The Competition and Consumer Act Amendment Act (No1)
2011 introduces the law prohibiting price signalling and
information disclosures and is due to commence on 6 June 2012. The
new law prohibits:
private disclosure of price-related information to a
disclosure, whether public or private, of any relevant aspect
of a corporation's commercial strategy (including discounts,
credits, rebates etc), where the disclosure aims to substantially
Price signalling involves the practice of communicating or
signalling a company's price rises or pricing initiatives to
its competitors for the purposes of having a competitor follow it.
It is conduct that does not qualify as actual collusion between
competitors but intends to take that form.
A number of exemptions may be available for certain
Draft price signalling regulations
The draft Competition and Consumer Act Amendment Regulations
(2012) (No. ) (Draft Regulations):
gives effect to the government's desire to initially target
the banking industry
sets out the process that must be followed before prescribing
the application of the price signalling legislation to other
classes of goods or services (or types of suppliers of goods or
prescribes the forms and fees for parties to apply to the
Australian Competition and Consumer Commission (ACCC) for immunity
from proposed disclosures that could otherwise contravene the price
These regulations are intended to commence on 6 June 2012, to
coincide with the commencement of the price signalling laws.
Initially, the ACCC was concerned with the practices of the
major banks in determining interest rates, and accordingly, the
Draft Regulations prescribes the application of the price
signalling laws to initially regulate the banking industry.
Essentially, the law will apply to a good or service provided by
authorised deposit-taking institutions (ADIs) regulated under the
style="font-style: italic;">Banking Act 1959, in
relation to either:
the "taking of money on deposit (otherwise than as
part-payment for identified goods or services)" or
"making advances of money".
Proposed process for regulating other industries
The Draft Regulations set out the process for prescribing the
application of the laws to other industries. The proposed
Regulation 49 states that before the Governor-General makes a
regulation prescribing a class of goods or services to be subject
to the price signalling laws, the Minister must be satisfied that
any consultation that is considered to be appropriate and that is
reasonably practicable to undertake, has been undertaken. This
requires the Minister to consider whether the consultation
experts in the fields relevant to the proposed regulation
those affected by the proposed regulation
if appropriate, invitations to make submissions by a specified
date or consultations involving public hearings.
The ACCC has in the past openly expressed its concerns about the
pricing practices of other industries such as the petrol industry.
It would therefore be unsurprising if the petrol industry becomes
the next target under the consultation process, and ultimately the
Immunity from price signalling prohibitions
The new price signalling law will extend the authorisation and
notification processes available under the Competition and
Consumer Act 2010 to include price signalling. Accordingly, a
party may be able to seek immunity from action under the price
signalling prohibitions if the proposed conduct provides a net
public benefit. The Draft Regulations propose to add Form BA and
Form GAA to the current forms used for authorisation or
Those in the banking industry (including credit unions, building
societies, credit card institutions, providers of purchased payment
facilities and authorised non-operating holding companies regulated
as ADIs pursuant to the Banking Act 1959) will need
review its practices and exercise caution when communicating or
disclosing information relating to its price rises or other pricing
seek specialist competition law advice if in doubt as to
whether something is legitimate business conduct and how the new
price signalling laws will impact upon its business
update its trade practices compliance program and training of
staff to ensure they are aware of the new price signalling
For those in other industries (especially the petrol industry),
it will be important to monitor and assess how the new price
signalling law and proposed consultation process is likely to
Middletons can assist you in preparing submissions to the
Treasury on the Draft Regulations or can provide you with advice on
the implications and actions to take in preparation for the
commencement of the new law.
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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