Australia: Major competition law reform imminent: Exposure draft legislation released

Last Updated: 13 September 2016
Article by Andrew Rankine and Michelle Hyams
Services: Competition & Consumer Law, Corporate & Commercial, Property & Projects
Industry Focus: Life Sciences & Healthcare

What you need to know

  • The Federal Government has released an exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Bill signalling the biggest change to Australian competition law in years.
  • The exposure draft of the Bill proposes to introduce a new 'concerted practices' prohibition and vary the misuse of market power provision to bring in an effects test.
  • Those interested in making submissions on the exposure draft Bill, or on the ACCC's draft framework for approaching these two proposed changes, will need to act quickly.

On 5 September 2016 the Federal Government released an exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Bill (Bill). The release of the Bill signals the biggest change to Australian competition law in years.

The purpose of the Bill is to implement reforms recommended by the Harper Competition Policy Review. These include changes to the Competition and Consumer Act 2010 (Cth) (CCA) to:

  • amend the existing misuse of market power prohibition (section 46) by introducing the 'effects test'
  • introduce a new offence, being a prohibition against concerted practices amongst competitors.

Alongside the Bill's release, the ACCC released draft framework documents setting out its proposed approach to each of these two changes if they are implemented. The ACCC is seeking submissions on its draft frameworks, due by 3 October 2016.

Misuse of market power

One of the more controversial recommendations from the Harper Competition Policy Review, which has been the subject of lively discussion and debate in recent months, is the proposed change to the misuse of market power provisions in section 46 of the CCA. The proposal is to move away from the current test which looks only at purpose of particular conduct, to include a new test that also looks at effects of that conduct (the so-called 'effects test'). The Harper Committee considered that the existing 'take advantage' limb of the section was not a useful test by which to distinguish competitive from anti-competitive unilateral conduct.

Proposed section 46

  1. A corporation that has a substantial degree of power in a market must not engage in conduct that has the purpose of, or has or would be likely to have the effect of, substantially lessening competition in that or any other market.
  2. Without limiting the matters to which regard may be had in determining for the purposes of subsection (1) whether conduct has the purpose of, or has or would be likely to have the effect of, substantially lessening competition in a market, regard must be had to the extent to which:
    1. the conduct has the purpose of, or has or would be likely to have the effect of, increasing competition in the market, including by enhancing efficiency, innovation, product quality or price competiveness in the market; and
    2. the conduct has the purpose of, or has or would be likely to have the effect of, lessening competition in the market, including by preventing, restricting, or deterring the potential for competitive conduct or new entry into the market.

For example, under the existing law, the ACCC or an aggrieved party bears the burden of proving that corporations engaging in a sustained practice of predatory pricing are doing so for a prohibited purpose. Under the proposed new law, the ACCC would not need to establish a prohibited purpose, only that the conduct would be likely to have the effect of substantially lessening competition. This is a significantly lower bar than the existing test.

The proposed change to section 46 has been divisive with some saying that the new test would "have a chilling effect on competition", while primary producers are hopeful that the test will curb the power of large retailers.

As the ACCC importantly notes in its draft 'Framework for misuse of market power guidelines', the intended effect of the change is that competition, not individual competitors, would be protected.

Concerted practices

While the concept of 'concerted practices' is new in Australian law, it is well established in competition law internationally.

The existing section 45 of the CCA prohibits corporations from making or giving effect to "contracts, arrangements and understandings" that have the purpose, effect or likely effect of substantially lessening competition. If the Bill is enacted, corporations will also be prohibited from engaging in a 'concerted practice' that has the purpose, effect or likely effect of substantially lessening competition. Importantly, it is intended that conduct will be prohibited even where competitors do not reach any arrangement, understanding or contract with each other.

Proposed section 45

  1. A corporation must not:...
    1. engage with one or more persons in a concerted practice that has the purpose, or has or is likely to have the effect, of substantially lessening competition.

Adopting the Harper Committee's view that "the word concerted has a clear and practical meaning and no further definition is required for the purposes of a legal enactment", the Bill does not include a definition for 'concerted practices'.

According to the ACCC's draft 'Framework for concerted practices guidelines', "a concerted practice is a form of coordination between competing businesses by which, without them having entered a contract, arrangement or understanding, practical cooperation between them is substituted for the risks of competition."

If the Bill becomes law, the deliberate provision to competitors of commercially sensitive strategy, pricing, pricing intention, tender responses, product range changes, or bid range at auction (or similar conduct), in the absence of a legitimate commercial justification for such exchanges of information, will be prohibited.

The practices are only intended to be prohibited where they have the purpose, effect or likely effect of substantially lessening competition. Unilateral conduct by a party without any form of prior cooperation with its competitors is also not intended to be caught by the prohibition.

If the Bill becomes law, the ACCC will issue detailed guidelines to assist business and consumers to understand how the proposed prohibition will operate (foreshadowed in its draft framework document). Additionally, authorisation may be granted by the ACCC to parties wanting to engage in concerted practices if the ACCC can be satisfied that the likely public benefits will outweigh the likely public detriment flowing from the concerted conduct.

Other proposed amendments

Among other things, the Bill also contains reforms proposed by the Harper Committee to:

  • cartel provisions;
  • price signalling provisions; and
  • exclusionary provisions.

The full text of the Bill and draft Explanatory Material can be accessed here at:

Want to have your say on the proposed reform?

Businesses and other stakeholders who wish to make submissions on the exposure draft legislation or the ACCC's draft frameworks will need to act quickly, with submission deadlines looming. They are:

  • Friday 30 September 2016 for submissions to the Government on the exposure draft of the Bill. Submissions can be made either through providing written submissions or participating in an online survey at:
  • 3 October 2016 for submissions to the ACCC on its proposed draft frameworks. Interested parties can make submissions on both the draft 'Framework for concerted practices guidelines' and draft 'Framework for misuse of market power guidelines'.

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this article. Authors listed may not be admitted in all states and territories

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.

Michelle Hyams
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
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.