Australia: Landlords and developers liable under Competition and Consumer Law

Last Updated: 16 February 2012
Article by Darrell Jardine and Brett Bolton

Those who breach Australia's competition and consumer protection laws face serious consequences. In addition to damaging their reputation and 'brand', a breach of the laws can mean significant fines and other financial liability for those involved. If you intentionally participate in price fixing or other cartel type behaviour with your competitors, you can even be sent to jail.

It's not just the 'big end of town' that needs to consider how these laws will affect them. Landlords, shopping centre owners and property developers - indeed, anyone involved in the property industry - need to understand the legal boundaries within which they must operate.

The Competition and Consumer Act 2010 (formerly the Trade Practices Act 1974) contains a number of prohibitions on anti-competitive behaviour, misleading conduct and unfair conduct. Here, special counsel Brett Bolton explains what these prohibitions mean and why you need to be aware of them.

Key points

  • The Competition and Consumer Act 2010 applies to the goods (the tenancy) and the services (the tenancy services) supplied by landlords to tenants. However, the Act doesn't just apply to landlords when they are negotiating and managing a lease with tenants. It also imposes restrictions on landlords' dealing with their competitors.
  • There are five specific prohibitions that landlords need to ensure they do not breach when dealing with tenants and competitors.
  • In addition, the Australian Consumer Law 2010 contains further rules that apply to those engaged in leasing negotiations.
  • The Australian Competition and Consumer Commission has a range of options at its disposal if it has concerns about a business's conduct, including taking court action and imposing substantial fines. Individuals involved in cartel conduct can be sent to jail.

The competition prohibitions

There are five specific prohibitions of which you need to be aware.

  1. Price fixing and other arrangements with competitors

    It is illegal to liaise with competitors and agree on the prices you will charge your tenants. Any arrangement between competitors which amounts to 'cartel conduct' (eg price fixing or market sharing) is absolutely prohibited by the Act. Anyone found to have been involved in such conduct will be liable to heavy fines and penalties and, in some cases, terms of imprisonment for the individuals involved.

    For example, any agreement between the owners of two shopping centres in close proximity to one another about the price of the office space they would each offer, or the amount they would pay to a security company for providing security services to each of their shopping centres, would be a clear breach of the cartel laws. It is therefore vital that you do not discuss your prices with other shopping centre owners or ask them, for example, what amounts they are paying for security services and why.

  2. Market sharing and arrangements to exclude

    It is illegal to make arrangements with, for example, other shopping centre owners to blacklist certain suppliers or refuse to deal with certain tenants. You may have a very good reason for not wanting to deal with, for example, a particular security company - perhaps because it supplies incompetent or overly aggressive staff or charges too much. You may also have a very good reason for not wanting to deal with a particular tenant - perhaps because you see it as a bad credit risk or you have legitimate concerns about the legality of its business. The legal breach occurs when shopping centre operators agree to act collectively to boycott the security company or tenant in the examples described above. There is, however, nothing illegal about an individual shopping centre owner making its own decision unilaterally.

  3. Lease restraints

    Many commercial and retail leases contain restrictions on how a tenant can use the premises or include other restrictions on the tenant's behaviour. There are often sound commercial reasons for shopping centre owners to impose such restrictions (such as to achieve the right 'balance' of stores within the centre). However, in some instances, these restrictions can breach the exclusive dealing provisions in the Act and therefore be unenforceable.

    The risk is particularly acute where the shopping centre owner occupies a dominant position in the market (because, for example, of the absence of any comparable shopping centres in close proximity which exert any competitive pressure, or because its unique location makes it essential for tenants to secure space in that location).

    Particular caution is also needed where the landlord offers a lease on the condition that the tenant will not also take a lease from an adjoining shopping centre.

    Of course, shopping centre landlords can be the victims of the market power wielded by some tenants. A good illustration of this was the former practice of the major supermarket chains (ie Coles and Woolworths), who insisted, as a condition of taking a lease at a shopping centre, that the landlord agreed not to lease space to other grocery retailers. Coles and Woolworths found themselves under investigation by the Australian Competition and Consumer Commission (ACCC) and eventually gave legally binding promises to the ACCC to abandon these practices. However, the major supermarket chains are not the only organisations with the ability to use their appeal as 'anchor tenants' to insist on leasing arrangements that contain similar types of restrictive provisions.

  4. Third line forcing

    It is illegal to require a tenant to buy goods or services from a third party as a condition of agreeing to grant a lease, or to give extra discounts or rebates if the tenant agrees to acquire goods or services from another supplier. For example, it would be third line forcing if your lease contained a condition requiring the tenant to acquire cleaning services from an unrelated cleaning company.

    It is sometimes possible to 'bundle' the tenancy goods and services with another supplier's goods or services and offer them as a package, but that should not happen without first obtaining legal advice.

  5. Resale price maintenance

    Leases frequently give the tenant the right to sub-let the premises on certain terms and conditions. The important point to note is that the landlord cannot tell the tenant the price that it must charge the subtenant for rent, as that amounts to resale price maintenance.

Consumer protection

Consumer protection laws are now contained in the Australian Consumer Law 2010. These laws are very broad in scope and apply to all Australian businesses, no matter how big or small

The Australian Consumer Law says that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or is likely to mislead or deceive. In addition, the Australian Consumer Law has a specific provision which makes it unlawful to make false or misleading representations in relation to the supply of goods or services. This prohibition is of particular relevance to landlords, especially during the negotiation stages of a lease. You need to be particularly careful to ensure that, in your desire to close the deal, you do not misrepresent what is being offered or what can be delivered regarding such matters as foot traffic, operating costs, expected turnover and floor space.

The Australian Consumer Law also prohibits unconscionable conduct. These provisions have been around in one form or another for many years, and it is surprising how few landlords appreciate the impact of these laws on their activities in commercial and retail leasing.

The unconscionable conduct provisions are designed to prevent stronger parties from taking unfair advantage of weaker parties in their business dealings. The application of these laws to negotiations between shopping centre owners and their potential small business tenants is obvious. Landlords need to be careful to ensure that they observe the terms of the lease and relevant industry codes of conduct, especially when considering whether or not to renew a lease. The unconscionable conduct laws do not make it unlawful to 'drive a hard bargain'. However, the line can sometimes be blurred between legitimate (albeit hard) commercial negotiation and illegitimate or unfair tactics, especially when the so-called 'weaker' party is in a commercially vulnerable position and the stronger party takes unfair advantage of that vulnerability.

A check list of 'warning signs' should be part of any compliance system adopted by landlords when conducting negotiations with tenants and potential tenants.

The impact of a breach on your business

Landlords and shopping centre owners are frequently surprised at the reach of Australia's competition and consumer protection laws, and the impact these laws have on their business activities. Occasionally, that surprise stems from the fact that some of the unlawful practices described above are prevalent throughout the industry. That may be so. However, the chances of those parties who engage in these practices being caught out have increased in recent times. This is because the ACCC now has a range of options at its disposal if it has concerns about a business's conduct. These options are not just limited to taking court action, but can include:

  • commencing a formal investigation by issuing notices compelling the business to produce information and/or documents in relation to its behaviour; and
  • issuing substantiation notices and/or infringement notices.

If the ACCC successfully brings court action, the penalties which can be imposed on the wrongdoer are significant. A breach of the competition laws discussed above could lead to a fine on the company of either up to $10 million, three times the benefit gained from the breach, or 10 percent of the annual turnover of the business (whichever is the greater). Individuals involved in the breach can be fined up to $500,000, banned from managing a company, and, where they have engaged in cartel conduct (eg price fixing, market sharing or bid rigging), they can be sent to jail.

A breach of the laws relating to false representations and unconscionable conduct discussed above can result in penalties of up to $1.1 million for companies, and $220,000 for individuals involved in the breach.

© HopgoodGanim Lawyers

Gold Employer of Choice - ALB magazine, April 2010
Finalist, Brisbane Law Firm of the Year, ALB Australasian Law Awards 2010

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Darrell Jardine
Brett Bolton
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions