Competition Policy Review
Final Report

(Harper Review 2014-2015)

Overview | Key competition law recommendations | Model provisions | Comparison of existing and proposed competition laws

Appendix A of the Harper Competition Policy Review Final Report contains model legislative provisions for implementing proposed changes to the law.

Part I - Preliminary

2A Application of Act to Commonwealth and Commonwealth authorities

[Recommendation 24]

(1) Subject to this section and sections 44AC, 44E and 95D, this Act binds the Crown in right of the Commonwealth in so far as the Crown in right of the Commonwealth engages in trade or commerce, either directly or by an authority of the Commonwealth.

(2) Subject to the succeeding provisions of this section, this Act applies as if:

(a) the Commonwealth, in so far as it engages in trade or commerce, otherwise than by an authority of the Commonwealth; and

(b) each authority of the Commonwealth (whether or not acting as an agent of the Crown in right of the Commonwealth) in so far as it engages in trade or commerce;

were a corporation.

(3) Nothing in this Act makes the Crown in right of the Commonwealth liable to a pecuniary penalty or to be prosecuted for an offence.

(3A) The protection in subsection (3) does not apply to an authority of the Commonwealth.

(4) Part IV does not apply in relation to the Commonwealth developing, and disposing of interests in, land in the Australian Capital Territory. 

2B Application of Act to States and Territories

[Recommendation 24]

(1) The following provisions of this Act bind the Crown in right of each of the States, of the Northern Territory and of the Australian Capital Territory, so far as the Crown engages in trade or commerce, either directly or by an authority of the State or Territory:

(a) Part IV;

(b) Part XIB;

(c) the other provisions of this Act so far as they relate to the above provisions.

(2) Nothing in this Act renders the Crown in right of a State or Territory liable to a pecuniary penalty or to be prosecuted for an offence.

(3) The protection in subsection (2) does not apply to an authority of a State or Territory.

2BA Application of Part IV to local government bodies

[Recommendation 24]

(1) Part IV applies in relation to a local government body only to the extent that it engages in trade or commerce, either directly or by an incorporated company in which it has a controlling interest.

(2) In this section:

local government body 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.

2C Activities that are not in trade or commerce

[Recommendation 24]

(1) For the purposes of sections 2A, 2B and 2BA, the following do not amount to engaging in trade or commerce:

(a) imposing or collecting:

(i) taxes; or

(ii) levies; or

(iii) fees for licences;

(b) granting, refusing to grant, revoking, suspending or varying licences (whether or not they are subject to conditions);

(c) a transaction involving:

(i) only persons who are all acting for the Crown in the same right (and none of whom is an authority of the Commonwealth or an authority of a State or Territory); or

(ii) only persons who are all acting for the same authority of the Commonwealth; or

(iii) only persons who are all acting for the same authority of a State or Territory; or

(iv) only the Crown in right of the Commonwealth and one or more non-commercial authorities of the Commonwealth; or

(v) only the Crown in right of a State or Territory and one or more non-commercial authorities of that State or Territory; or (vi) only non-commercial authorities of the Commonwealth; or

(vii) only non-commercial authorities of the same State or Territory; or

(viii) only persons who are all acting for the same local government body (within the meaning of section 2BA) or for the same incorporated company in which such a body has a controlling interest;

(d) the acquisition of primary products by a government body under legislation, unless the acquisition occurs because:

(i) the body chooses to acquire the products; or

(ii) the body has not exercised a discretion that it has under the legislation that would allow it not to acquire the products.

(2) Subsection (1) does not limit the things that do not amount to engaging in trade or commerce for the purposes of sections 2A, 2B and 2BA.

(3) In this section:

acquisition of primary products by a government body under legislation includes vesting of ownership of primary products in a government body by legislation.

enactment means an Act or an instrument (including rules, regulations or by-laws) made under an Act.

government body means the Commonwealth, a State, a Territory, an authority of the Commonwealth or an authority of a State or Territory.

licence means a licence, permission, authority or right granted under an enactment that allows the licensee to supply goods or services.

primary products means:

(a) agricultural or horticultural produce; or

(b) crops, whether on or attached to the land or not; or

(c) animals (whether dead or alive); or

(d) the bodily produce (including natural increase) of animals.

(4) For the purposes of this section, an authority of the Commonwealth or an authority of a State or Territory is non-commercial if:

(a) it is constituted by only one person; and

(b) it is neither a trading corporation nor a financial corporation.

4 Interpretation

[Recommendations 23 and 25]

(1) In this Act, unless the contrary intention appears:

competition includes competition from goods imported or capable of being imported into Australia, or from services rendered or capable of being rendered in Australia, by persons not resident or not carrying on business in Australia.

contract includes a covenant and a lease or licence of land or buildings.

5 Extended application of this Act to conduct outside Australia

[Recommendation 26]

Each of the following provisions:

(a) Part IV;

(b) Part XI;

(c) the Australian Consumer Law (other than Part 5-3);

(d) the remaining provisions of this Act (to the extent to which they relate to any of the provisions covered by paragraph (a), (b) or (c));

extends to the engaging in conduct outside Australia by any person in so far as the conduct relates to trade or commerce.

Note: Section 4 defines trade or commerce to mean trade or commerce within Australia or between Australia and places outside Australia.

Part IV - Anti-competitive conduct

Division 1 - Cartel conduct
Subdivision A - Introduction

45 Simplified outline [section 44ZZRA]

[Recommendation 27]

The following is a simplified outline of this Division:

• This Division sets out parallel offences and civil penalty provisions relating to cartel conduct.

• A corporation must not make, or give effect to, a contract, arrangement or understanding that contains a cartel provision.

• A cartel provision is a provision relating to:

  (a) price-fixing; or

  (b) restricting outputs in the production and supply chain; or

  (c) allocating customers, suppliers or territories; or

  (d) bid-rigging;

by parties that are, or would otherwise be, in competition with each other.

45A Definitions [section 44ZZRB]

[Recommendation 27]

In this Division:

annual turnover, of a body corporate during a 12-month period, means the sum of the values of all the supplies that the body corporate, and any body corporate related to the body corporate, have made, or are likely to make, during the 12-month 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.

Expressions used in this definition that are also used in the A New Tax System (Goods and Services Tax) Act 1999 have the same meaning as in that Act.

benefit includes any advantage and is not limited to property.

evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

production includes research, development, manufacture, processing, treatment, assembly, disassembly, renovation, restoration, growing, raising, mining, extraction, harvesting, fishing, capturing and gathering.

45B Cartel provisions [section 44ZZRD]

[Recommendation 27]

(1) For the purposes of this Act, a provision of a contract, arrangement or understanding is a cartel provision if:

(a) (price fixing) the provision has the purpose, or has or is likely to have the effect, of fixing, controlling or maintaining the price for, or a discount, allowance, rebate or credit in relation to, goods or services that are supplied or acquired by any party to the contract, arrangement or understanding in competition with any other party;

(b) (restricting output) the provision has the purpose of preventing, restricting or limiting:

(i) the production or the supply by any party to the contract, arrangement or understanding of goods or services that are supplied by that party in competition with any other party;

(ii) the acquisition by any party to the contract, arrangement or understanding of goods or services that are acquired by that party in competition with any other party;

(c) (market allocation) the provision has the purpose of allocating to or from any party to the contract, arrangement or understanding:

(i) the persons or classes of persons to whom that party may supply, or from whom that person may acquire, goods or services in competition with any other party; or

(ii) the geographical areas in which that party may supply or acquire goods or services in competition with any other party;

(d) (bid rigging) the provision has the purpose of restricting whether, or the terms on which, or the extent to which, any party to the contract, arrangement or understanding may bid in competition with any other party in response to a request for bids for the supply or acquisition of goods or services.

Competition

(2) For the purposes of subsection (1), a party to a contract, arrangement or understanding supplies goods or services in competition with another party if and only if:

(a) those parties or any of their respective related bodies corporate are, or are likely to be, in competition with each other; or

(b) but for the provision of any contract, arrangement or understanding, those parties or any of their respective related bodies corporate would be, or would be likely to be, in competition with each other,

in relation to the supply of the goods or services in trade or commerce.

Note: Section 4 defines trade or commerce to mean trade or commerce within Australia or between Australia and places outside Australia.

(3) For the purposes of subsection (1), a party to a contract, arrangement or understanding acquires goods or services in competition with another party if and only if:

(a) those parties or any of their respective related bodies corporate are, or are likely to be, in competition with each other; or

(b) but for the provision of any contract, arrangement or understanding, those parties or any of their respective related bodies corporate would be, or would be likely to be, in competition with each other,

in relation to the acquisition of the goods or services in trade or commerce.

Note: Section 4 defines trade or commerce to mean trade or commerce within Australia or between Australia and places outside Australia.

(4) For the purposes of subsection (1), a party to a contract, arrangement or understanding does not supply or acquire goods or services in competition with another party if those parties are related bodies corporate.

Immaterial whether particular circumstances or particular conditions

(5) It is immaterial whether the cartel provision only applies in particular circumstances or on particular conditions.

Considering related provisions

(6) For the purposes of this Division, a provision of a contract, arrangement or understanding is taken to have the purpose, effect or likely effect mentioned in subsection (1) if the provision, when considered together with:

(a) the other provisions of the contract, arrangement or understanding; or

(b) the provisions of another contract, arrangement or understanding to which at least one of the parties to the first-mentioned parties is a party,

has that purpose, effect or likely effect.

Subdivision B - Offences etc.

45C Making a contract etc. containing a cartel provision [section 44ZZRF]

[Recommendation 27]

Offence

(1) A corporation commits an offence if:

(a) the corporation makes a contract or arrangement, or arrives at an understanding; and

(b) the contract, arrangement or understanding contains a cartel provision.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

(2) The fault element for paragraph (1)(b) is knowledge or belief.

Penalty

(3) An offence against subsection (1) is punishable on conviction by a fine not exceeding the greater of the following:

(a) $10,000,000;

(b) if the court can determine the total value of the benefits that:

(i) have been obtained by one or more persons; and

(ii) are reasonably attributable to the commission of the offence;

3 times that total value;

(c) if the court cannot determine the total value of those benefits - 10% of the corporation’s annual turnover during the 12-month period ending at the end of the month in which the corporation committed, or began committing, the offence.

Indictable offence

(4) An offence against subsection (1) is an indictable offence.

45D Giving effect to a cartel provision [section 44ZZRG]

[Recommendation 27]

Offence

(1) A corporation commits an offence if:

(a) a contract, arrangement or understanding contains a cartel provision; and

(b) the corporation gives effect to the cartel provision.

Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.

(2) The fault element for paragraph (1)(a) is knowledge or belief.

Penalty

(3) An offence against subsection (1) is punishable on conviction by a fine not exceeding the greater of the following:

(a) $10,000,000;

(b) if the court can determine the total value of the benefits that:

(i) have been obtained by one or more persons; and

(ii) are reasonably attributable to the commission of the offence;

3 times that total value;

(c) if the court cannot determine the total value of those benefits - 10% of the corporation’s annual turnover during the 12-month period ending at the end of the month in which the corporation committed, or began committing, the offence.

Pre-commencement contracts etc.

(4) Paragraph (1)(a) applies to contracts or arrangements made, or understandings arrived at, before, at or after the commencement of this section.

Indictable offence

(5) An offence against subsection (1) is an indictable offence.

45E Determining guilt [section 44ZZRH]

[Recommendation 27]

(1) A corporation may be found guilty of an offence against section 45C or 45D even if:

(a) each other party to the contract, arrangement or understanding is a person who is not criminally responsible; or

(b) subject to subsection (2), all other parties to the contract, arrangement or understanding have been acquitted of the offence.

(2) A corporation cannot be found guilty of an offence against section 45C or 45D if:

(a) all other parties to the contract, arrangement or understanding have been acquitted of such an offence; and

(b) a finding of guilt would be inconsistent with their acquittal.

45F Court may make related civil orders [section 44ZZRI]

[Recommendation 27]

If a prosecution against a person for an offence against section 45C or 45D is being, or has been, heard by a court, the court may:

(a) grant an injunction under section 80 against the person in relation to:

(i) the conduct that constitutes, or is alleged to constitute, the offence; or

(ii) other conduct of that kind; or

(b) make an order under section 86C, 86D, 86E or 87 in relation to the offence.

Subdivision C - Civil penalty provisions

45G Making a contract etc. containing a cartel provision [section 44ZZRJ]

[Recommendation 27]

A corporation contravenes this section if:

(a) the corporation makes a contract or arrangement, or arrives at an understanding; and

(b) the contract, arrangement or understanding contains a cartel provision.

Note: For enforcement, see Part VI.

45H Giving effect to a cartel provision [ section 44ZZRK]

[Recommendation 27]

(1) A corporation contravenes this section if:

(a) a contract, arrangement or understanding contains a cartel provision; and

(b) the corporation gives effect to the cartel provision.

Note: For enforcement, see Part VI.

(2) Paragraph (1)(a) applies to contracts or arrangements made, or understandings arrived at, before, at or after the commencement of this section.

Subdivision D - Exceptions

45I Joint ventures [section 44ZZRO]

[Recommendation 27]

(1) Sections 45C, 45D, 45G, and 45H do not apply in relation to a contract, arrangement or understanding containing a cartel provision if:

(a) the parties to the contract, arrangement or understanding are in a joint venture for the production, supply, acquisition or marketing of goods or services; and

(b) the cartel provision:

(i) relates to goods or services that are acquired, produced, supplied or marketed by or for the purposes of the joint venture;

(ii) is reasonably necessary for undertaking the joint venture; or

(iii) is for the purpose of the joint venture.

Note: A defendant bears an evidential burden in relation to the matter in subsection (1) (see subsection 13.3(3) of the Criminal Code) and subsection (2) of this section.

(2) A person who wishes to rely on subsection (1) in relation to a contravention of section 45G or 45H bears an evidential burden in relation to that matter.

45J Restrictions in supply and acquisition agreements [section 44ZZRS]

[Recommendation 27]

(1) Sections 45C, 45D, 45G and 45H do not apply in relation to a contract, arrangement or understanding containing a cartel provision in so far as the cartel provision:

(a) is imposed by a person (the supplier) in connection with the supply of goods or services to another person (the acquirer) and relates to:

(i) the supply of the goods or services by the acquirer to the acquirer;

(ii) the acquisition by the acquirer of goods or services that are substitutable for or otherwise competitive with the goods or services from others; or

(iii) the supply by the acquirer of the goods or services or goods or services that are substitutable for or otherwise competitive with the goods or services;

(b) is imposed by a person (the acquirer) in connection with the acquisition of goods or services from another person (the supplier) and relates to:

(i) the acquisition of the goods or services from the supplier; or

(ii) the supply by the supplier of the goods or services, or goods or services that are substitutable for or otherwise competitive with the goods or services, to others.

Note: A defendant bears an evidential burden in relation to the matter in subsection (1) (see subsection 13.3(3) of the Criminal Code) and subsection (2) of this section.

(2) A person who wishes to rely on subsection (1) in relation to a contravention of section 45G or 45H bears an evidential burden in relation to that matter.

45K Collective supply or acquisition of goods or services by the parties to a contract, arrangement or understanding [section 44ZZRV]

[Recommendation 27]

(1) Sections 45C, 45D, 45G and 45H do not apply in relation to a contract, arrangement or understanding containing a cartel provision, in so far as:

(a) the cartel provision has the purpose, or has or is likely to have the effect, mentioned in paragraph 45B(1)(a); and

(b) either:

(i) the cartel provision relates to the price for goods or services to be collectively acquired, whether directly or indirectly, by the parties to the contract, arrangement or understanding; or

(ii) the cartel provision is for the joint advertising of the price for the re-supply of goods or services so acquired.

Note: A defendant bears an evidential burden in relation to the matter in subsection (1) (see subsection 13.3(3) of the Criminal Code and subsection (2) of this section).

(2) A person who wishes to rely on subsection (1) in relation to a contravention of section 45G or 45H bears an evidential burden in relation to that matter.

45L Acquisition of shares or assets [section 44ZZRU]

[Recommendation 27]

(1) Sections 45C, 45D, 45G and 45H do not apply in relation to a contract, arrangement or understanding containing a cartel provision, in so far as the cartel provision provides directly or indirectly for the acquisition of:

(a) any shares in the capital of a body corporate; or

(b) any assets of a person.

Note: A defendant bears an evidential burden in relation to the matter in subsection (1) (see subsection 13.3(3) of the Criminal Code and subsection (2) of this section).

(2) A person who wishes to rely on subsection (1) in relation to a contravention of section 45G or 45H bears an evidential burden in relation to that matter.

Division 2 - Other provisions

45M Prohibited conduct [section 45]

[Recommendations 28 and 29]

(1) A corporation shall not:

(a) make a contract or arrangement, or arrive at an understanding, if a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition;

(b) give effect to a provision of a contract, arrangement or understanding if that provision has the purpose, or has or is likely to have the effect, of substantially lessening competition; or

(c) engage in a concerted practice with one or more other persons if the concerted practice has the purpose, or has or is likely to have the effect, of substantially lessening competition.

(2) For the purposes of paragraphs (1)(a) and (b), competition means competition in any market in which a corporation that is a party to the contract, arrangement or understanding or would be a party to the proposed contract, arrangement or understanding, or any body corporate related to such a corporation, supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the provision of the contract, arrangement or understanding or the proposed contract, arrangement or understanding, supply or acquire, or be likely to supply or acquire, goods or services.

(3) For the purposes of the application of paragraphs (1)(a) and (b) in relation to a particular corporation, a provision of a contract, arrangement or understanding or of a proposed contract, arrangement or understanding shall be deemed to have or to be likely to have the effect of substantially lessening competition if that provision and any one or more of the following provisions, namely:

(a) the other provisions of that contract, arrangement or understanding or proposed contract, arrangement or understanding; and

(b) the provisions of any other contract, arrangement or understanding or proposed contract, arrangement or understanding to which the corporation or a related body corporate is or would be a party;

together have or are likely to have that effect.

(4) For the purposes of paragraph (1)(c), competition means competition in any market in which a corporation that is a party to the concerted practice, or any body corporate related to the corporation, supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the practice, supply or acquire, or be likely to supply or acquire, goods or services.

(5) This section does not apply to or in relation to a contract, arrangement or understanding in so far as the contract, arrangement or understanding provides, or to or in relation to a proposed contract, arrangement or understanding in so far as the proposed contract, arrangement or understanding would provide, directly or indirectly for the acquisition of any shares in the capital of a body corporate or any assets of a person.

(6) This section does not apply to or in relation to a contract, arrangement or understanding, or a proposed contract, arrangement or understanding, or a concerted practice, the only parties to which are or would be bodies corporate that are related to each other.

45X Prohibition of contracts, arrangements or understandings affecting the supply or acquisition of goods or services [section 45E]

[Recommendation 37]

Prohibition in a supply situation

(1) A person must not make a contract or arrangement, or arrive at an understanding, with an organisation of employees, an officer of such an organisation or a person acting for and on behalf of such an officer or organisation, if the proposed contract, arrangement or understanding contains a provision included for the purpose, or for purposes including the purpose, of:

(a) preventing or hindering the person from supplying goods or services to a second person; or

(b) preventing or hindering the person from supplying goods or services to a second person, except subject to a condition:

(i) that is not a condition to which the supply of such goods or services by the person to the second person has previously been subject because of a provision in a contract between those persons; and

(ii) that is about the persons to whom, the manner in which or the terms on which the second person may supply any goods or services.

Prohibition in an acquisition situation

(2) A person must not make a contract or arrangement, or arrive at an understanding, with an organisation of employees, an officer of such an organisation or a person acting for and on behalf of such an officer or organisation, if the proposed contract, arrangement or understanding contains a provision included for the purpose, or for purposes including the purpose, of:

(a) preventing or hindering the person from acquiring goods or services from a second person; or

(b) preventing or hindering the person from acquiring goods or services from a second person, except subject to a condition:

(i) that is not a condition to which the acquisition of such goods or services by the person from the second person has previously been subject because of a provision in a contract between those persons; and

(ii) that is about the persons to whom, the manner in which or the terms on which the second person may supply any goods or services.

Situations to which section applies

(3) This section does not apply unless the first or second person is a corporation or both of them are corporations.

No contravention if the other person gives written consent to written contract etc.

(4) Subsections (1) and (2) do not apply to a contract, arrangement or understanding if it is in writing and was made or arrived at with the written consent of the second person.

Note: Conduct that would otherwise contravene this section can be authorised under subsection 88(7A).

45Y Provisions contravening section 45X not to be given effect [section 45EA]

[Recommendation 37]

A person must not give effect to a provision of a contract, arrangement or understanding if, because of the provision, the making of the contract or arrangement, or the arriving at the understanding, by the person:

(a) contravened subsection 45X(1) or (2); or

(b) would have contravened subsection 45X(1) or (2) if:

(i) section 45X had been in force when the contract or arrangement was made, or the understanding was arrived at; and

(ii) the words “is in writing and” and “written” were not included in subsection 45X(4).

Note: Conduct that would otherwise contravene this section can be authorised under subsection 88(7A).

46 Misuse of market power

[Recommendation 30]

(1) A corporation that has a substantial degree of power in a market shall not engage in conduct if the conduct has the purpose, or would have or be likely to have the effect, of substantially lessening competition in that or any other market.

(2) Without limiting the matters that may be taken into account for the purposes of subsection (1), in determining whether conduct has the purpose, or would have or be likely to have the effect, of substantially lessening competition in a market, the court must have regard to:

(a) the extent to which the conduct has the purpose, or would have or be likely to have the effect, of increasing competition in the market including by enhancing efficiency, innovation, product quality or price competitiveness in the market; and

(b) the extent to which the conduct has the purpose, or would have or be likely to have the effect, of lessening competition in the market including by preventing, restricting or deterring the potential for competitive conduct in the market or new entry into the market.

(3) If:

(a) a body corporate that is related to a corporation has, or 2 or more bodies corporate each of which is related to the one corporation together have, a substantial degree of power in a market; or

(b) a corporation and a body corporate that is, or a corporation and 2 or more bodies corporate each of which is, related to that corporation, together have a substantial degree of power in a market;

the corporation shall be taken for the purposes of this section to have a substantial degree of power in that market.

(4) In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the court shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that market is constrained by the conduct of:

(a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or

(b) persons to whom or from whom the body corporate or any of those bodies corporate supplies or acquires goods or services in that market.

(5) In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the court may have regard to the power the body corporate or bodies corporate has or have in that market that results from any contracts, arrangements or understandings, or proposed contracts, arrangements or understandings, that the body corporate or bodies corporate has or have, or may have, with another party or other parties.

(6) Subsections (4) and (5) do not limit the matters to which regard may be had in determining, for the purposes of this section, the degree of power that a body corporate or bodies corporate has or have in a market.

(7) For the purposes of this section, a body corporate may have a substantial degree of power in a market even though:

(a) the body corporate does not substantially control the market;

(b) the body corporate does not have absolute freedom from constraint by the conduct of:

(i) competitors, or potential competitors, of the body corporate in that market; or

(ii) persons to whom or from whom the body corporate supplies or acquires goods or services in that market;

(c) one or more other bodies corporate have a substantial degree of power in that market.

(8) In this section:

(a) a reference to power is a reference to market power;

(b) a reference to a market is a reference to a market for goods or services; and

(c) a reference to power, or to conduct, in a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market.

47 Exclusive dealing
[Note panel recommends repeal of s 47 provided s 46 recommendations are implemented. If they are not, panel recommends retention of section 47 in this 'simplified' form]

[Recommendation 32]

(1) Subject to this section, a corporation shall not, in trade or commerce, engage in exclusive dealing conduct.

(2) A corporation (supplier) engages in exclusive dealing conduct if the corporation supplies, or offers to supply, goods or services to another person (acquirer), or does so at a particular price or with a particular discount, allowance, rebate or credit, subject to a condition (supplier condition):

(a) relating to the supply of those or other goods or services by the supplier to the acquirer; or

(b) preventing, restricting or limiting:

(i) the acquisition by the acquirer of goods or services from others; or

(ii) the supply by the acquirer of goods or services to others.

(3) A corporation (supplier) also engages in exclusive dealing conduct if the corporation refuses to supply goods or services to another person (acquirer), or refuses to do so at a particular price or with a particular discount, allowance, rebate or credit, for the reason that:

(a) the acquirer has not agreed to a supplier condition referred to in subsection (2); or

(b) the acquirer has previously acted inconsistently with a supplier condition referred to in subsection (2).

(4) A corporation (acquirer) engages in exclusive dealing conduct if the corporation acquires, or offers to acquire, goods or services from another person, or does so at a particular price or with a particular discount, allowance, rebate or credit, subject to a condition (acquirer condition):

(a) relating to the acquisition of those or other goods or services by the acquirer from the supplier; or

(b) preventing, restricting or limiting the supply by the supplier of goods or services to others.

(5) A corporation (acquirer) also engages in exclusive dealing conduct if the corporation refuses to acquire goods or services from another person (supplier), or refuses to do so at a particular price or with a particular discount, allowance, rebate or credit, for the reason that:

(a) the supplier has not agreed to an acquirer condition referred to in subsection (4); or

(b) the supplier has previously acted inconsistently with a acquirer condition referred to in subsection (4).

(6) Subsection (1) does not apply to exclusive dealing conduct unless:

(a) the engaging by the corporation in that conduct has the purpose, or has or is likely to have the effect, of substantially lessening competition in a market; or

(b) the engaging by the corporation in that conduct, and the engaging by the corporation, or by a body corporate related to the corporation, in other conduct of the same or a similar kind, together have or are likely to have the effect of substantially lessening competition in a market.

(7) Subsection (1) does not apply to exclusive dealing conduct if the only parties to the conduct are related bodies corporate.

(8) In this section:

(a) a reference to a condition shall be read as a reference to any condition, whether direct or indirect and whether having legal or equitable force or not, and includes a reference to a condition the existence or nature of which is ascertainable only by inference from the conduct of persons or from other relevant circumstances;

(b) a reference to competition shall be read as a reference to competition in any market in which:

(i) the corporation engaging in the conduct or any body corporate related to that corporation; or

(ii) any person whose business dealings are restricted, limited or otherwise circumscribed by the conduct or, if that person is a body corporate, any body corporate related to that body corporate;

supplies or acquires, or is likely to supply or acquire, goods or services or would, but for the conduct, supply or acquire, or be likely to supply or acquire, goods or services.

Part VI - Enforcement and remedies

83 Finding or admission of fact in proceedings to be evidence

[Recommendation 41]

In a proceeding against a person under section 82 or in an application under subsection 51ADB(1) or 87(1A) for an order against a person, a finding of any fact by a court or an admission of any fact by that person made in proceedings under section 77, 80, 81, 86C, 86D or 86E, or for an offence against section 45C or 45D, in which that person has been found to have contravened, or to have been involved in a contravention of, a provision of Part IV or IVB, or of section 60C or 60K, is prima facie evidence of that fact and the finding or admission may be proved by production of:

(a) a document under the seal of the court from which the finding or admission appears; or

(b) a document in which the admission was made.

Part VII - Authorisations, notifications and block exemptions

Division 1 - Authorisations

87ZP Definitions

[Recommendations 35 and 38]

In this Division:

merger authorisation means an authorisation under subsection 88(1) to a person to:

(a) acquire shares in the capital of a body corporate or to acquire assets of a person to which section 50 would or might apply; or

(b) acquire a controlling interest in a body corporate within the meaning of section 50A,

but does not include an authorisation where the conduct specified in the application includes conduct to which one or more provisions other than section 50 or 50A would apply.

88 Power of Commission to grant authorisations

[Recommendations 35 and 38]

(1) Subject to this Part, the Commission may, upon application by or on behalf of a person, grant an authorisation to the person to engage in conduct specified in the application to which one or more provisions of Part IV would or might apply.

Effect of authorisation

(2) While an authorisation under subsection (1) remains in force the provisions of Part IV do not apply to the applicant and any person referred to in subsections (8) and (9) engaging in the conduct specified in and in accordance with the authorisation.

Note: The references to conduct and engaging in conduct in subsection 89(1) include the actions set out in subsection 4(2).

Authorisation test

(3) Subject to subsections (4) and (5), the Commission must not make a determination granting an authorisation under subsection (1) to engage in conduct specified in the application unless the Commission is satisfied in all the circumstances:

(a) that the conduct would not have the effect, or be likely to have the effect, of substantially lessening competition; or

(b) that the conduct would result, or be likely to result, in a benefit to the public and that the benefit would outweigh the detriment to the public that would result, or be likely to result, from engaging in the conduct.

(4) Paragraph 3(a) does not apply to an application for authorisation for conduct to which [the cartel provisions], [the secondary boycott provisions] and the [resale price maintenance provisions] would apply.

(5) In respect of a merger authorisation, in determining what amounts to a benefit to the public for the purposes of paragraph (3)(b):

(a) the Commission must regard the following as benefits to the public (in addition to any other benefits to the public that may exist apart from this paragraph):

(i) a significant increase in the real value of exports;

(ii) a significant substitution of domestic products for imported goods; and

(b) without limiting the matters that may be taken into account, the Commission must take into account all other relevant matters that relate to the international competitiveness of any Australian industry.

Single application may deal with more than one type of conduct

(6) The Commission may grant a single authorisation in respect of all conduct specified in an application for authorisation or may grant separate authorisations in respect of any of the conduct.

Conditions

(7) The Commission may grant an authorisation subject to such conditions as are specified in the authorisation.

Other and future parties

(8) An authorisation granted by the Commission to a person to engage in conduct has effect as an authorisation in the same terms to every other person named or referred to in the application for authorisation as a party or proposed party to the conduct.

(9) An authorisation may be expressed so as to apply to particular persons or classes of persons who become a party to the conduct as specified in the authorisation.

Past conduct

(10) The Commission does not have power to:

(a) grant an authorisation to a person in respect of any conduct undertaken before the Commission makes a determination in respect of the application; and

(b) in respect of a merger authorisation, grant authorisation in respect of an acquisition that has occurred.

Withdrawal of application

(11) An applicant for authorisation may at any time, by writing to the Commission, withdraw the application.

Division 2 - Notifications

93 Notification of exclusive dealing or resale price maintenance

[Recommendation 34]

(1) Subject to subsection (2), a corporation that engages, or proposes to engage, in conduct of a kind referred to in sections 47 or 48 or both may give to the Commission a notice setting out particulars of the conduct or proposed conduct.

(2) Where a corporation has given notice under subsection (1), section 47 or section 48 (as the case may be) does not prevent the corporation from engaging in the conduct referred to in the notice, unless:

(a) the Commission has given notice under subsection (3) and the conduct takes place more than 30 days (or such longer period as the Commission by writing permits) after the day on which the Commission gave the notice; or

(b) the notice has been withdrawn and the conduct takes place after the notice was withdrawn.

(3) If the Commission is satisfied in all the circumstances that a corporation engaging in conduct of a kind described in section 47 and referred to in a notice given by the corporation under subsection (1):

(a) has, or would have or be likely to have, the effect of substantially lessening competition; and

(b) would not result, or is not likely to result, in a benefit to the public that would outweigh the detriment to the public constituted by any lessening of competition that has resulted, or is likely to result, from engaging in the conduct,

the Commission may at any time give notice in writing to the corporation stating that the Commission is so satisfied including a statement setting out its reasons for being so satisfied.

(4) If the Commission is satisfied in all the circumstances that a corporation engaging in conduct of a kind:

(a) described in section 48; or

(b) described in both section 47 and 48,

and referred to in a notice given by the corporation under subsection (1) would not result, or is not likely to result, in a benefit to the public that would outweigh the detriment to the public from engaging in the conduct, the Commission may at any time give notice in writing to the corporation stating that the Commission is so satisfied including a statement setting out its reasons for being so satisfied.

Division 3 - Block exemptions

@XX Block exemptions

[Recommendation 39]

(1) The Commission may exempt particular conduct or categories of conduct from the provisions of Part IV (a block exemption) if the Commission is satisfied that:

(a) the conduct would not have the effect, or be likely to have the effect, of substantially lessening competition; or

(b) the conduct would result, or be likely to result, in a benefit to the public and that the benefit would outweigh the detriment to the public constituted by any lessening of competition that would result, or be likely to result, from engaging in the conduct.

(2) A block exemption may apply generally or be limited such that it applies:

(a) to specified persons or classes of persons;

(b) in specified circumstances; or

(c) on specified conditions.

(3) A block exemption must provide that the exemption is to cease to have effect at the end of a specified period.

(4) While the block exemption is in force, the provisions of Part IV do not apply to a person to whom the block exemption applies engaging in conduct to which the block exemption applies in accordance with the terms of the block exemption.

(5) The Commission must maintain a public register that includes all block exemptions that have been granted, including those that are no longer in operation.

(6) In this Division “specified” means specified in a block exemption.