Australia: Government releases exposure draft amendments to the Competition and Consumer Act 2010 (Cth)

This week, the Commonwealth Government came a step closer to implementing major changes to Australian competition law recommended by the Harper Review.

The Government has released an exposure draft of the Competition and Consumer Amendment (Competition Policy Review) Bill 2016 (the Exposure Draft) for public comment (accessible here). The proposed amendments to the Competition and Consumer Act 2010 (Cth) (the Act), follow prolonged review and consultation on the recommendations of the Harper Review handed down in March 2015.

Although much of the public debate has focused on changes to the prohibition on misuse of market power, and the introduction of a "concerted practices" prohibition, the Exposure Draft also contains a range of other significant reforms.

The proposed amendments are broadly in keeping with the Government's November 2015 response to the Harper Review. To coincide with the release of the Exposure Draft, the ACCC has published draft frameworks regarding its proposed approach to enforcement of the new misuse of market power and concerted practices provisions (accessible here). These follow specific recommendations of the Harper Review regarding the need for ACCC guidance in these areas.

Our analysis of the key proposed changes and ACCC guidance is below.

  1. Misuse of market power

The Government is introducing the long foreshadowed 'effects test' into the prohibition on the misuse of market power in section 46 of the Act. Under this change, any conduct by a corporation with substantial market power that has the purpose, effect or likely effect of substantially lessening competition, would be prohibited. The current "proscribed purpose" threshold and "take advantage" limb, would be repealed.

The Government has also adopted the Harper Review's recommendation to include legislative directions to the Court to consider certain factors when determining whether conduct has the requisite purpose or effect. In summary, these factors require the Court to consider whether the conduct has:

  • any pro-competitive characteristics (e.g. price competitiveness, or efficiency or quality improvements); and
  • any anti-competitive characteristics (e.g. preventing or deterring the potential for competitive conduct or new market entry).

For the first time, corporations will also be able to seek exemption from the new section 46 through the ACCC authorisation process (if it satisfies a "net public benefit" test). In addition, the current predatory pricing prohibition will be repealed; although below cost pricing will continue to be susceptible to challenge under section 46 of the Act.

To coincide with the release of the Exposure Draft, the ACCC has released a Framework for misuse of market power guidelines (MMP Framework). The MMP Framework outlines the ACCC's approach to interpretation and enforcement of the proposed amendments to section 46, including examples of the types of conduct it views are likely to breach the new prohibition. The MPP Framework (alongside that released in relation to concerted practices, discussed below) will form the basis for future ACCC guidance.

Beyond stating the objectives of the amended provision, namely to safeguard competitive markets and not to protect individual competitors, the MMP Framework outlines the ACCC's interpretation of the elements of the new prohibition. For instance, there is discussion of the concepts of "market", "substantial degree of power in a market" and "substantially lessening competition". In this regard, the MPP Framework draws on well-established meanings attributed to these elements.

These are accompanied by illustration of the types of conduct that in the view of the ACCC are either likely or unlikely to contravene the new provision. These include "bundling/tying", "land banking", and "predatory pricing". The examples provided are highly simplified, and provide few insights into how the ACCC might approach the new section 46 in more complex or marginal cases.

  1. Concerted practices

The Exposure Draft introduces the concept of "concerted practice" to the Act, borrowed from EU law. The concept effectively extends the prohibition in section 45 in the Act that applies to contracts, arrangements or understandings that have a purpose, effect or likely effect of substantially lessening competition. It does so by adding anti-competitive conduct that is "concerted" but falls short of an arrangement or understanding. However, "concerted practice" will be undefined.

The price signalling provisions of the Act will be repealed, as the Government expects this type of conduct will now be captured by a broadened, general prohibition contained in section 45.

The ACCC has also released in draft its Framework for concerted practices guidelines (CP Framework), as was recommended as part of the Harper Review. In it, the ACCC outlines its approach to the proposed concerted practices prohibition, adopting the European and British definition as conduct that "is a form of coordination between competing business by which... practical cooperation between them is substituted for the risks of competition."1

The CP Framework also includes several examples of conduct that the ACCC considers a concerted practice. Generally, the examples feature a private exchange or disclosure of information between parties that leads to co-operative behaviour (as opposed to truly independent action).

  1. Cartel conduct

The Act prohibits various forms of cartel conduct, for example price-fixing, bid-rigging, market-sharing and restrictions on output. The Exposure Draft seeks to amend the Act's cartel laws, by broadening the exemption that currently applies to provisions in contracts that are for the purposes of a joint venture. In relation to joint ventures, the changes would extend the exemptions to:

  • include provisions in arrangements and understandings, not just contracts, and where they relate to the acquisition of goods or services (in addition to the production or supply of goods or services); and
  • include provisions that are reasonably necessary for undertaking a joint venture (currently the exemption is only for cartel provisions that are for the purposes of that joint venture).

In addition to these changes, the Act's cartel laws would also be amended by:

  • restricting the cartel laws to conduct occurring in trade or commerce in Australia, or between Australia and places outside Australia;
  • repealing the specific definition of "likely" in the cartel laws (so that likely is interpreted as "more probable than not", rather than "a possibility not remote"). This is intended to raise the threshold for application, so that the cartel laws do not inadvertently capture corporations that are not in competition with each other; and
  • replacing the current exception for exclusive dealing with a broader range of exemptions, where the supply or acquisition of goods or services is conditional on another obligation (known as vertical restrictions).

The broadened exception for vertical restrictions would mean that conduct such as third line forcing would now also be exempt from the cartel laws. These types of conduct would remain subject to the anti-competitive conduct provisions elsewhere in the Act.

In addition, the Exposure Draft proposes to repeal the separate prohibition on exclusionary provisions (or "primary boycotts"), contained in section 45(2) of the Act. The definition of exclusionary provisions in section 4D of the Act would also be repealed. To address any resulting gap in the law, the Government proposes to extend the prohibition on cartel conduct to provisions of contracts, arrangements or understandings that seek to prevent, restrict or limit the acquisition (or likely acquisition) of goods or services.

  1. Mergers

The separate formal merger clearance and authorisation provisions contained in the Act are to be replaced with a new consolidated provision for all authorisations under section 88 of the Act (we discuss this further with respect to other authorisations below).

This will make the ACCC the first instance decision-maker for all authorisations, including for mergers. Parties will no longer be able to seek a merger authorisation directly from the Australian Competition Tribunal (the Tribunal). Decisions of the ACCC will be reviewable by the Tribunal on application from the parties, but only insofar as they relate to the ACCC's reasons for its determination (and not as a full re-hearing of any matter). This is intended to ensure that all matters relevant to the merger authorisation are put to the ACCC in the first instance.

  1. Third line forcing

The Government has followed the Harper Review's recommendation to remove the automatic (or "per se") prohibition currently applied to third line forcing. Third line forcing involves the supply of goods or services on condition that the purchaser also acquires goods or services from an unrelated party.

In place of the per se prohibition on third line forcing, the Exposure Draft will apply a competition test, so that third line forcing will be unlawful where it has the purpose, effect or likely effect of substantially lessening competition. This would align the enforcement of third line forcing conduct with other types of exclusive dealing under the Act.

  1. RPM notifications

The Government proposes to retain the per se prohibition on supplier restraints on resale prices, known as resale price maintenance (RPM). This is in keeping with its earlier support for the Harper Review's recommendation. However, it has also proposed changes that:

  • amend the meaning of RPM so that conduct between related companies is now exempt; and
  • bring RPM within the notification process in section 93(1) of the Act. This seeks to ease the burden on corporations seeking immunity for RPM.

Under the notification process, a corporation can seek immunity by giving notice of the proposed conduct to the ACCC. The proposed notification process for RPM would be similar to that currently in place for third line forcing, in that exemption would only be granted after a prescribed period has passed. Unlike the 14 day waiting period for third line forcing however, the proposed 'waiting' period will be 60 days from the day when valid notice is given (subject to any changes in this time period made under the Competition and Consumer Regulations 2010 (Cth)).

Also, as RPM remains prohibited per se, the test for RPM notifications will not look to whether the conduct would have the effect, or likely effect, of substantially lessening competition. Instead it will only apply a net public benefit test (granting immunity where the likely public benefit would outweigh the likely detriment flowing from the conduct).

As part of the amendments, the ACCC may also impose conditions on the applicant as part of the notification process. The ACCC has not clarified the types of conditions it will apply, although the approach in the 2014 Tooltechnic Systems (Aust) Pty Ltd authorisation may provide some insight. In that matter, the ACCC granted authorisation on the condition that it received regular sales information to allow it to monitor any impact of the RPM.

  1. Access

The National Access Regime contained in Part IIIA of the Act (Access Regime) is to be amended, particularly with respect to the criteria that form the basis for a declaration for access to a service. In this regard the Government has opted to follow recommendations of the 2013 Productivity Commission Report on the Access Regime, rather than those of the Harper Review.

The declaration criteria previously contained in sections 44G and 44H of the Act are to be consolidated into a new section (proposed section 44CA). If the Exposure Draft is passed, they will require the Minister to be satisfied that:

  • access, or increased access, on reasonable terms and conditions, following a declaration would promote a material increase in competition;
  • the service to be accessed could meet the total foreseeable demand in the market at the least cost (changed from the current criterion "that it would be uneconomical for anyone to develop another facility", interpreted by the High Court as a "private profitability" test2);
  • the facility that provides the service is of national significance (this is unchanged from the current criterion); and
  • access, or increased access, on reasonable terms and conditions, would promote the public interest (as opposed to consideration of whether it is contrary to the public interest).

Overall, the changes are likely to lower the bar for a declaration.

The Minister will be taken to have made the declaration if they have not published their decision within 60 days of receiving a recommendation from the National Competition Council. This reverses the current position that a declaration is deemed not to have been made in the absence of a published decision.

Also included in the Exposure Draft's provisions is a power for the Minister to revoke certification of an "effective access regime". The effective access regime operates as a way for State or Territory Governments (on the recommendation of the National Competition Council), to seek immunity for a particular service from a declaration for access. Under the Exposure Draft's provisions, the Commonwealth Minister will be able to revoke this immunity, after a recommendation by the National Competition Council.

  1. Authorisation by the ACCC

The Exposure Draft includes additional measures aimed at simplifying the authorisation process (beyond those discussed in relation to mergers, above). The proposed changes include:

  • simplifying the matters the ACCC must be satisfied of in granting an authorisation, to:
    • whether the conduct in question would have the effect, or likely effect, of substantially lessening competition; or
    • whether that conduct would result in, or be likely to result in, public benefits that outweigh any detriment resulting from the conduct.
  • providing the ACCC with "class exemption" powers, allowing it to exempt particular types or categories of conduct, provided that conduct is unlikely to substantially lessen competition or is likely to generate a net public benefit;
  • allow later parties to join a collective bargaining process after it has commenced; and
  • allow the ACCC to impose conditions on a collective bargaining process.

The ACCC has not yet published any guidance regarding the kinds of conduct it considers may warrant a class exemption.

  1. Conduct of ACCC investigations

There are proposed amendments to the powers of the ACCC to conduct investigations under section 155 of the Act. These follow the Harper Review's comments regarding the high cost of compliance with a section 155 notice to produce documents, given it can require extensive searching of large volumes of digital data.3

Recognising this, the Government has included in the Exposure Draft a "reasonable search" defence. This would mean that, when served with a notice under section 155 to produce documents, a party will not be guilty of an offence if they are not aware of the documents after undertaking a reasonable search for them.

The Exposure Draft also includes further powers for the ACCC to investigate a party's compliance with an undertaking given to it under section 87B of the Act (referred to as "court-enforceable undertakings"). Currently the ACCC is not able to issue a notice under section 155 to compel production of documents to investigate an alleged breach of such an undertaking. The penalty for non-compliance with a notice issued under section 155 is also increased to $180,000 or two years' imprisonment.

  1. Next steps

Whilst the Exposure Draft includes some measures to simplify the Act, there remain others recommended by the Harper Review that have been left out. These include the recommended repeal of the prohibition on exclusive dealing, and further simplification of the cartel conduct provisions. It remains to be seen whether the Government will seek to adopt these other measures in the near future.

Consultation on the Exposure Draft is now open and submissions can be made until 30 September 2016. Submissions can be made through an online survey (available here) facilitated by the Commonwealth Treasury (this includes an opportunity to upload a submission). Alternatively, submissions can still be made by emailing or posting them to Commonwealth Treasury.

The ACCC is also accepting submissions regarding its draft guidance. These can be made until 3 October 2016 by email to the details included on its website.

If you have any questions as to how the proposed amendments or the ACCC guidance will impact your business, or would like assistance in preparing a submission to the consultation, please contact a member of our team.


1 Australian Consumer and Competition Commission, Draft Framework for concerted practices guidelines (September 2016), 3. ICI v Commission [1972] ECR 619, [64].

2 Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal (2012) 246 CLR 379.

3 Harper Review, Final Report, (31 March 2015), 419.

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.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

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”

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.