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2004--2005
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
THE SENATE
TRADE PRACTICES LEGISLATION AMENDMENT BILL (NO. 1) 2005
SUPPLEMENTARY EXPLANATORY MEMORANDUM
(CIRCULATED BY THE AUTHORITY OF THE TREASURER,
THE HON PETER COSTELLO, MP)
Table of Contents
OUTLINE ..............................................................................................................1
FINANCIAL IMPACT STATEMENT ........................................................................3
REGULATION IMPACT STATEMENT ....................................................................5
NOTES ON AMENDMENTS ....................................................................................7
Trade Practices Legislation Amendment Bill (No. 1) 2005 iii
1
Outline
1.1 The Trade Practices Legislation Amendment Bill (No. 1) 2005 (the Bill) as
introduced into the Senate implements the majority of recommendations of the
2003 Review of the Competition Provision of the Trade Practices Act (the
Dawson Review). The Dawson Review recommended that the Trade Practices
Act 1974 (the Act) be amended to improve its operation, specifically in relation
to the competition and authorisation provisions and the administration of the
Act.
1.2 The Bill will improve existing Australian Competition and Consumer
Commission (the Commission) and Australian Competition Tribunal (the
Tribunal) processes by providing for greater accountability, transparency, and
timeliness in decision making and reducing the regulatory burden on business.
1.3 In 2004, a similar bill -- the Trade Practices Legislation Amendment
Bill 2004 -- was introduced to implement the Government's response to the
Dawson Review. The previous bill lapsed as a result of the October 2004
federal election. The 2005 Bill was introduced into the House of
Representatives on 17 February 2005 containing a number of minor
amendments that enhance and clarified the operation of the provisions in the
previous legislation, without altering the broad substance of reform found in the
previous bill. The Bill was passed by the House on 10 March 2005, and
introduced into the Senate on the same day.
1.4 The Government has decided to make some further amendments to
enhance and clarify the new processes to be undertaken by the Commission and
the Tribunal in relation to the provisions in Schedule 1 (Merger clearances and
authorisations) and Schedule 3 (Collective bargaining). These amendments do
not represent any change in the broad substance of the policy in these Schedules
of the Bill.
Trade Practices Legislation Amendment Bill (No. 1) 2005 1
Outline
1.5 The amendments to Schedule 1 (Merger clearances and authorisations) and
Schedule 3 (Collective bargaining) will:
2 clarify the role of the Commission in the merger authorisation processes
by stating that the views of the Commission must be obtained and
considered by the Tribunal in relation to all merger authorisation
applications;
3 clarify the default decision if the Commission (or the Tribunal upon
review) fails to make a decision within the requisite time;
4 ensure that the Tribunal has all appropriate powers and procedures, and
sufficient flexibility of operation, to take on its new merger functions;
5 ensure that the Commission and the Tribunal have consistent powers for
both the initial application for merger clearance and merger authorisation,
as well as any variation, revocation or revocation and substitution of
merger clearances and merger authorisations; and
6 require that as soon as practicable after the Commission receives a
collective bargaining notice, it must notify the target of the collective
bargaining arrangement that the notice has been given and provide that
person with a copy of the notice.
6.1 The Government has also decided to amend Schedule 7 (Third line forcing
and exclusive dealing) to omit the provisions which were to remove the per se
prohibition of third line forcing and make third line forcing subject to a
substantial lessening of competition test. These amendments to Schedule 7 of
the Bill continue the current arrangements for third line forcing, that is, they
continue the status quo.
2 Trade Practices Legislation Amendment Bill (No. 1) 2005
1
Financial Impact Statement
1.1 Page 7 of the Explanatory Memorandum for the Bill indicates that the
financial implications arising from the passage of the Bill will be considered in
a budget context.
1.2 The 2005-06 Budget measure `Trade Practices Act 1974 --
implementation of the Dawson Amendments' provided the Commission with
additional funding of $20 million over four years, to implement and maintain
trade practices amendments recommended by the Dawson Review and
proposed in the Bill.
1.3 This 2005-06 Budget measure also provided $4.5 million over four years to
the Federal Court of Australia (Court) to extend the role of the Tribunal to
implement the reforms proposed in the Bill. This funding also provides for an
additional judge of the Court following the recent full time appointment of an
existing judge to the Tribunal.
1.4 The proposed Government amendments do not impose any additional
financial impact.
Trade Practices Legislation Amendment Bill (No. 1) 2005 3
1
Regulation Impact Statement
1.1 Page 9 of the Explanatory Memorandum for the Bill indicates that 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 Act.
1.2 Amendments to the Act that are not reflected in the Dawson Review did
not require a regulation impact statement as they are minor or machinery in
nature.
Trade Practices Legislation Amendment Bill (No. 1) 2005 5
1
Notes on Amendments
Amendments relating to Schedule 1 -- Merger Clearances
and Authorisations
1.1 Amendment No. 1: Procedure of Tribunal -- Schedule 1, item 6, page 4
(lines 1 and 2), omit the definition of proceedings in proposed section 29P,
substitute a new provision.
1.2 This amendment inserts in Schedule 1 to the Bill a new definition of
proceedings under section 29P to include applications for authorisations made
to the Tribunal under Subdivision C of Division 3 of Part VII and applications
to the Tribunal under section 111 to review Commission decisions on merger
clearances.
1.3 The effect of this amendment is that the provisions in Part III of the Act,
which relate to the governance of the Tribunal, will be applied to the Tribunal's
consideration of merger authorisation related applications (under Subdivision C
of Division 3 of Part VII) and to the Tribunal's review of the Commission's
merger clearance determinations (under Division 3 of Part IX).
1.4 Amendment No. 2: Procedure of Tribunal -- Schedule 1, items 7 and 8,
page 4 (lines 3 to 13), omit the items, substitute new items that amend
section 39 by inserting a new subsection 39(2).
1.5 The current Items 7 and 8 in the Bill would have required the Tribunal to
establish separate Divisions to consider an application for the review of a
merger clearance and an application for a merger authorisation, even if the
applications related to the one acquisition. Omitting this requirement from the
Bill will allow a single Division of the Tribunal, where appropriate, to consider
such applications together, should such a situation arise. This will allow the
Tribunal to operate to its maximum level of efficiency and flexibility.
Trade Practices Legislation Amendment Bill (No. 1) 2005 7
Notes on Amendments
1.6 The new Items 7 and 8 will amend section 39 of the Act, which enables the
President of the Tribunal to give directions as to the arrangement of the
business of Tribunal and the constitution of Divisions of the Tribunal, by
adding a new subsection (2). The new subsection will empower the President of
the Tribunal to give directions to the Deputy Presidents of the Tribunal (that is,
the other presidential members of the Tribunal) with respect to matters of
procedure in proceedings before the Tribunal.
1.7 The effect of these amendments, when combined with the amendments to
section 103 made by Items 34 and 34A (see Amendment No. 40), is to
maximise the ability of the Tribunal to operate flexibly and efficiently in
relation to matters of procedure, by allowing any presidential member of the
Tribunal to address procedural issues in any proceeding before the Tribunal,
subject to any direction the President may give. Such flexibility is essential if
the Tribunal is to meet its various statutory obligations to make determinations
within a fixed time.
1.8 Amendment No. 3: Enforceable undertaking -- Schedule 1, item 27,
page 12 (line 34), omit "make", substitute "give".
1.9 The effect of subsection 95AE(2), as modified by this amendment and
when taken in conjunction with the amendment made by Item 21 of Schedule 1,
is that the Commission may accept a written undertaking under section 87B,
given by the applicant pursuant to a requirement in the regulations, that the
applicant will not make an acquisition while an application for a clearance in
relation to that acquisition is being considered by the Commission. Such an
undertaking is given by a person for the purposes of section 87B in connection
with a clearance under Division 3 of Part VII.
1.10 Amendment No. 4: Timing of information -- Schedule 1, item 27,
page 15 (line 17) after `Commission', insert, `, within a specified period,'.
1.11 The effect of this amendment will be that, in requesting additional
information from an applicant for a clearance, the Commission may specify that
the additional information must be provided within a specified period.
Providing the Commission with a power to determine when requested
information is to be provided is essential if the Commission is to properly
consider any information received and make its determination on the
application within the time specified by section 95AO.
1.12 Amendment No. 5: Timing of information -- Schedule 1, item 27,
page 15 (lines 20 to 23) omit proposed section 95AK, substitute a new
section 95AK.
1.13 Subsection 95AK(1) provides that the Commission may give a written
notice requesting that a person provide particular information relevant to the
8 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
making of a determination on a clearance application. The written notice may
require any information to be provided within a specified period. Providing the
Commission with a power to determine when requested information is to be
provided is essential if the Commission is to properly consider any information
received and make its determination on the application within the time specified
by section 95AO.
1.14 Subsection 95AK(2) provides that the Commission may consult with such
persons it considers appropriate for the purposes for making a determination on
an application. Information obtained by the Commission from a consultation is
information obtained by the Commission during the course of its consultation
with a person (for example, during a meeting between a person and the
Commission, its staff or its representatives). Unsolicited information provided
to the Commission by a person after a consultation with the Commission has
ended (for example, after a meeting between a person and the Commission, its
staff or its representatives has ended) is not information obtained by the
Commission from a consultation.
1.15 Amendment No. 6: Determination of clearance application --
Schedule 1, item 27, page 16 (lines 4 to 7), omit subsection 95AM(2), substitute
new subsections 95AM(2) and 95AM(2A).
1.16 Subsection 95AM(2) provides that the Commission, in making its
determination to grant a clearance or to refuse to grant a clearance, must take
into account: any submissions it has received within the period specified under
paragraph 95AG(b); any information requested from an applicant under
section 95AJ and received within the period specified in the relevant notice
under that section; any information received from a person under
subsection 95AK(1) within the period specified in the relevant notice under that
subsection, and any information obtained from consultations pursuant to
subsection 95AK(2).
1.17 The effect of subsection 95AM(2) is that where information is requested
to be provided to the Commission within a specified period and it is received
within that period it must be taken into account by the Commission in making
its determination. However, in making its determination the Commission may
also take account of other relevant information, such as, information provided
by other regulators, trade or other statistical data and information provided late.
1.18 Subsection 95AM(2A) provides that the Commission, in making its
determination to grant a clearance or to refuse to grant a clearance, may
disregard: any submissions it has received after the period specified under
paragraph 95AG(b); any information requested from an applicant under
section 95AJ and received after the period specified in the relevant notice under
that section; and any information received from a person under
Trade Practices Legislation Amendment Bill (No. 1) 2005 9
Notes on Amendments
subsection 95AK(1) after the period specified in the relevant notice under that
subsection.
1.19 The effect of subsection 95AM(2A) is that where information has been
requested to be provided to the Commission within a specified period and it is
received late the Commission may disregard it. Information disregarded by the
Commission is not taken into account in the making of its determination. As a
result, if an application is made to the Tribunal under section 111 for a review
of the Commission's determination, the information disregarded by the
Commission in the making of that determination is not to be provided to the
Tribunal (for the purposes of its review) under section 113.
1.20 Amendment No. 7: Deemed determination of Commission --
Schedule 1, item 27, page 16 (line 22), omit `refused', substitute `made a
determination refusing'.
1.21 The effect of this amendment is that if the Commission does not make a
determination on an application for an initial clearance within the prescribed
timeframe, the default decision is deemed to be a determination by the
Commission to refuse the application. The applicant will then have standing to
apply to the Tribunal under section 111 for a review of the deemed
determination to refuse the clearance.
1.22 Amendment No. 8: Enforceable undertaking -- Schedule 1, item 27,
page 18 (after line 12), after subsection 95AR(2), inserts a new
subsection 95AR(2A) providing that the regulations may prescribe that the
application form for a minor variation contain a requirement that the applicant
give an undertaking under section 87B that the applicant will not make the
acquisition while the application for minor variation to a clearance is being
considered by the Commission.
1.23 The effect of this amendment, when taken in conjunction with the
amendment made by Item 21 of Schedule 1, is that the Commission may accept
a written undertaking under section 87B, given by the applicant pursuant to a
requirement in the regulations, that the applicant will not make an acquisition
while a minor variation to a clearance in relation to that acquisition is being
considered by the Commission. Such an undertaking is given by a person for
the purposes of section 87B in connection with a clearance under Division 3 of
Part VII.
1.24 Amendment No. 9: Determination of application for minor variation
of clearance -- Schedule 1, item 27, page 18 (line 28) to page 19 (line 3), omit
subsection 95AR(5), substitute new subsections 95AR(5), (5A), and (5B).
1.25 Subsection 95AR(5) provides that the Commission must make a
determination varying the clearance or refusing to vary the clearance.
10 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
1.26 Subsection 95AR(5A) provides that the Commission, in making its
determination, must take into account: any submissions it has received within
the period specified under subsection (4); any information requested from an
applicant under section 95AJ and received within the period specified in the
relevant notice under that section (as applied because of subsection 95AR(11));
any information received from a person under subsection 95AK(1) within the
period specified in the relevant notice under that subsection (as applied because
of subsection 95AR(11)), and any information obtained from consultations
pursuant to subsection 95AK(2) (as applied because of subsection 95AR(11)).
1.27 The effect of subsection 95AR(5A) is that where information is requested
to be provided to the Commission within a specified period and it is received
within that period it must be taken into account by the Commission in making
its determination. However, in making its determination the Commission may
also take account of other information, such as, information provided by other
regulators, trade or other statistical data and information provided late.
1.28 Subsection 95AR(5B) provides that the Commission, in making its
determination, may disregard: any submissions it has received after the period
specified under subsection (4); any information requested from an applicant
under section 95AJ and received after the period specified in the relevant notice
under that section (as applied because of subsection 95AR(11)); and any
information received from a person under subsection 95AK(1) after the period
specified in the relevant notice under that subsection (as applied because of
subsection 95AR(11)).
1.29 The effect of subsection 95AR(5B) is that where information has been
requested to be provided to the Commission within a specified period and it is
received late the Commission may disregard it. Information disregarded by the
Commission is not taken into account in the making of its determination. As a
result, if an application is made to the Tribunal under section 111 for a review
of the Commission's determination, the information disregarded by the
Commission in the making of that determination is not to be provided to the
Tribunal (for the purposes of its review) under section 113.
1.30 Amendment No. 10: Clearance variations -- Schedule 1, item 27,
page 19 (after line 9), after subsection 95AR(6) insert a new
subsection 95AR(6A).
1.31 Subsection 95AR(6A) provides that the Commission may also vary the
conditions (if any) of the clearance to take account of the variation of the
clearance.
1.32 The effect of this amendment is that the Commission is empowered to
modify conditions imposed under section 95AP on an initial merger clearance
Trade Practices Legislation Amendment Bill (No. 1) 2005 11
Notes on Amendments
granted under section 95AM to the extent necessary to take account of any
minor variation made to such a clearance.
1.33 Amendment No. 11: Deemed determination of Commission --
Schedule 1, item 27, page 19 (line 14), omit `refused' substitute `made a
determination refusing'.
1.34 The effect of this amendment is that if the Commission does not make a
determination on an application for the variation of a clearance within the
prescribed timeframe, the default decision is deemed to be a determination by
the Commission to refuse the application. The applicant will then have standing
to apply to the Tribunal under section 111 for a review of the deemed
determination to refuse the variation of a clearance.
1.35 Amendment No. 12: Powers of Commission -- Schedule 1, item 27,
page 20 (after line 3), at the end of section 95AR, add a new
subsection 95AR(11).
1.36 The effect of this amendment is that the Commission may, in considering
an application for a minor variation to a clearance, request additional
information from the applicant under section 95AJ and request particular
information from, and consult with, persons under section 95AK.
1.37 Amendment No. 13: Enforceable undertaking -- Schedule 1, item 27,
page 20 (after line 17), after subsection 95AS(2), insert a new
subsection 95AS(2A) providing that the regulations may prescribe that the
application form (specified in subsection 95AS(2)) for a revocation, or
revocation and substitution, of a clearance contain a requirement that the
applicant give an undertaking under section 87B that the applicant will not
make the acquisition while the application for revocation, or revocation and
substitution, of a clearance is being considered by the Commission.
1.38 The effect of this amendment, when taken in conjunction with the
amendment made by Item 21 of Schedule 1, is that the Commission may accept
a written undertaking under section 87B, given by the applicant pursuant to a
requirement in the regulations, that the applicant will not make an acquisition
while an application for a revocation, or revocation and substitution, of a
clearance in relation to that acquisition is being considered by the Commission.
Such an undertaking is given by a person for the purposes of section 87B in
connection with a clearance under Division 3 of Part VII.
1.39 Amendment No. 14: Determination of application for revocation of
clearance -- Schedule 1, item 27, page 21 (lines 18 to 27), omit
subsection 95AS(7), substitute new subsections 95AS(7), (7A) and (7B).
12 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
1.40 Subsection 95AS(7) provides that the Commission must make a
determination revoking the clearance, or revoking the clearance and
substituting a new clearance for the one revoked, or refusing to revoke the
clearance.
1.41 Subsection 95AS(7A) provides that the Commission, in making its
determination, must take into account: any submissions invited under
subsections (4) or (6) that are received within the period specified under that
subsection; any information requested from an applicant under section 95AJ
and received within the period specified in the relevant notice under that
section (as applied because of subsection 95AS(13)); any information received
from a person under subsection 95AK(1) within the period specified in the
relevant notice under that subsection (as applied because of
subsection 95AS(13)), and any information obtained from consultations
pursuant to subsection 95AK(2) (as applied because of subsection 95AS(13)).
1.42 The effect of subsection 95AS(7A) is that where information is requested
to be provided to the Commission within a specified period and it is received
within that period it must be taken into account by the Commission in making
its determination. However, in making its determination the Commission may
also take account of other information, such as, information provided by other
regulators, trade or other statistical data and information provided late.
1.43 Subsection 95AS(7B) provides that the Commission, in making its
determination, may disregard: any submissions invited under subsections (4) or
(6) that it has received after the period specified under that subsection; any
information requested from an applicant under section 95AJ and received after
the period specified in the relevant notice under that section (as applied because
of subsection 95AS(13)); and any information received from a person under
subsection 95AK(1) after the period specified in the relevant notice under that
subsection (as applied because of subsection 95AS(13)).
1.44 The effect of subsection 95AS(7B) is that where information has been
requested to be provided to the Commission within a specified period and it is
received late the Commission may disregard it. Information disregarded by the
Commission is not taken into account in the making of its determination. As a
result, if an application is made to the Tribunal under section 111 for a review
of the Commission's determination, the information disregarded by the
Commission in the making of that determination is not to be provided to the
Tribunal (for the purposes of its review) under section 113.
1.45 Amendment No. 15: Deemed determination of Commission --
Schedule 1, item 27, page 22 (line 15), omit `refused', substitute `made a
determination refusing'.
Trade Practices Legislation Amendment Bill (No. 1) 2005 13
Notes on Amendments
1.46 The effect of this amendment is that if the Commission does not make a
determination on an application for the revocation, or the revocation and
substitution, of a clearance within the prescribed timeframe, the default
decision is deemed to be a determination by the Commission to refuse the
application. The applicant will then have standing to apply to the Tribunal
under section 111 for a review of the deemed determination to refuse the
revocation, or revocation and substitution, of a clearance.
1.47 Amendment No. 16: Powers of Commission; substituted clearances --
Schedule 1, item 27, page 22 (after line 25), at the end of section 95AS add two
new subsections 95AS(13) and 95AS(14).
1.48 Subsection 95AS(13) provides that the Commission may, in considering
an application for the revocation (or revocation and substitution) of a clearance
request additional information from the applicant under section 95AJ and may
request particular information from, and consult with, persons under
section 95AK.
1.49 Subsection 95AS(14) provides that the Commission may grant a
substituted clearance subject to such conditions as may be imposed under
section 95AP (for example, including a condition that the applicant give an
undertaking to the Commission under section 87B in specified terms). The
subsection also provides that a substituted clearance will take effect in a manner
consistent with a clearance granted under section 95AM and that the
Commission may specify when a substituted clearance is in force.
1.50 Amendment No. 17: Procedure of Tribunal -- Schedule 1, item 27,
page 22 (line 31), omit `Note' substitute `Note 1'.
1.51 This is a consequential amendment due to the addition of another note by
Amendment No. 18.
1.52 Amendment No. 18: Procedure of Tribunal -- Schedule 1, item 27,
page 22 (after line 34), at the end of subsection 95AT(1) add a note regarding
the procedure of the Tribunal.
1.53 The effect of this amendment will be that, in requesting additional
information from an applicant for an authorisation clearance, the Tribunal may
specify that the additional information must be provided within a specified
period. Providing the Commission with a power to determine when requested
information is to be provided is essential if the Commission is to properly
consider any information received and make its determination on the
application within the time specified by section 95AO.
1.54 Amendment No. 19: Enforceable undertaking -- Schedule 1, item 27,
page 23 (line 26), omit "make", substitute "give".
14 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
1.55 The effect of subsection 95AV(2), as modified by this amendment and
when taken in conjunction with the amendment made by Item 21 of Schedule 1,
is that the Commission may accept a written undertaking under section 87B,
given by the applicant pursuant to a requirement in the regulations, that the
applicant will not make an acquisition while an application for an authorisation
in relation to that acquisition is being considered by the Tribunal. Such an
undertaking is given by a person for the purposes of section 87B in connection
with an authorisation under Division 3 of Part VII.
1.56 Amendment No. 20: Procedure of Tribunal -- Schedule 1, item 27,
page 26 (lines 12 to 23), section 95AZB to be opposed.
1.57 Section 95AZB is to be opposed as it will be superfluous if the changes to
the Bill made by Amendment Nos. 1, 29, 35 and 40 are proceeded with. Section
95AZB replicates section 103 of the Act, which is now to apply (as amended)
to merger-authorisation related applications under Subdivision C of Division 3
of Part VII by virtue of Amendment No. 40.
1.58 Amendment No. 21: Timing of information -- Schedule 1, item 27,
page 26 (line 26), after `Tribunal', insert `, within a specified period'.
1.59 The effect of this amendment is that, in requesting under section 95AZC
that an applicant for a merger authorisation provide additional information, the
Tribunal may specify that the additional information must be provided within a
specified period. Providing the Tribunal with a power to determine when
requested information is to be provided is essential if the Tribunal is to properly
consider any information received and make its determination on the
application within the time specified by section 95AZI.
1.60 This amendment does not prevent the Tribunal from using its procedure
or any of its procedural powers provided for under Division 2 of Part IX of the
Act or the regulations.
1.61 Amendment No. 22: Timing of information; disclosure of information
-- Schedule 1, item 27, page 26 (lines 28 to 31), omit section 95AZD,
substitute a new section 95AZD.
1.62 Subsection 95AZD(1) provides that the Tribunal may give a written
notice requesting that a person provide particular information relevant to the
making of a determination on an authorisation application. The written notice
may require any information to be provided within a specified period.
Providing the Tribunal with a power to determine when requested information
is to be provided is essential if the Tribunal is to properly consider any
information received and make its determination on the application within the
time specified by section 95AZI.
Trade Practices Legislation Amendment Bill (No. 1) 2005 15
Notes on Amendments
1.63 Subsection 95AZD(2) provides that the Tribunal may consult with such
persons it considers appropriate for the purposes for making a determination on
an application. Information obtained by the Tribunal from a consultation is
information obtained by the Tribunal during the course of its consultation with
a person, for example, during a meeting between a person and the Tribunal.
Unsolicited information provided to the Tribunal by a person after a
consultation with the Tribunal has ended (for example, after a meeting between
a person and the Tribunal) is not information obtained by the Tribunal from a
consultation.
1.64 Subsection 95AZD(3) provides the Tribunal with a power to disclose
information that is excluded from the merger authorisation register under
subsection 95AZA(3), (4) or (7) to such persons and on such terms as the
Tribunal considers appropriate for the purpose of determining an application.
1.65 Section 95AZD does not prevent the Tribunal from using its procedure or
any of its procedural powers provided for under Division 2 of Part IX of the Act
or the regulations.
1.66 Amendment No 23: Tribunal must require Commission to give report
-- Schedule 1, Item 27, page 27 (after line 3), after section 95AZE, insert a new
section 95AZEA.
1.67 Section 95AZEA provides that the member of the Tribunal presiding on a
merger authorisation application must require the Commission to give a report
to the Tribunal, in relation to matters specified by that member, and within the
period specified by that member.
1.68 The effect of section 95AZEA, in combination with Amendment Nos. 31
and 37, is that the Commission must provide a report on every application for
authorisation, minor variation of an authorisation and revocation or revocation
and substitution of an authorisation that comes before the Tribunal.
1.69 Amendment No. 24: Commission may make enquiries -- Schedule 1,
item 27, page 27 (after line 8), after section 95AZF, insert a new
section 95AZFA.
1.70 Section 95AZFA allows the Commission to make any enquiries it
considers reasonable and appropriate to enable it to provide a report or other
information to the Tribunal in relation to an authorisation application. This
provision does not empower the Commission to compel information to be
provided. Any responses to enquiries made by the Commission are to be
voluntary.
16 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
1.71 Amendment No. 25: Determination on authorisation application --
Schedule 1, item 27, page 27 (lines 16 to 19), omit subsection 95AZG(2),
substitute new subsections 95AZG(2) and (2A).
1.72 Subsection 95AZG(2) provides that the Tribunal, in making its
determination to grant an authorisation or to refuse to grant an authorisation,
must take into account: any submissions it has received within the period
specified under paragraph 95AY(b); any information requested from an
applicant under section 95AZC and received within the period specified in the
relevant notice under that section; any information received from a person
under subsection 95AZD(1) within the period specified in the relevant notice
under that subsection, any information obtained from consultations pursuant to
subsection 95AZD(2); the report given to it by the Commission under
section 95AZEA; and any information or report given to it by the Commission
under section 95AZF.
1.73 The effect of subsection 95AZG(2) is that where information is requested
to be provided to the Tribunal within a specified period pursuant to
section 95AY, 95AZC or 95AZD and the information is received within that
period it must be taken into account by the Tribunal in making its
determination. Any reports or information received by the Tribunal from the
Commission must also be taken into account in making its determination.
However, the Tribunal may also take account of other relevant information,
such as, information obtained through the use of any of the Tribunal's
procedural powers provided for under Division 2 of Part IX of the Act or the
regulations, information provided by other regulators, trade or other statistical
data and information provided late.
1.74 Subsection 95AZG(2A) provides that the Tribunal, in making its
determination to grant an authorisation or to refuse to grant an authorisation,
may disregard: any submissions it has received after the period specified under
paragraph 95AY(b); any information requested from an applicant under
section 95AZC and received after the period specified in the relevant notice
under that section; and any information received from a person under
subsection 95AZD(1) after the period specified in the relevant notice under that
subsection.
1.75 The effect of subsection 95AZG(2A) is that where information has been
requested to be provided to the Tribunal within a specified period pursuant to
section 95AY, 95AZC or 95AZD and the information is received late the
Tribunal may disregard it in making its determination to grant an authorisation
or refuse to grant an authorisation.
1.76 Amendment No. 26: Enforceable undertaking -- Schedule 1, item 27,
page 29 (after line 24), after subsection 95AZL(2), insert a new
subsection 95AZL(2A), providing that the regulations may prescribe that the
Trade Practices Legislation Amendment Bill (No. 1) 2005 17
Notes on Amendments
application form for a minor variation contain a requirement that the applicant
give an undertaking under section 87B that the applicant will not make the
acquisition while the application for minor variation to an authorisation is being
considered by the Tribunal.
1.77 The effect of this amendment, when taken in conjunction with the
amendment made by Item 21 of Schedule 1, is that the Commission may accept
a written undertaking under section 87B, given by the applicant pursuant to a
requirement in the regulations, that the applicant will not make an acquisition
while a minor variation to an authorisation in relation to that acquisition is
being considered by the Tribunal. Such an undertaking is given by a person for
the purposes of section 87B in connection with an authorisation under
Division 3 of Part VII.
1.78 Amendment No. 27: Determination of application for minor variation
of authorisation -- Schedule 1, item 27, page 30 (lines 12 to 19), omit
subsection 95AZL(6) substitute new subsections (6), (6A) and (6B).
1.79 Subsection 95AZL(6) provides that the Tribunal must make a
determination varying the authorisation or refusing to vary the authorisation.
1.80 Subsection 95AZL(6A) provides that the Tribunal, in making its
determination, must take into account: any submissions it has received within
the period specified under paragraph 95AY(b); any information requested from
an applicant under section 95AZC and received within the period specified in
the relevant notice under that section (as applied because of
subsection 95AZL(13)); any information received from a person under
subsection 95AZD(1) within the period specified in the relevant notice under
that subsection (as applied because of subsection 95AZL(13)), any information
obtained from consultations pursuant to subsection 95AZD(2) (as applied
because of subsection 95AZL(13)); the report given to it by the Commission
under section 95AZEA (as applied because of subsection 95AZL(13)); and any
information or report given to it by the Commission under section 95AZF (as
applied because of subsection 95AZL(13)).
1.81 The effect of subsection 95AZL(6A) is that if information is requested to
be provided to the Tribunal within a specified period pursuant to section 95AY,
95AZC or 95AZD and the information is received within that period it must be
taken into account by the Tribunal in making its determination. Any reports or
information received by the Tribunal from the Commission must also be taken
into account in making its determination. However, the Tribunal may also take
account of other relevant information, such as, information obtained through
the use of any of the Tribunal's procedural powers provided for under
Division 2 of Part IX of the Act or the regulations, information provided by
other regulators, trade or other statistical data and information provided late.
18 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
1.82 Subsection 95AZL(6B) provides that the Tribunal, in making its
determination, may disregard: any submissions it has received after the period
specified under paragraph 95AY(b); any information requested from an
applicant under section 95AZC and received after the period specified in the
relevant notice under that section (as applied because of
subsection 95AZL(13)); and any information received from a person under
subsection 95AZD(1) after the period specified in the relevant notice under that
subsection (as applied because of subsection 95AZL(13)).
1.83 The effect of subsection 95AZL(6B) is that if information has been
requested to be provided to the Tribunal within a specified period pursuant to
section 95AY, 95AZC or 95AZD and the information is received late the
Tribunal may disregard it in making its determination to vary an authorisation
or to refuse to vary an authorisation.
1.84 Amendment No. 28: Authorisation variations -- Schedule 1, item 27,
page 30 (after line 25), after subsection 95AZL(7) insert an new
subsection 95AZL(7A).
1.85 Subsection 95AZL(7A) provides that the Tribunal may also vary the
conditions (if any) of the authorisation to take account of the variation of the
authorisation.
1.86 The effect of this amendment is that the Tribunal is empowered to modify
conditions imposed under section 95AZJ on an initial merger authorisation
granted under section 95AZG to the extent necessary to take account of any
minor variation made to such an authorisation.
1.87 Amendment No. 29: Procedure of Tribunal - Schedule 1, item 27,
page 31 (line 29), omit paragraph 95AZL(13)(a).
1.88 This is a consequential amendment following the omission of
section 95AZB from the Bill by Amendment No. 20.
1.89 Amendment No. 30: Timing of information; disclosure of information
-- Schedule 1, item 27, page 31 (line 32), omit `consult others', substitute `seek
further information and consult others etc'.
1.90 This is a consequential amendment following the amendment of
section 95AZD by Amendment No. 22.
1.91 Amendment No. 31: Tribunal must require Commission to give
report -- Schedule 1, item 27, page 31(after line 32), after
paragraph 95AZL(13)(c) insert a new paragraph (ca).
Trade Practices Legislation Amendment Bill (No. 1) 2005 19
Notes on Amendments
1.92 This is a consequential amendment following the insertion of new
section 95AZEA (by Amendment No. 23) ensuring that the member of the
Tribunal presiding on an application for the minor variation of an authorisation
must require the Commission to give a report to the Tribunal, in relation to
matters specified by that member, and within the period specified by that
member.
1.93 Amendment No 32: Commission may make enquiries -- Schedule 1,
item 27, page 31 (after line 33), at the end of subsection 95AZL(13), add a new
paragraph 95AZL(13)(e).
1.94 This is a consequential amendment following the insertion of new
section 95AZFA (by Amendment No. 24) ensuring that the Commission is
empowered to make any enquiries it considers reasonable and appropriate to
enable it to provide a report or other information to the Tribunal in relation to
an application for the minor variation of an authorisation.
1.95 Amendment No 33: Enforceable undertaking -- Schedule 1, item 27,
page 32 (after line 15), after subsection 95AZM(2), insert a new
subsection 95AZM(2A) providing that the regulations may prescribe that the
application form for a revocation, or revocation and substitution, of an
authorisation contain a requirement that the applicant give an undertaking under
section 87B that the applicant will not make the acquisition while the
application for revocation, or revocation and substitution, of an authorisation is
being considered by the Tribunal.
1.96 The effect of this amendment, when taken in conjunction with the
amendment made by Item 21 of Schedule 1, is that the Commission may accept
a written undertaking under section 87B, given by the applicant pursuant to a
requirement in the regulations, that the applicant will not make an acquisition
while an application for a revocation, or revocation and substitution, of an
authorisation in relation to that acquisition is being considered by the Tribunal.
Such an undertaking is given by a person for the purposes of section 87B in
connection with an authorisation under Division 3 of Part VII.
1.97 Amendment No. 34: Determination of application for revocation of
authorisation -- Schedule 1, item 27, page 33 (lines 24 to 33), omit
subsection 95AZM(8), substitute new subsections 95AZM(8), (8A) and (8B).
1.98 Subsection 95AZM(8) provides that the Tribunal must make a
determination revoking (or revoking and substituting) an authorisation or
refusing to revoke an authorisation.
1.99 Subsection 95AZM(8A) provides that the Tribunal, in making its
determination, must take into account: any submissions invited under
subsection (5) or (7) that are received within the period specified under that
20 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
subsection; any information requested from an applicant under section 95AZC
and received within the period specified in the relevant notice under that
section (as applied because of subsection 95AZM(15)); any information
received from a person under subsection 95AZD(1) within the period specified
in the relevant notice under that subsection (as applied because of
subsection 95AZM(15)), any information obtained from consultations pursuant
to subsection 95AZD(2) (as applied because of subsection 95AZM(15)); the
report given to it by the Commission under section 95AZEA (as applied
because of subsection 95AZM(15)); and any information or report given to it
by the Commission under section 95AZF (as applied because of
subsection 95AZM(15)).
1.100 The effect of subsection 95AZM(8A) is that if information is requested
to be provided to the Tribunal within a specified period pursuant to
section 95AY, 95AZC or 95AZD and the information is received within that
period it must be taken into account by the Tribunal in making its
determination. Any reports or information received by the Tribunal from the
Commission must also be taken into account in making its determination.
However, the Tribunal may also take account of other relevant information,
such as, information obtained through the use of any of the Tribunal's
procedural powers provided for under Division 2 of Part IX of the Act or the
regulations, information provided by other regulators, trade or other statistical
data and information provided late.
1.101 Subsection 95AZM(8B) provides that the Tribunal, in making its
determination, may disregard: any submissions it has received after the period
specified under paragraph 95AY(b); any information requested from an
applicant under section 95AZC and received after the period specified in the
relevant notice under that section (as applied because of
subsection 95AZM(15)); and any information received from a person under
subsection 95AZD(1) after the period specified in the relevant notice under that
subsection (as applied because of subsection 95AZM(15)).
1.102 The effect of subsection 95AZM(8B) is that if information has been
requested to be provided to the Tribunal within a specified period pursuant to
section 95AY, 95AZC or 95AZD and the information is received late the
Tribunal may disregard it in making its determination to revoke (or revoke and
substitute) an authorisation or to refuse to revoke an authorisation.
1.103 Amendment No. 35: Procedure of Tribunal -- Schedule 1, item 27,
page 35 (line 10), omit paragraph 95AZM(15)(a).
1.104 This is a consequential amendment following the omission of
section 95AZB from the Bill by Amendment No. 20.
Trade Practices Legislation Amendment Bill (No. 1) 2005 21
Notes on Amendments
1.105 Amendment No. 36: Timing of information; disclosure of
information -- Schedule 1, item 27, page 35 (line 13), omit `consult others',
substitute `seek further information and consult others etc.'.
1.106 This is a consequential amendment following the amendment of
section 95AZD by Amendment No. 22.
1.107 Amendment No. 37: Tribunal must require Commission to give
report -- Schedule 1, item 27, page 35 (line 13), insert a new
paragraph 95AZM(15)(ca).
1.108 This is a consequential amendment following the insertion of new
section 95AZEA (by Amendment No. 23) ensuring that the member of the
Tribunal presiding on an application for the revocation or revocation and
substitution of an authorisation must require the Commission to give a report to
the Tribunal, in relation to matters specified by that member, and within the
period specified by that member.
1.109 Amendment No. 38: Commission may make enquiries -- Schedule 1
item 27, page 35 (after line 14), at the end of subsection 95AZM(15) insert a
new paragraph 95AZM(15)(e).
1.110 This is a consequential amendment following the insertion of new
section 95AZFA (by Amendment No. 24) ensuring that the Commission is
empowered to make any enquiries it considers reasonable and appropriate to
enable it to provide a report or other information to the Tribunal in relation to
an application for the revocation or revocation and substitution of an
authorisation.
1.111 Amendment No. 39: Substituted authorisations -- Schedule 1,
item 27, page 35 (after line 14), at the end of section 95AZM, add a new
subsection 95AZM(16).
1.112 Subsection 95AZM(16) provides that the Tribunal may grant a
substituted authorisation subject to such conditions as may be imposed under
section 95AZJ (for example, including a condition that the applicant give an
undertaking to the Commission under section 87B in specified terms). The
subsection also provides that a substituted authorisation will take effect in a
manner consistent with an authorisation granted under section 95AZG and that
the Tribunal may specify when a substituted authorisation is in force.
1.113 Amendment No. 40: Procedure of Tribunal -- Schedule 1 items 33
and 34, page 36 (lines 12 to 20), omit the items, substitute new items 33, 34 and
34A dealing with the procedure of the Tribunal.
22 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
1.114 New Item 33 inserts a new section 102A that provides a definition of
`proceedings' for the purposes of Division 2 of Part IX. The new definition
specifies that proceedings are to include applications made to the Tribunal
under Subdivision C of Division 3 of Part VII and applications made to the
Tribunal under Division 3 of Part IX.
1.115 The effect of this amendment is that the Tribunal's procedure and
procedural powers provided for in Division 2 of Part IX will apply to all
applications in relation to merger authorisations and all applications for the
review of the Commissions determinations on merger clearance related
applications. For example: the Tribunal is able to determine its own procedure,
subject to the Act and the regulations (paragraph 103(1)(a)); the rules of
evidence do not apply (paragraph 103(2)(c)); evidence may be taken on oath or
affirmation (section 105); and, subject to subsection 106(2), the hearing of
proceedings before the Tribunal shall be in public (subsection 106(1)).
1.116 New Item 34 amends subsection 103(2) substituting a `presidential
member' for `the Tribunal constituted by a presidential member'.
1.117 New Item 34A adds a new subsection 103(3) providing that the powers
of the Tribunal with respect to matters of procedure in particular proceedings
may be exercised by a presidential member of the Tribunal whether or not the
Tribunal has been constituted under section 37 in relation to the proceedings
and, once the Tribunal is so constituted, whether or not that member is part of
the Division of the Tribunal so constituted.
1.118 The effect of the amendments made by Items 34 and 34A, when taken
together, will be to maximise the ability of the Tribunal to operate flexibly and
efficiently in relation to matters of procedure, by allowing any presidential
member of the Tribunal to address procedural issues in any proceeding before
the Tribunal, subject to any direction the President may give under
subsection 39(2) (as provided for in Amendment No. 2). Such flexibility is
essential if the Tribunal is to meet its various statutory obligations to make
determinations within a fixed time.
1.119 Amendment No. 41: Enforceable undertaking -- Schedule 1, item 36,
page 37 (after line 22), after subsection 111(2), insert a new subsection 111(2A)
providing that the regulations may prescribe that the application form for a
review of a determination by the Commission in relation to a merger clearance
contain a requirement that the applicant give an undertaking under section 87B
that the applicant will not make the acquisition while the application for review
is being considered by the Tribunal.
1.120 The effect of this amendment, when taken in conjunction with the
amendment made by Item 21 of Schedule 1, is that the Commission may accept
a written undertaking under section 87B, given by the applicant pursuant to a
Trade Practices Legislation Amendment Bill (No. 1) 2005 23
Notes on Amendments
requirement in the regulations, that the applicant will not make an acquisition
while an application for review is being considered by the Tribunal. Such an
undertaking is given by a person for the purposes of section 87B in connection
with a clearance under Division 3 of Part VII.
1.121 Amendment No. 42: Procedure of Tribunal -- Schedule 1, item 36,
page 37 (after line 24), at the end of new subsection 111(3) add a note that
Division 2 contains provisions about procedure and evidence that relate to
proceedings before the Tribunal.
1.122 This note indicates that the Tribunal's procedure and procedural powers,
as provided for in Division 2 of Part IX of the Act, will apply to all merger-
related proceedings (as a result of Amendment No. 40 to the Bill which
provides, in part, for a new definition of `proceedings' to be provided in
relation to the provisions in Division 2 of Part IX).
1.123 Amendment No. 43: Commission to give information to Tribunal --
Schedule 1, item 36, page 38 (lines 5 to 9), omit subsection 113(1), substitute
new subsections 113(1) and 113(1A).
1.124 Subsection 113(1) requires the Commission to provide the Tribunal with
all information the Commission took into account in connection with the
making of a determination to which the review relates.
1.125 The effect of subsection 113(1) is that the Commission is only to pass
information to the Tribunal that it took into account in making determinations
under subsections 95AM(1), 95AR(5) and 95AS(7). Subsections 95AM(2),
95AR(5A) and 95AS(7A), respectively, require that certain information must
be taken into account and this information must, therefore, be passed to the
Tribunal. Other information taken into account by the Commission must also be
passed to the Tribunal. In contrast, information disregarded pursuant to
subsections 95AM(2A), 95AR(5B) and 95AS(7B), respectively, is not
information that is taken into account and this information must not, therefore,
be passed to the Tribunal.
1.126 These amendments reinforce that the Tribunal's review is not a review
de novo. Rather, it is akin to a `review on the papers'. Consequently, only
information that was taken into account by the Commission at first instance is
to be passed to the Tribunal.
1.127 Subsection 113(1A) requires the Commission to identify all such
information which was excluded from the merger clearance register under
subsections 95AI(3), (4) or (7).
24 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
1.128 The effect of subsection 113(1A) is that Tribunal is to be advised by the
Commission of information passed to it under subsection 113(1) that was
excluded from the merger clearance register because of its confidential nature.
1.129 Amendment No. 44: Commission to give information to Tribunal --
Schedule 1, item 36, page 38 (after line 12), after the definition of business day
in subsection 113(2) insert a new definition.
1.130 A definition of merger clearance register is provided to mean the
register required to be kept by the Commission under section 95AH.
1.131 Amendment No. 45: Disclosure of information by Tribunal --
Schedule 1, item 36, page 38 (lines 18 to 21), omit subsection 114(2), insert a
new subsection 114(2).
1.132 Subsection 114(2) enables the Tribunal to disclose information passed to
it by the Commission under section 113 that is excluded from the merger
clearance register under subsections 95AI(3), (4) or (7).
1.133 The effect of this amendment is that confidential information that was
excluded from the merger clearance register by the Commission may be
disclosed by the Tribunal upon review to such persons as it considers
reasonable and appropriate for the purpose of clarifying the information.
1.134 Amendment No. 46: Tribunal to consider information or reports
provided by Commission -- Schedule 1, item 36, page 39 (after line 7), at the
end of section 116 insert a new paragraph 116(d).
1.135 In order to ensure that the Tribunal does not consider information not
considered by the Commission section 116 requires the Tribunal to have regard
only to material that has been given to the Commission and that has 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. This amendment clarifies
that the Tribunal may also have regard to information or reports provided by the
Commission to the Tribunal under section 115. Such information or reports
may only be provided to the Tribunal by the Commission where the Tribunal
has required that they be provided.
1.136 Amendment No. 47: Deemed decision of Tribunal on review --
Schedule 1, item 36, page 39 (after line 22), after subsection 118(3), insert a
new subsection 118(3A).
1.137 New subsection 118(3A) provides that if the Tribunal has not made a
decision on the clearance review within the period applicable under
subsection 118(1) or subsection 118(2) (that is, within 30 days of having
Trade Practices Legislation Amendment Bill (No. 1) 2005 25
Notes on Amendments
received the application for the review, or an extended period of an additional
60 days because of complexity or other special circumstances) the default
determination is that the Tribunal is deemed to have affirmed the Commission's
determination.
Amendments Relating to Schedule 3 -- Collective
Bargaining
1.138 Amendment No. 48: Target to receive copy of collective bargaining
notice -- Schedule 3, item 9, page 51 (after line 25), after
subsection 93AB(10), insert a new subsection 93AB(10A).
1.139 This amendment requires that the Commission must, as soon as
practicable after receiving a valid collective bargaining notice, give a copy of
the notice to the target. The target will therefore be aware of the notice and will
be able to provide information to the Commission about the notice.
Amendments relating to Schedule 7 -- Third line forcing
and exclusive dealing
1.140 Amendment No. 49: Removal of third line forcing provisions -
Schedule 7, heading, page 71 (lines 2 and 3) omit the heading, substitute:
`Schedule 7 - Exclusive dealing'.
1.141 This amendment changes the heading of Schedule 7 by removing the
reference to third line forcing in order to more accurately describe the
provisions in Schedule 7.
1.142 Amendment No. 50: Removal of third line forcing provisions --
Schedule 7, heading to Part 1, page 71 (lines 4 and 5), omit the heading,
substitute: `Part 1 - Tribunal review'.
1.143 This amendment replaces the heading to Part 1 with one that describes
the content of items 17 and the new item 18 of Part one of Schedule 7. Item 17
of Part 1 of Schedule 7 amends subsection 102(4) of the Act to make it
consistent with subsection 93(3) of the Act. This item remedies a pre-existing
problem with the Act. Its effect is that where a person has notified an exclusive
dealing arrangement (other than one relating to third line forcing conduct) and
seeks merits review of a decision by the Commission to object to that
26 Trade Practices Legislation Amendment Bill (No. 1) 2005
Notes on Amendments
notification, the Tribunal will be required to apply an equivalent test to that
applied by the Commission in considering the initial notification.
1.144 Amendment No. 51: Removal of third line forcing provisions --
Schedule 7, Items 1 to 16, page 71 (line 7) to page 72 (line 15), to be opposed.
1.145 The omission of these items from the Bill will remove the majority of
the third line forcing provisions from the Bill. The effect of this amendment
will be to retain the per se prohibition on third line forcing conduct by
removing the proposed amendment to the Act to replace the per se test with a
substantial lessening of competition test.
1.146 Amendment No. 52: Removal of third line forcing provisions --
Schedule 7, items 18 to 29, page 73 (line 11) to page 74 (line 9), omit the items,
substitute: `18 Application - The amendment made by item 17 applies in
relation to notifications made after the commencement of that item.'
1.147 The omission of items 18 to 29 of the Bill will remove the remainder of
the third line forcing provisions from the Bill, it will also remove consequential
amendments that would have been necessary had the Bill removed the per se
prohibition of third line forcing. The new item 18 is an application provision for
item 17. Item 18 provides that Item 17 applies to notifications made after the
commencement of Item 17.
Trade Practices Legislation Amendment Bill (No. 1) 2005 27
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