The Trade Practices Act 1974 (the Act) will finally
undergo a drastic facelift after The Dawson Bill (the
Bill) was passed by Federal Parliament. It is expected to
become law in early 2007.
Among other amendments, the Bill has introduced changes to
the provisions in the Act which deal with the powers of the
Australian Competition and Consumer Commission (ACCC) and
Australian Competition Tribunal (Tribunal) to process merger
clearances and authorisations.
The passing of the Bill provides for greater accountability,
transparency and timeliness in the decision-making of the ACCC
and the Tribunal and reduces the regulatory burden on
businesses which would like to merge.
The new provisions will include the following effects:
Formal Merger Clearance Applications
The ACCC will now have the power to determine whether to
grant formal clearance to proposed merger or acquisition
applications brought before it.
The new formal clearance system is a voluntary one and
allows the ACCC 40 business days to assess the validity of a
proposed merger or acquisition and determine whether it is
likely to effect or substantially lessen competition.
In special cases, the ACCC may extend the time to review an
application for clearance to 60 days.
This new formal system will enable companies to obtain a
more timely and efficient clearance of a proposed merger or
acquisition. It will provide the certainty of legislated time
limits, require the disclosure of reasons, allow the applicant
to appeal to the Tribunal and provide immunity from legal
action should the clearance be granted.
The Tribunal will also have increased powers under the new
Among other incidental powers, applications for
authorisation of mergers and acquisitions on public benefit
grounds will now be able to be brought directly before the
Tribunal for review and bypass the ACCC.
The new amendments also provide the Tribunal with the power
and greater flexibility procedurally to review ACCC decisions
and to grant their own authorisations in a timely manner.
Joint Venture Exemptions
The new amendments also aim to widen the joint venture
exemptions in the Act. Allegations of price-fixing or
exclusionary provisions (boycotts) by genuine joint ventures
will now be able to be defended by claims that the conduct does
not substantially lessen competition. Previously, such conduct
was strictly prohibited.
With the Bill passed, the Government will now focus it's
energies to introducing a second Bill, making further changes
to the Trade Practices Act with respect to misuse of
market power provisions and unconscionable conduct
gadens lawyers will keep you updated on any
news and events concerning these future changes.
For more information, please contact:
t (02) 9931 4724
t (02) 9931 4797
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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