroyed, altered or interfered with, then the officer may do whatever is
necessary to secure the equipment, such as locking it up or placing a guard.
Notice to occupier
.8 Subsection 154J(2) requires the executing officer to give notice to the
occupier of the premises of their intention to secure the equipment and of the
fact that the equipment will be secured for up to 24 hours.
Period equipment may be secured
.9 Subsection 154J(3) allows the equipment to be secured for a period not
exceeding 24 hours or until the equipment has been operated by the expert,
whichever happens first.
Extensions
.10 Subsection 154J(4) allows the executing officer or assistant to apply to a
magistrate for an extension of time where there is reasonable grounds for belief
that the expert assistance will not be available within 24 hours.
.11 Subsection 154J(5) requires the executing officer or assistant to give notice
to the occupier of their intention to apply for an extension for a specified
period, and the occupier is entitled to be heard regarding the application.
.12 Subsection 154J(6) allows the magistrate to order an extension for a period
specified in the order if they are satisfied that the extension is necessary.
Subdivision B -- Availability of assistance and use of force in executing a
search warrant
New section 154K Authorisation of officers assisting
.13 Section 154K provides that the executing officer may, by writing, authorise
a member of staff assisting the Commission or a consultant to assist in
executing the warrant.
New section 154L Availability of assistance and use of force in executing
a search warrant
.14 Section 154L provides that in executing a warrant: (a) the executing officer
is able to obtain such assistance as is necessary and reasonable in the
circumstances; (b) the executing officer, or another inspector who is an officer
Trade Practices Legislation Amendment Bill (No. 1) 2005 105
Schedule 8 -- Enforcement
assisting, may use such force against persons and things as is necessary and
reasonable in the circumstances; and (c) a person who is not an inspector, but
who is an officer assisting, to use such force against things as is necessary and
reasonable in the circumstances.
Subdivision C -- Obligations of executing officer and officers assisting
New section 154M Announcement before entry
.15 Subsection 154M(1) provides that before any person enters premises under
a search warrant, the executing officer must (a) announce that he or she is
authorised to enter the premises; and (b) give any person at the premises an
opportunity to allow entry to the premises. Subsection 15AM(2) makes it clear
that the executing officer is not required to comply with subsection 15AM(1) if
he or she believes on reasonable grounds that immediate entry to the premises
is required to ensure that the effective execution of the warrant is not frustrated.
New section 154N Details of warrant to be given to occupier
.16 This section makes it clear that if a search warrant in relation to premises is
being executed and the occupier of the premises is present at the premises, the
executing officer or an officer assisting must make available to the occupier a
copy of the warrant or a copy of the form of warrant.
Subdivision D -- Occupier's rights and responsibilities
New section 154P Occupier entitled to observe search being conducted
.17 Subsection 154P(1) provides that if a search warrant in relation to premises
is being executed and the occupier of the premises is present at the premises,
the occupier is entitled to observe the search being conducted. Subsection
154P(2) makes it clear that the occupier's right to observe the search being
conducted ends if the occupier impedes the search. Subsection 154P(3)
provides that section 154P does not prevent 2 or more areas of the premises
being searched at the same time.
New section 154Q Occupier to provide reasonable facilities and
assistance
.18 Section 154Q obligates the occupier of premises in relation to which a
search warrant is being executed to provide the executing officer and any
officer assisting with all reasonable facilities and assistance for the effective
exercise of their powers. An offence is committed, punishable by 30 penalty
units for non-compliance with this section.
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Schedule 8 -- Enforcement
New section 154R Answering of questions or producing evidential
material
.19 Subsection 154R(1) provides that if a search warrant in relation to premises
is being executed, the executing officer or an officer assisting may: (a) require a
person at the premises to answer questions or produce evidential material to
which the warrant relates; and (b) seize that evidential material. Section
154R(2) makes it clear that a person commits an offence if the person fails to
comply with a requirement under subsection 15AR(1). The penalty for
non-compliance with this section is 30 penalty units.
Self-incrimination is no excuse
.20 Subsection 154R(3) makes it clear that an individual is not excused from
answering a question or producing evidential material on the ground that the
answer, or the production of the material, might tend to incriminate the
individual or make the individual liable to a penalty.
.21 Subsection 154R(4) provides that the answer to a question is not admissible
in evidence against the individual in any criminal proceedings, or in any
proceedings that would expose the person to a penalty, other than for an offence
against subsection 15AR(2) or proceedings for an offence against section 137.1
or 137.2 of the Criminal Code that relates to this Part. Limiting the protection
provided to an individual to `use' immunity for answers given to an officer of
the Commission is consistent with the guidelines set out in A guide to framing
Commonwealth offences, civil penalties and enforcement powers, issued by the
Minister for Justice and Customs.
Subdivision E -- General provisions relating to seizure
New section 154S Copies of seized things to be provided
.22 Subsection 154S(1) provides that if under a search warrant relating to
premises, the executing officer or an officer assisting seizes: (a) a document,
film, computer file or other thing that can be readily copied; or (b) a storage
device the information in which can be readily copied; then he or she must, if
requested to do so by the occupier of the premises, give a copy of the thing or
the information to the occupier as soon as practicable after the seizure.
Subsection 154S(2) makes it clear that subsection 154S(1) does not apply if
possession of the document, film, computer file, thing or information by the
occupier could constitute an offence against a law of the Commonwealth.
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Schedule 8 -- Enforcement
New section 154T Receipts for things seized under warrant
.23 Subsection 154T(1) provides that if a thing is seized under a search
warrant, the executing officer or an officer assisting must provide a receipt for
the thing. Subsection 154T(2) makes it clear that two or more things are seized,
they may be covered in the one receipt.
New section 154U Return of seized things
.24 Section 154U deals with the return of seized things. Subsection 154U(1)
indicates that a thing which is seized under this Division must be returned if the
reason for seizure no longer exists, or the item will not be used in evidence, or
the period of 60 days after seizure ends, whichever occurs first, unless the item
is forfeited to the Commonwealth or is the subject of disputed ownership.
Subsection 154U(2) indicates that at the end of the 60 day period, the seizer
must take reasonable steps to return the thing to the person from whom it was
seized, unless it is being used in current proceedings, or the inspector may
retain the thing under section 154V (Magistrate may permit a thing to be
retained) or the seizer is otherwise authorised to retain, destroy or dispose of the
thing.
New section 154V Magistrate may permit a thing to be retained
.25 Section 154V allows for a magistrate to permit a thing to be retained.
Application for extension
.26 Subsection 154V(1) allows an inspector to apply to a magistrate for an
order to extend the time that the thing may be retained if proceedings have not
commenced either: (a) before the end of 60 days after the seizure; or (b) before
the end of a period previously specified by a magistrate under this section.
Grant of extension
.27 Subsection 154V(2) allows the magistrate to grant an extension of time for
the inspector to retain the thing for the purposes of investigation under the TP
Act, Part 20 of the Telecommunications Act 1997, or Part 9 of the
Telecommunications (Consumer Protection and Service Standards) Act 1999.
The maximum allowable period for retention is three years.
Affect on interested parties
.28 Subsection 154V(3) makes it clear that before making an application for an
extension of time, the inspector must: (a) take reasonable steps to discover who
has an interest in the retention of the thing; and (b) if it is practicable to do so,
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Schedule 8 -- Enforcement
notify each person whom the inspector believes to have such an interest of the
proposed application.
New section 154W Disposal of things if there is no owner or owner
cannot be located
.29 New section 154W allows for the disposal of a thing in an appropriate
manner if a thing is seized under this Division and there is no owner or the
owner cannot be located despite reasonable efforts.
Subdivision F -- Search warrants
New section 154X Issue of search warrants
.30 New section 154X provides for the issue of search warrants.
Application for warrant
.31 Subsection 154X(1) provides that an inspector may apply to a magistrate
for a warrant under this section in relation to premises.
Issue of warrant
.32 Subsection 154X(2) allows the magistrate to issue a warrant if the
magistrate is satisfied that there are reasonable grounds for suspecting that there
is evidential material on the premises or that there may be evidential material
on the premises within the next 72 hours.
.33 Subsection 154X(3) makes it clear that the magistrate must not issue the
warrant unless the inspector or some other person has given to the magistrate,
either orally or by affidavit, such further information (if any) as the magistrate
requires concerning the grounds on which the issue of the warrant is being
sought.
Content of warrant
.34 Subsection 154X(4) prescribes the matters which must be stated in the
warrant.
New section 154Y Search warrants by telephone, fax etc.
.35 Section 154Y deals with search warrants by telephone, fax etc.
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Schedule 8 -- Enforcement
Application for warrant
.36 Subsection 154Y(1) allows an inspector to apply to a magistrate by
telephone, fax or other electronic means for a warrant under section 154X in
relation to premises, where the inspector considers it urgent and necessary.
Voice communication
.37 Subsection 154Y(2) allows the magistrate to require communication by
voice as far as is practicable.
Information
.38 Subsection 154Y(3) provides that before applying for the warrant, the
inspector must prepare an information of the kind mentioned in
subsection 154X(2) in relation to the premises that sets out the grounds on
which the warrant is sought. It also provides that if it is necessary to do so, the
inspector may apply for the warrant before the information is sworn or
affirmed.
Issue of warrant
.39 Subsection 154Y(4) allows the magistrate to complete and sign the same
warrant that the magistrate would issue under section 154X if the magistrate is
satisfied that there are reasonable grounds for doing so after having considered
the terms of the information; and after having received such further information
(if any) as the magistrate requires concerning the grounds on which the issue of
the warrant is being sought.
Notification
.40 Subsection 154Y(5) requires the magistrate to inform the applicant, by
telephone, fax or other electronic means, of :(a) the terms of the warrant; (b) the
day on which and the time at which the warrant was signed; and (c) the day (not
more than one week after the magistrate completes and signs the warrant) on
which the warrant ceases to have effect.
Form of warrant
.41 Subsection 154Y(6) requires the applicant to complete a form of warrant in
the same terms as the warrant completed and signed by the magistrate, stating
on the form the name of the magistrate and the day on which and the time at
which the warrant was signed.
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Completed form of warrant to be given to magistrate
.42 Subsection 154Y(7) requires the applicant to send to the magistrate, not
later than the day after the day of expiry or execution of the warrant, whichever
is the earlier: (a) the form of warrant completed by the applicant; and (b) the
information referred to in subsection 154Y(3) (which must have been duly
sworn or affirmed).
Attachment
.43 Subsection 154Y(8) requires the magistrate to attach to the documents
provided under subsection 154Y(7) to the warrant completed by the magistrate.
Authority of warrant
.44 Subsection 154Y(9) makes it clear that a form of warrant duly completed
under subsection 154Y(6) is authority for the same powers as are authorised by
the warrant signed by the magistrate.
.45 Subsection 154Y(10) makes it clear that if it is relevant in any proceedings
for a court to be satisfied that an exercise of a power was authorised by section
154Y and the warrant signed by the magistrate authorising the exercise of the
power is not produced in evidence; then the court must assume unless the
contrary is proved, that the exercise of the power was not authorised by such a
warrant.
New section 154Z Offences relating to warrants
.46 Section 154Z deals with offences relating to warrants.
.47 Section 154Z imposes important safeguards upon inspectors by creating a
number of offences relating to warrants
.48 Subsection 154Z(1) provides that inspector must not make, in an
application for a warrant, a statement that the inspector knows to be false or
misleading in a material particular. The penalty for non-compliance with this
section is imprisonment for 2 years.
.49 Subsection 154Z(2) prohibits an inspector from engaging in various
conduct, that an inspector meet certain obligations when carrying out a warrant
The penalty for non-compliance with any contravention of this section is
imprisonment for 2 years.
Subdivision G -- Powers of magistrates
Trade Practices Legislation Amendment Bill (No. 1) 2005 111
Schedule 8 -- Enforcement
New section 154ZA Powers conferred on magistrates
.50 Subsection 154ZA(1) makes it clear that a power conferred on a magistrate
by this Division is conferred on the magistrate in a personal capacity and not as
a court or a member of a court and that the magistrate need not accept the
power conferred. Subsection 154ZA(2) provides that a magistrate exercising
such a power has the same protection and immunity as if he or she were
exercising that power as, or as a member of, the court of which the magistrate is
a member.
Division 5 -- General provisions relating to electronic equipment
.51 Division 5 contains general provisions regarding the operation of electronic
equipment.
New section 154ZB Operation of electronic equipment at premises
.52 Section 154ZB makes it clear that a person may operate electronic
equipment at premises in order to exercise a power under this Part only if he or
she believes on reasonable grounds that the operation of the equipment can be
carried out without damage to the equipment.
New section 154ZC Compensation for damage to electronic equipment
.53 Section 154ZC addresses compensation for damage to electronic
equipment.
.54 Subsection 154ZC(1) indicates that this section applies where electronic
equipment, recorded data, or programs are damaged in the operations
mentioned in sections 154E, 154F, 154G, 154H or 154J, and the damage occurs
because of insufficient care in the operation or choice of person to operate the
equipment. Subsection 154ZC(2) requires the Commonwealth to pay the owner
of the equipment or the user of data or programs reasonable compensation for
the damage, as the owner and Commonwealth agree.
.55 Subsection 154ZC(3) provides that if the owner and Commonwealth are
unable to agree, then the owner may commence proceedings in the Federal
Court of Australia. Subsection 154ZC(4) indicates that when determining the
compensation, regard is to be had as to whether the occupier or their agents and
employees who were available at the time provided any appropriate warning or
guidance on the operation of the equipment.
.56 Subsection 154ZC(5) provides that compensation is payable from the
money appropriated by the Parliament. Subsection 154ZC(6) defines damage
112 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 8 -- Enforcement
in relation to data for the purposes of subsection 154ZC(1) (that is, by erasure
of data or addition of other data).
Item 5 -- Subsection 155(1)
.57 Item 5 amends subsection 155(1). This is to extend the Commissions
powers under section 155 when it is considering a revocation under
sections 91B and 91C. This applies recommendation 13.4.1 of the Dawson
Review, which indicated that section 155 should be amended to extend the
availability of the Commission's investigative powers to circumstances where
the Commission is considering the revocation of an authorisation under
sections 91B and 91C. The Government accepted this recommendation
because these technical adjustments will improve the general application of the
Commission's investigative powers.
Item 6 -- Paragraph 155(1)(c)
.58 Item 6 amends subsection 155(1)(c) to allow the function of conducting an
examination of a person who has received a notice to appear before the
Commission to give evidence to be delegated to a member of staff assisting the
Commission who is an SES employee or an acting SES employee.
Item 7 -- Subsection 155(2)
.59 Item 7 repeals the existing section which authorises an approved officer of
the Commission to obtain documents and evidence from premises. This section
is replaced by the new enforcement provisions outlined under section 154 of
Part XID which include provisions for search and seizure powers subject to
judicial approval.
Item 8 -- Subsection 155(2A)
.60 Item 8 omits `or an authorisation under subsection (2)' from
subsection 155(2). This is a consequential amendment arising from Item 7
which repeals section 155(2).
Item 9 -- Subsection 155(3)
.61 Item 9 repeals subsection 155(3) and substitutes two new subsections. The
new subsection 155(3) allows the Commission to require evidence under
subsection 155(1) to be given under oath or affirmation, which may be
administered by a member of the Commission. The new subsection 155(3A)
Trade Practices Legislation Amendment Bill (No. 1) 2005 113
Schedule 8 -- Enforcement
allows a staff member assisting the Commission to require evidence that is
given under subsection 155(1) to be given under oath or affirmation, and may
administer the oath or affirmation.
Item 10 -- Subsection 155(4)
.62 Item 10 repeals subsection 155(4) as the legislation to which it refers is no
longer in force.
Item 11 -- Paragraph 155(5)(b)
.63 Item 11 omits `or' as the subsequent item is repealed (see item 12).
Item 12 -- Paragraph 155(5)(c)
.64 Item 12 repeals the paragraph as the legislation to which it refers, section
155(2), is repealed.
Item 13 -- Subsection 155(6)
.65 Item 13 repeals the subsection as the legislation to which it refers, section
155(2), is repealed.
Item 14 -- Subsection 155(6A)
.66 Item 14 omits `or (6)' from subsection 155(6A). This is because
subsection 155(6) is repealed by item 13.
Item 15 -- Subsection 155(7)
.67 Item 15 omits `or permitting the inspection of' from subsection 155(7).
This is a consequential amendment arising from the repeal of section 155(2) by
item 7.
Item 16 -- Subsection 155(7)
.68 Item 16 omits `or made available to an authorised officer for inspection'
from subsection 155(7). This is a consequential amendment arising from the
repeal of section 155(2) by item 7.
114 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 8 -- Enforcement
Item 17 -- Paragraphs 155(7A)(b) and (c)
.69 Item 17 omits `or permit inspection of' from paragraphs 155(7A)(b) and
(c). This is a consequential amendment arising from the repeal of section
155(2) by item 7.
Item 18 -- After subsection 155(7A)
.70 Item 18 inserts subsection 155(7B). Subsection 155(7B) provides that the
section does not require a person to produce a document that would disclose
information that is the subject of legal professional privilege.
.71 A note appears at the end of subsection 155(7B). This note makes it clear
that a defendant bears an evidential burden in relation to the matter in this
subsection (see subsection 13.3(3) of the Criminal Code).
.72 The insertion of subsection 155(7B) implements recommendation 13.5 of
the Dawson Review which stated that section 155 should be amended to ensure
that the TP Act does not require the production of documents to which legal
professional privilege attaches. The Government endorsed this
recommendation because preserving legal professional privilege is in the public
interest, as it facilitates the obtaining of legal advice and promotes the
observance of the law.
Item 19 -- At the end of section 155
.73 Item 19 adds subsection 155(10) at the end of section 155. Subsection
155(10) provides that in this section legal professional privilege includes
privilege under Division 1 of Part 3.10 of the Evidence Act 1995.
Item 20 -- Subsection 155AA(3) (paragraph (a) of the definition of
protected Part IV information)
.74 Item 20 inserts `Part XID or' after `under' in paragraph 155AA(3)(a). This
amendment expands the definition of protected Part IV information to include
information that is obtained by the Commission under the new Part XID and
relates to a matter arising under Part IV.
Trade Practices Legislation Amendment Bill (No. 1) 2005 115
Schedule 8 -- Enforcement
Item 21 -- Subsection 155AA(3) (subparagraph (a)(i) of the definition of
protected Part VB information)
.75 Item 21 inserts `Part XID' after `under' in subparagraph 155AA(3)(a)(i).
This amendment expands the definition of protected Part VB information to
include information that was obtained by the Commission under the new Part
XID and relates to a matter arising under Part VB.
Item 22 -- Subsection 155AB(3) (subparagraph (a)(i) of the definition of
protected Part XIB or XIC information)
.76 Item 22 inserts `or Part XID' after `155' in subparagraph 155AB(3)(a)(i).
This amendment expands the definition of protected Part XIB or XIC
information to include information that is obtained by the Commission under
the new Part XID and relates to a matter arising under Part XIB or XIC.
Item 23 -- Subsection 163(5)
.77 Item 23 inserts `154Q' after `118' in subsection 163(5). The effect of this
amendment is that a prosecution for an offence against section 154Q may be
commenced at any time after the commission of the offence.
Item 24 -- Subparagraph 171(3)(a)(ii)
.78 Item 24 repeals subparagraph 171(3)(a)(ii). This is a consequential
amendment arising from the repeal of section 155(2) by item 7.
Item 25 -- Paragraph 171(3)(b)
.79 Item 25 omits `or authorisations' in paragraph 171(3)(b). This is a
consequential amendment arising from the repeal of section 155(2) by item 7.
Item 26 -- Paragraph 171(3)(c)
.80 Item 26 omits `or authorisations' in paragraph 171(3)(c). This is a
consequential amendment arising from the repeal of section 155(2) by item 7.
Item 27 -- Paragraph 171(3)(d)
.81 Item 27 repeals paragraph 171(3)(d) and substitutes paragraphs 171(3)(d),
(da), (db) and (dc). Section 171 concerns the Annual Report issued by the
Commission. The old paragraph 171(3)(d) refers to section 155(2), which is
116 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 8 -- Enforcement
repealed by item 7. The new paragraphs include items that must be addressed
in the Annual Report. Specifically, the new paragraph 171(3)(d) requires the
inclusion of the number of search warrants issued or signed by a magistrate
under sections 154X and 154Y respectively. Paragraph 171(3)(da) requires the
inclusion of a general description of the matters over which the warrants were
issued or signed. Paragraph 171(3)(db) requires the inclusion of the number of
proceedings challenging the validity of the search warrants. Paragraph
171(3)(dc) requires the reporting of the number of entries onto premises under
Part XID.
Item 28 -- Application
.82 Item 28 makes it clear that the Commission will be able to use its
information gathering powers, as amended by item 4, after the commencement
of that item, to facilitate the prosecution of contraventions which may have
occurred either before or after the commencement of that item.
Item 29 -- Transitional -- old authorisations
.83 Item 29 provides for the continued effect of an authorisation given under
subsection 155(2) prior to the commencement of this item after that
commencement, but only in relation to any entry to premises that occurs before
the 14th day after the day on which this item commences.
Trade Practices Legislation Amendment Bill (No. 1) 2005 117
Schedule 9 -- Penalties
Part 1 -- Civil penalties
.1 The Schedule has three parts:
2 Part 1 -- Civil penalties;
3 Part 2 -- Disqualification from managing corporations; and
4 Part 3 -- Indemnities.
.1 Part 1 of the Schedule amends the TP Act and the Corporations Act 2001 to
implement recommendation 10.2.1 of the Dawson Review which provided that
the maximum pecuniary penalty for corporations be raised to be the greater of
$10 million or three times the gain from the contravention or, where the gain
cannot be readily ascertained, 10 per cent of the turnover of the body corporate
and all of its interconnected bodies corporate (if any).
Trade Practices Act 1974
Item 1 -- Subsection 75B(1)
.2 This item makes a consequential amendment to subsection 75B(1) to refer
to the new section 95AZN.
Item 2 -- At the end of paragraph 76(1)(a)
.3 This item makes a consequential amendment to subsection 76(1)(a) to refer
to the new section 95AZN.
Item 3 -- At the end of paragraphs 76(1)(b), (c) and (d)
.4 This item is a technical amendment to improve the expression of subsection
76(1).
Item 4 -- Subsection 76(1A)
.5 This item repeals and substitutes a new subsection 76(1A). The new
subsection makes it clear that the pecuniary penalty payable by a body
118 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 9 -- Penalties
corporate for each act or omission relating to a provision of Part IV (apart from
sections 45D, 45DB, 45E or 45EA of Part IV which remains at $750,000 alone)
is to be the greatest of the following:
(i) $10,000,000;
(ii) if the Court can determine the value of the benefit that the body corporate,
and any body corporate related to the body corporate, have obtained
directly or indirectly and that is reasonably attributable to the act or
omission -- 3 times the value of that benefit;
(iii) if the Court cannot determine the value of that benefit -- 10% of the
annual turnover of the body corporate during the period (the turnover
period) of 12 months ending at the end of the month in which the act or
omission occurred.
.6 This item also inserts a note at the end of subparagraph 76(1A)(b)(iii). This
note makes it clear that the term annual turnover is defined by reference to the
new subsection 76(5).
.7 The new subsection 76(1A) also makes it clear that the pecuniary penalty
payable by a body corporate for each act or omission relating to the new section
95AZN (Providing false or misleading information) is not to exceed $33,000.
Item 5 -- Subsection 76(1B)
.8 This item repeals and substitutes a new subsection 76(1B). The new section
makes it clear that the pecuniary penalty payable by a person other than a body
corporate for each act or omission relating to the new section 95AZN
(Providing false or misleading information) is not to exceed $6,600, and for
each act or omission involved in section 76, must not exceed $500,000.
Item 6 -- Subsection 76(4)
.9 This item amends subsection 76(4) to refer to the relevant paragraphs ((a)
and (b)) of the new subsection 76(1A). Under subsection 76(3) a person is only
liable for one pecuniary penalty for the same conduct which may relate to more
than one contravention.
.10 Subsection 76(4) ensures that where a range of penalties are applicable, the
highest penalty will apply.
Trade Practices Legislation Amendment Bill (No. 1) 2005 119
Schedule 9 -- Penalties
Item 7 -- At the end of section 76
.11 This item inserts new subsections 76(5) and (6).
Annual turnover
.12 New subsection 76(5) introduces a definition of annual turnover. The
definition provides that, for the purposes of section 76, the annual turnover of a
body corporate during the turnover period is the sum of the values of all the
supplies that the body corporate, and any related body corporate, have made, or
are likely to make, during that period other than:
(a) supplies made from any of those bodies corporate to any other of those
bodies corporate; or
(b) supplies that are input taxed; or
(c) supplies that are not for consideration (and are not taxable supplies under
section 72-5 of the A New Tax System (Goods and Services Tax)
Act 1999); or
(d) supplies that are not made in connection with an enterprise that the body
corporate carries on; or
(e) supplies that are not connected with Australia.
.13 This item makes it clear that for the purposes of calculating annual turnover
these items are excluded.
Item 8 -- Subsection 76A(1)
.14 This item inserts a definition of contravention into subsection 76A(1).
This definition provides that contravention, in relation to a section, includes
conduct referred to in paragraph 76(1)(b), (c), (d), (e) or (f) that relates to a
contravention of section 75AYA (Prohibition on misrepresenting the effect of
new tax system changes) and new section 95AZN (Providing false or
misleading information).
.15 This amendment reflects the various ways in which a person may be
involved in a contravention for the purposes of section 76A.
.16 It will be a defence to proceedings under section 76 relating to a
contravention of new section 95AZN (Providing false or misleading
information) if the respondent establishes reasonable mistake, reasonable
120 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 9 -- Penalties
reliance on information supplied by another, factors beyond the respondent's
control or the respondent exercised due diligence to avoid the contravention.
Item 9 -- Subsection 76A(1)(definition of contravention of section
75AYA)
.17 This item repeals the definition of contravention of section 75AYA.
Item 10 -- Subsection 76A(2)
.18 This item amends subsection 76A(2) to refer to the new section 95AZN
(Providing false or misleading information).
Item 11 -- Subsection 76B(1)
.19 This item inserts a definition of contravention into subsection 76B(1).
This definition provides that contravention, in relation to a section, includes
conduct referred to in paragraph 76(1)(b), (c), (d), (e) or (f) that relates to a
contravention of this section.
.20 This amendment reflects the various ways in which a person may be
involved in a contravention for the purposes of section 76B.
.21 This item inserts a note. This note makes it clear that the heading to
section 76B is altered by inserting `or section 95AZN' after `75AYA'. This
insertion ensures the provision applies to new section 95AZN (Providing false
or misleading information). Section 76B provides for the interaction of
pecuniary penalty and offence proceedings.
Item 12 -- Subsection 76B(1)(definition of contravention of section
75AYA)
.22 This item repeals the definition of contravention of section 75AYA.
Item 13 -- Subsection 76B(2), (3) and (4)
.23 This item amends subsections 76B(2), (3) and (4) to refer to the new
section 95AZN (Providing false or misleading information).
Trade Practices Legislation Amendment Bill (No. 1) 2005 121
Schedule 9 -- Penalties
Item 14 -- Paragraph 76B(5)(a)
.24 This item amends paragraph 76B(5)(a) to refer to the new section 95AZN
(Providing false or misleading information).
Item 15 -- Application
.25 This item makes it clear that the amendments made by this Part apply in
relation to contraventions occurring after the commencement of this Part.
Part 2 -- Disqualification from managing corporations
.26 The following amendments to the Corporations Act 2001 and the TP Act
implement recommendation 10.2.2 of the Dawson Review which provides that
the Court be given the option to exclude an individual implicated in a
contravention from being a director of a corporation or being involved in its
management.
Corporations Act 2001
Item 16 -- After section 206E
New section 206EA Disqualification under the Trade Practices Act 1974
.27 This item insets a new section.
.28 This new section provides that a person is disqualified from managing
corporations if a court order disqualifying the person from managing
corporations is in force under section 86E of the TP Act.
.29 The new section 206EA makes it clear that a disqualification under the new
section 86E is taken to be a disqualification from managing a corporation under
Part 2D.6 (Disqualification from managing corporations) of the Corporations
Act 2001.
Item 17 -- After section 206G
New section 206GA Involvement of ACCC -- leave orders under
section 206G
.30 This item inserts a new section.
122 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 9 -- Penalties
Scope of section
.31 Subsection 206GA(1) provides that this section applies in relation to a
person who is disqualified from managing corporations under section 206EA.
Notice lodged with ASIC before leave application
.32 Subsection 206GA(2) makes it clear that if a person lodges a notice with
ASIC under subsection 206G(2) then ASIC is required to give the ACCC a
copy of the notice.
Leave orders
.33 Subsection 206GA(3) makes it clear that if a person lodges a copy of a
leave order with ASIC under subsection 206G(4), then ASIC is required to give
the ACCC a copy of the order.
Revoking leave
.34 Subsection 206G(4) requires ASIC to consult the ACCC before making an
application for an order under subsection 206G(5).
Definition
.35 Subsection 206(5) defines ACCC to mean the Australian Competition and
Consumer Commission.
Item 18 -- Paragraph 1274AA(1)(a)
.36 This item amends paragraph 1274AA(1)(a) to refer to the new
section 206EA.
Item 19 -- After paragraph 1274AA(2)(a)
.37 Item 11 amends paragraph 1274AA(2)(a) to refer to the new
section 206EA. The effect of this item is to require ASIC to keep a register of
disqualifications made pursuant to section 206EA.
Trade Practices Legislation Amendment Bill (No. 1) 2005 123
Schedule 9 -- Penalties
Trade Practices Act 1974
Item 20 -- After section 86D
New section 86E Order disqualifying a person from managing
corporations
.38 This item insets a new section after section 86D.
.39 Subsection 86E(1) provides that on application by the Commission, the
Court may make an order disqualifying a person from managing corporations
for a period that the Court considers appropriate if two items are satisfied.
These are that: (a) the Court has ordered the person to pay a pecuniary penalty
under subsection 76(1) for a contravention of a provision of Part IV; and (b) the
Court is satisfied that the disqualification is justified.
.40 Item 20 also inserts a note at the end of the new subsection 86E(1). This
note observes that section 206EA of the Corporations Act 2001 provides that a
person is disqualified from managing corporations if a court order is in force
under this section and that the Corporations Act 2001 contains various
consequences for persons so disqualified.
.41 Subsection 86E(2) provides that in determining whether the
disqualification is justified, the Court may have regard to a number of items.
These are: (a) the person's conduct in relation to the management, business or
property of any corporation; and (b) any other matters that the Court considers
appropriate.
.42 Subsection 86E(3) requires the Commission to notify ASIC if the Court
makes an order under section 86E. This subsection also requires the
Commission to give ASIC a copy of the order. These obligations are necessary
to enable ASIC to meet its obligation to maintain a register of persons who
have been disqualified from managing corporations pursuant to section
1274AA of the Corporations Act 2001.
.43 Item 20 also inserts a note at the end of subsection 86E(3). This note
confirms that ASIC must keep a register of persons who have been disqualified
from managing corporations.
.44 Subsection 86E(4) provides that for the purposes of the new section 86E,
ASIC means the Australian Securities and Investments Commission.
124 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 9 -- Penalties
Item 21 -- Application
.45 This item makes it clear that amendments made by this Part apply in
relation to contraventions occurring after the commencement of this Part.
Part 3 -- Indemnities
.46 Part 3 of this Schedule addresses recommendation 10.2.3 of the Dawson
Review. To that end, corporations will be prohibited from indemnifying
officers against pecuniary penalties imposed, and legal costs incurred, as a
result of proceedings pursuant to section 76 for a contravention of Part IV of
the TP Act. Such a prohibition is consistent with the prohibition in section
199A of the Corporations Act 2001.
Trade Practices Act 1974
Item 22 -- Paragraph 6(2)(h)
.47 This item amends paragraph 6(2)(h) to refer to the new section 77A.
Item 23 -- After section 77
.48 This item inserts new sections 77A, 77B and 77C.
New section 77A Indemnification of officers
.49 New subsection 77A(1) provides that a body corporate (the first body), or a
body corporate related to the first body, must not indemnify a person (whether
by agreement or by making a payment and whether directly or thorough an
interposed entity) against any of the following liabilities incurred as an officer
of the first body:
5 civil liability; or
6 legal costs incurred in defending or resisting proceedings in which the
person is found to have such a liability.
.1 For the purposes of subsection 77A(1), a corporation is not considered to be
indemnifying an officer if, for example, it advances monies or makes a loan to
an officer to enable that person to defend or resist legal proceedings, but only if
the monies advanced, or loan made, must be repaid if the officer is found to
Trade Practices Legislation Amendment Bill (No. 1) 2005 125
Schedule 9 -- Penalties
have contravened Part IV of the TP Act and is liable to pay a pecuniary penalty
of any size pursuant to section 76 of the TP Act.
.2 The offence prescribes a penalty of 25 penalty units.
.3 Subsection 77A(2) makes it clear that for the purposes of subsection
77A(1), the outcome of proceedings is the outcome of the proceedings and any
appeal in relation to the proceedings.
Definitions
.4 Subsection 77A(3) inserts a definition of civil liability and officer. These
definitions apply in proceedings under this section. For these purposes:
7 civil liability means a liability to pay a pecuniary penalty under section 76
for a contravention of a provision of Part IV;
8 officer has the same meaning as in the Corporations Act 2001.
New section 77B Certain indemnities not authorised and certain
documents void
.1 Subsection 77B(1) makes it clear that section 77A does not authorise
anything that would otherwise be unlawful.
.2 Subsection 77B(2) confirms that anything that purports to indemnify a
person against a liability is void to the extent that it contravenes section 77A.
New section 77C Application of section 77A to a person other than a
body corporate
.3 The new section 77C enables individuals to be implicated as a result of the
offence created by the new section 77A. The offence is punishable by a fine
not exceeding 5 penalty units.
Item 24 -- Application
.4 This item makes it clear that amendments made by this Part apply in
relations to contraventions occurring after the commencement of this Part.
126 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 10 -- Local government bodies
Trade Practices Act 1974
.5 Section 2D of the TP Act currently exempts the licensing decisions and
internal transactions of local government from Part IV of the TP Act. A
Productivity Commission inquiry into the operation of section 2D was
undertaken in accordance with the legislation review process under the National
Competition Policy agreements between the Commonwealth, states and
territories to review regulations that have the potential to restrict competition.
.6 The Productivity Commission found that, on balance, section 2D provides a
net benefit to the community, but that greater benefits would be obtained by
directly limiting the application of Part IV to the business activities of local
government, consistent with the original intention of the National Competition
Policy reforms (Productivity Commission Report No. 23, 14 August 2002).
.7 Schedule 10 repeals section 2D and replaces it with provisions having the
explicit effect that Part IV of the TP Act only applies to the business activities
of local government. This is consistent with the exemption currently provided
to Commonwealth, state and territory governments.
Item 1 -- After section 2B
.8 This item inserts section 2BA into the TP Act.
.9 Section 2BA(1) ensures that Part IV of the TP Act applies only to the
activities undertaken by local government bodies, or incorporated companies in
which local government bodies have a controlling interest to the extent they
carry on a business.
.10 Section 2BA(2) provides the definition of a local government body to be
applied for the purposes of this section. It means a body established by or
under a law of a state or territory for the purposes of local government, other
than a body established solely or primarily for the purposes of providing a
particular service, such as the supply of electricity or water.
Trade Practices Legislation Amendment Bill (No. 1) 2005 127
Schedule 10 -- Local government bodies
Item 2 -- Subsection 2C(1)
.11 Item 2 omits the words `sections 2A and 2B' from subsection 2C(1) and
substitutes `sections 2A, 2B and 2BA'. This clarifies those things that do not
involved carrying on a business for the purpose of those sections.
Item 3 -- At the end of paragraph 2C(1)(c)
.12 Item 3 adds to the end of paragraph 2C(1)(c) a subparagraph (viii) to the
effect that internal transactions between persons acting for the same local body,
or for the same incorporated company in which such a body has a controlling
interest, do not amount to transactions carrying on a business for the purposes
of the section. This brings the treatment of internal transactions within local
government bodies into line with that of internal transactions within
Commonwealth, state and territory governments.
Item 4 -- Subsection 2C(2)
.13 Item 4 omits `sections 2A and 2B' from subsection 2C(2) substituting
`sections 2A, 2B and 2BA' in order to clarify that the activities listed in
subsection 2C(1) do not limit the things that do not amount to carrying on a
business for local government bodies. This brings into line the treatment in this
regard of local government bodies within this section.
Item 5 -- Section 2D
.14 Item 5 repeals section 2D.
128 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 11 -- Functions and powers etc. under
Competition Code
Trade Practices Act 1974
.15 The Competition Code is essentially a Commonwealth-state/territory
co-operative scheme, consisting of the Schedule version of the competition
provision (Part IV) of the TP Act and associated provisions. The Competition
Code provides national coverage to the competition provisions of the TP Act.
.16 Under the Competition Code, state and territory laws confer functions and
powers on the Commission and the Tribunal to deal with anti-competitive
conduct by individuals. Section 150F of the TP Act consents to this conferral.
.17 The proposed amendments are in response to the constitutional questions
raised by the High Court in R v Hughes (2000) 171 ALR 155 regarding the
operation of co-operative schemes and are proposed to address concerns with
respect to conferrals under section 150F that there may be a constitutional
imperative for any duties imposed on Commonwealth bodies or officers to be
imposed by Commonwealth law. That is, it may not be sufficient that a
Commonwealth law merely consents to a state or territory law imposing a duty
on a Commonwealth body.
.18 Section 150F of the TP Act also consents to `powers and functions'
conferred by state or territory legislation in the Competition Code. In the
context of the Competition Code, such powers and functions are likely to be
characterised as duties.
.19 Section 150F will be amended to expressly provide for the imposition of
duties rather than merely functions and powers so as to avoid a potential
challenge to the Competition Code.
.20 This Bill is the second tranche of the amendments resulting from the
Hughes decision. Amendments to section 44ZZM and section 44ZZOA of the
TP Act formed part of the Trade Practices Legislation Amendment Act 2003.
.21 The amendments to section 150F of the TP Act ensure that the states can
confer duties on the Commission and the Tribunal as originally intended by the
Competition Code Agreement, and as they are of a minor or machinery of
government nature, and do not substantially alter existing arrangements, a
Regulation Impact Statement is not required.
Trade Practices Legislation Amendment Bill (No. 1) 2005 129
Schedule 11 -- Functions and powers etc under Competition Code
Item 1 -- Section 150A
.22 This inserts a definition for Commonwealth entity into Section 150A of the
TP Act. This definition is to improve the clarity of the Code and defines
Commonwealth entity as:
(a) an authority of the Commonwealth; or
(b) an officer of the Commonwealth.
Item 2 -- Section 150F
New section 150F Commonwealth consent to conferral of functions etc.
on Commonwealth entities
.23 This item repeals the existing section 150F and replaces it with new section
150F. Subsection 150F(1) provides that a state or territory application law may
confer functions or powers or impose duties on Commonwealth entities and
notes that section 150FB will set out when such a law imposes a duty on a
Commonwealth entity.
.24 Subsection 150F(2) provides that the Commonwealth does not authorise
consent to the conferral of functions if the conferral, or the imposition, or the
authorisation would contravene any constitutional doctrines restricting the
duties that may be imposed on a Commonwealth entity or if the authorisation
would exceed the legislative power of the Commonwealth.
.25 Subsection 150G(3) provides that a Commonwealth entity cannot perform
a duty or function, or exercise a power under an application law made under a
relevant state or territory law unless the conferral of the function or power, or
the imposition of the duty is in accordance with an agreement between the
Commonwealth and state or territory concerned.
New section 150FA How duty is imposed
.26 This new section provides how a duty will be imposed.
Application
.27 Subsection 150FA(1) finds that section 150A is applicable when an
application law made by a relevant state or territory purports to impose a duty
on a Commonwealth entity. It is noted that section 150FB sets out when an
application law imposes a duty on a Commonwealth entity.
130 Trade Practices Legislation Amendment Bill (No. 1) 2005
Schedule 11 -- Functions and powers etc under Competition Code
State or Territory legislative power sufficient to support duty
.28 Subsection 150FA(2) provides that state or territory legislative power is
sufficient to support the duty where the duty will be taken to be imposed by
force of the law of the state or territory (the Commonwealth having consented
under section 150F to the imposition of the duty by that law).
Commonwealth legislative power sufficient to support duty but State or
Territory legislative powers are not
.29 Subsections 150FA(3) to (5) provide that where Commonwealth legislative
power is sufficient to support the duty but state or territory legislative powers
are not, in order to ensure the validity of the purported imposition, the duty will
be taken to be imposed by Commonwealth law, through the Trade Practices
Amendment Act 2004.
.30 Subsection 150FA(6) provides that earlier subsections in 150FA do not
limit the scope of section 150F.
New section 150FB When an application law imposes a duty
.31 This new section provides that for the purposes of sections 150F and
150FA, an application law made by a relevant state or territory law imposes a
duty on a Commonwealth entity if:
(a) the law confers a function or power on the entity; and
(b) the circumstances in which the function or power is conferred give rise to
an obligation on the entity to perform the function or to exercise the
power.
Trade Practices Legislation Amendment Bill (No. 1) 2005 131
Schedule 12 -- Technical amendment
Gas Pipelines Access (Commonwealth) Act 1998
Item 1 -- Section 13 (note)
.1 This item fixes an incorrect cross reference.
Trade Practices Legislation Amendment Bill (No. 1) 2005 132
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