It is common practice for contractors to enter into joint
venture arrangements (JVs) when working on major
infrastructure/construction projects. However amendments to the
Trade Practices Act 1974 (Cth) (TPA)
introducing new criminal offences and civil penalty provisions for
cartel conduct came into effect on 24 July 2009.
In short, the amendments prohibit any contract, arrangement or
understanding (CAU) between competitors that contain a 'cartel
provision'. A cartel provision is one that has:
the purpose or effect of fixing, controlling or maintaining
prices for goods or services, or
the purpose of preventing, restricting or limiting output,
market sharing or bid rigging,where at least two of the parties to
the CAU that contains the provision are in competition (or are
likely to be in competition).
The TPA previously made an exception to prohibitions on cartel
conduct for JVs, but following the amendments this exception has
been significantly narrowed and will only apply where the
contravening arrangement is the subject of and expressly dealt with
in sufficient detail in a contract and where the activity is for
the production and/or supply of goods or services. Informal
arrangements and any other forms of agreement (for example Heads of
Agreement, MOU or even Deeds) will not in themselves be
Even if the exception applies, if a CAU has the purpose or
effect of substantially lessening competition then it may still
contravene section 45 of the TPA, and so still be subject to civil
In respect of JVs, the amendments to the TPA mean that if you
are party to any current or proposed JV you should seek legal
advice regarding the application of the new cartel provisions and,
in particular, whether the prerequisites to the joint venture
exception are satisfied
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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