Australia: Competition law - root & branch review: Harper draft report released

On 22 September 2014 the much anticipated Draft Report of the 'root and branch' review of the Competition and Consumer Act 2010 (Cth) (Act) (Harper Review) was released.

The proposed recommendations of the Harper Review panel (Panel) are far reaching, touching on all areas of Australia's economy, including:

  • seeking to simplify the Act and enhancing its effectiveness by:
  • reformulating the prohibition against misuse of market power to target conduct that has the purpose or likely effect of substantially lessening competition;
  • simplifying the cartel conduct provisions and broadening the joint venture exemption to other competitor collaboration that do not have the purpose or likely effect of substantially lessening competition; and
  • repealing the existing price signalling laws that only apply to the banking sector and instead extending the current provisions to prohibit 'concerted practices' that have the purpose or likely effect of substantially lessening competition;
    • providing for sectoral reform to generate further competition to the taxi industry, to pharmaceutical retailing, to shipping, to planning and zoning laws and retailing more generally and greater choice in the delivery of human services; and
    • the establishment of a new body to undertake market studies, a new national access and pricing regulator and potentially new governance arrangements for the ACCC.

The purpose of the Harper Review is to assess Australia's competition policy to determine whether it is still 'fit for purpose' in light of the significant changes that both the world and Australian economies have experienced since the 1990s.

The Panel identified three major forces affecting the Australian economy that will influence whether Australia's competition policies, laws and institutions are fit for purpose – the rise of Asia and other emerging economies, Australia's ageing population and new technologies.

Given the widely framed terms of reference, however, the Harper Review is intended to act more as a 'catalyst' for future reforms rather than setting out any proposed changes in detail. Where the Panel has proposed changes, the proposals have been made in respect of issues that have been tested and debated.


On 27 March 2014, the terms of reference and members of the Panel were announced (see here for our earlier article), in line with a pre-election promise of the Abbott Government.

An Issues Paper was released by the Panel on 14 April 2014 (see here for our earlier article), with almost 350 submissions received in response.

Since the release of the Issues Paper, the Panel has met with consumer and small and large business groups, as well as a variety of academics, current and former regulators, and governments, including a number of state and territory Treasurers. The Panel has had close to 100 meetings with stakeholders.1


The Panel considered that there were three major forces affecting the Australian economy that, going forward will influence whether Australia's competition policies, laws and institutions will be fit for purpose going forward, namely:

  • the rise of Asia and other emerging economies: which provide both opportunities and challenges for Australia, and require a capacity for agility and innovation on the part of Australia;
  • our ageing population: extending competition in government provision of human services will assist in helping people meeting their individual and health care needs; and
  • new technologies: resulting in challenges for policy makers and regulators needing to ensure competition laws and policies do not unduly disrupt the impact of new technologies while at the same time preserving safeguards for consumers.

With this context in mind, the Panel made 52 draft recommendations, spanning competition policy, competition laws and competition institutions.


The Panel's recommendations focused on simplification of the laws, greater certainty and the enhancement of consumer welfare over the long term by seeking to strike the 'right balance' between prohibiting anti-competitive conduct and allowing pro-competitive conduct. The major recommendations are as follows:

Looking outward: Extra territoriality

The Panel recommended that section 5 of the Act be amended to remove the requirement that a contravening firm has a connection to Australia. This recommendation is based on the premise that the Act ought to apply to firms engaging in conduct outside of Australia that damages Australian markets.

Similarly the Panel recommended that the definition of 'market' recognise the global nature of commerce by recognising that a market in Australia includes competition from goods or services supplied from outside of Australia.

Misuse of Market Power: Changing to an 'effects test'

The Panel stated that the threshold for this prohibition namely a corporation having "a substantial degree of power in a market" is the appropriate and well understood starting point for the assessment of wrongdoing.

However, it considered that the requirements of:

  • 'taking advantage of market power'; and
  • the proscribed purposes of the conduct damaging a competitor,

are respectively difficult to interpret and apply in advice and are inconsistent with the policy objective of the Act to protect competition not competitors.

Accordingly, the Panel recommended that the prohibition be reformulated to prohibit a corporation that has substantial market power from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition.

Cartel and Price Signalling/Concerted Action

The Panel reiterated that cartel conduct between competitors remain an automatic or per se offence. However, it considered that:

  • the provisions were excessively complex, that given the potential for criminal sanctions, conduct between actual rather than potential competitors should be prohibited. There should also be greater clarity about the exemptions from the prohibitions.
  • Accordingly, the Panel recommended that the prohibitions be simplified and:
  • should only apply to cartel conduct affecting goods or services supplied or acquired in Australian markets;
  • apply only to firms that are actual competitors and not those for whom competition is a mere possibility;
  • there be a broader and more clear exemption for collaborative conduct, broader than the current joint venture exemption, that does not have the purpose or likely effect of substantially lessening competition; and
  • there should be an additional exemption for trading restrictions that are imposed by one corporation on another in connection with the supply or acquisition of goods or services (including IP) licensing as such conduct is otherwise only illegal if it has the purpose or likely effect of substantially lessening competition.

In addition the Panel recommended that:

  • consequent to the above changes the exclusionary provisions/collective boycott per se prohibition in section 4D is no longer necessary and should be repealed; and
  • the price signalling prohibitions are not fit for purpose in that they only apply to the banking industry (rather than the policy objective that the Act should apply to all businesses generally) and do not strike the right balance of distinguishing between anti-competitive and pro-competitive conduct. In their place the existing prohibition in section 45 to conduct having the purpose or likely effect of substantially lessening competition should be extended to prohibit "concerted practices" which have the same purpose or effect.

Streamlining merger control

The Panel supported the current test for mergers and was of the view that the current informal merger clearance process generally worked well. It did, however, recognise the need for the ACCC to be more timely with its decisions and that there should be further consultation with business to that end.

The Panel considers that timeliness and transparency issues can also be dealt with by way of parties pursuing the formal clearance process or authorisation process. It also recognised however the excessive complexity of these processes.

The Panel therefore recommended that:

  • the formal merger clearance/exemption process and merger authorisation process be combined and be reformed to remove unnecessary restrictions that have deterred their use;
  • the ACCC be the first instance decision maker for the process and should be empowered to approve a merger if it is satisfied that it will not substantially lessen competition or that it will result in public benefits that outweigh the anti-competitive detriments. This is a clear step forward in merger control in our view;
  • this process is governed by strict timelines that cannot be extended except with the consent of the merger parties; and
  • the decisions of the ACCC be subject to review by the Australian Competition Tribunal and also governed by strict timelines.

Streamlining Exemptions and a new Block Exemption Power

The Panel has recognised that the Authorisation and Notification exemption processes are very important in ensuring that conduct that may not harm competition or that may give rise to public benefits outweighing anti-competitive harm may continue via these exemptions. It recognised however that these processes have become overly complex and costly for business. Accordingly, it has recommended that:

  • the processes be simplified including by ensuring that only a single authorisation application is required for a transaction or arrangement;
  • collective bargaining notifications be simplified and made more flexible to reduce cost for small business;
  • exemption powers based on the block exemption framework in the UK and EU be introduced to supplement the current exemption processes. This will be an important addition particularly for the shipping industry given that the Panel has recommended the repeal of Part X of the Act which provided exemptions for Liner Shipping Arrangements. Under the recommendations Liner Shipping Arrangements will be like other arrangements, subject to the Act or be covered by block exemptions or authorisation; and
  • that the notification process be extended to exclude resale price maintenance (which is to remain per se illegal unless authorised or now notified).

Vertical Restrictions (other than resale price maintenance)

Again the Panel opted for simplification and streamlining of the provisions. The Panel recommended that:

  • third line forcing no longer being a per se offence indeed being prohibited only if it has the purpose or likely effect of substantially lessening competition; and
  • section 47 (the exclusive dealing provision) should apply to all forms of vertical conduct and not just the types currently specified in the provision.

Other key recommendations about the Act and process

  • Encouragement of private actions: The Panel recommended that section 83 of the Act be broadened so that it extends to admissions of fact made by a person in resolving proceedings with the ACCC to be prima facie evidence of that fact (rather than the present position where section 83 applies where a Court has made findings of fact in contested proceedings).
  • Reducing the burden of statutory notices under section 155 of the Act: The Panel recommended that the ACCC review its guidelines regarding responses to section 155 notices and that by law or guidelines, the obligation of a person to produce documents to the ACCC should be qualified by an obligation to undertake reasonable search.
  • Intellectual property and parallel imports: Consistent with the policies of universal applications of the Act and competition/additional choice, the Panel has recommended that:
  • the intellectual property exemptions of the Act (section 51(3)) be repealed and that a review be undertaken of intellectual property focusing on competition policy issued; and
    • any remaining restrictions on parallel imports be removed unless it can be shown that they are in the public interest and the objectives of the restrictions can only be achieved by restricting competition.
    • Infrastructure Access: Given the comprehensive review undertaken by the Productivity Commission into the National Access Regime, the Panel sensibly supported the Productivity Commission's Recommendations namely that the declaration criteria in Part IIIA of the Act should be targeted to ensure that third party access only be mandated when it is in the public interest and that:
    • criterion (a) should require that access on reasonable terms and conditions through declarations promote a material increase in competition in a dependent market;
    • criterion (b) should require that it be uneconomical for anyone (other than the service provider) to develop another facility to provide the service; and
    • criterion (f) should require that access on reasonable terms and conditions through declaration promote public interest.

We are preparing a more detailed note on infrastructure access issues.


The Panel concluded that there remained "important unfinished business" from the original National Competition Policy agenda across many sectors as well as new areas that it considers are in need of reform, including:

  • electricity, water and gas: contains the process of energy reform and a national framework for water;
  • planning and zoning: all governments should include competition principles in the objectives of planning and zoning legislation so that they are given due weight in decision making;
  • retail markets including pharmacy:
  • the remaining restrictions on retail trading hours should be removed;
  • the current ownership restrictions and location on retail pharmacies should be removed in the long term interest of Australian consumers;
    • taxis: regulations that restrict competition in the taxi industry should be removed including from services that compete with taxis;
    • human services, including health education and community services: governments should craft an inter-government agreement establishing choice and competition principles in the field of human services;
    • regulation review and competitive neutrality: all Australian governments should ensure that unnecessary restrictions on competition be removed and should apply competitive neutrality principles to their business activities.


In addition to the above draft recommendations that impact on small business, the Draft Report made specific recommendations for small business:

  • the ACCC should actively connect small businesses to alternative dispute resolution services;
  • the development and use of industry codes of conduct should be promoted;
  • the transparency of current competitive neutrality arrangements should be improved; and
  • regulatory restrictions, such as planning and zoning regulations that impede competition should be removed.


The Draft Report identified that, within the current framework, a gap exists in the area of competition policy advocacy, analysis and oversight. To address this deficiency, the Draft Report recommended that the National Competition Council (NCC) be replaced with a new national independent competition body, the Australian Council for Competition Policy (ACCP).

It is envisaged that the ACCP will:

  • be an advocate and educator in competition policy reform and oversee its implementation;
  • be given the power to undertake market studies at the request of any government (and possibly market participants);
  • make recommendations to relevant governments on changes to anti-competitive regulations or to the ACCC for investigation of breaches of the law; and
  • undertake an annual analysis of developments in competition policy, both in Australia and overseas.

Although the Draft Report states that competition and consumer regulation should remain with the ACCC, it suggests that the ACCC's governance would be strengthened by the addition of a Board, in order to allow business, consumer and academic perspectives to bear directly on ACCC decision-making.

Lastly, for simplification, the Draft Report recommends the introduction of a single access and pricing regulator, the Access and Pricing Regulator. Currently, access and pricing regulation is conducted by the ACCC, NCC, Australian Energy Regulator and state and territory regulators.


The Panel will now engage further on the Draft Report through public forums, and further written submissions and feedback from interested parties. Submissions are due by 17 November 2014.

In particular, the Panel is seeking comments on the following draft recommendations:

  • in relation to the reformulation of the misuse of market power rules, the Draft Report proposes to introduce a defence for rational business decisions that benefit the long-term interests of consumers. The Panel is seeking submissions on the scope of this defence;
  • in relation to the national access regime, the Panel invites further comment on the categories of infrastructure to which Part IIIA might be applied in the future, particularly in the mining sector, and the costs and benefits that would arise from access regulation of that infrastructure and whether Part IIIA should be confined in its scope to the categories of bottleneck infrastructure;
  • in relation to the proposed market studies power to be afforded to the ACCP, the Panel seeks comments on the issue of mandatory information-gathering powers and in particular whether the Productivity Commission model of having information-gathering powers, but generally choosing not to use them should be replicated in the ACCP;
  • in relation to increased governance of the ACCC, the Panel is seeking views on what Board structure the ACCC should adopt; and
  • in relation to access to remedies, the Panel invites views on whether there should be a specific dispute resolution scheme for small business for matters covered by the Act.

The Final Report is due to be provided to the Australian Government by March 2015.


1Draft Paper, page 1.

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.

Most awarded firm and Australian deal of the year
Australasian Legal Business Awards
Employer of Choice for Women
Equal Opportunity for Women
in the Workplace (EOWA)

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.

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”

Mondaq Advice Centre (MACs)
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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.