- Significant changes to Australia’s competition laws came into effect on 6 November 2017.
- Some of the changes such as the new concerted practices prohibition and the broadened misuse of market power prohibition have the potential to significantly raise the risk profile of activities common to many businesses.
- The merger clearance options available to businesses have also changed.
Significant changes to Australia’s competition law came into effect on 6 November 2017. The changes are in response to the recommendations of the Competition Policy Review in 2015 (‘Harper Review’).
New concerted practices prohibition
A new prohibition against ‘concerted practices’ that have the purpose, effect or likely effect of substantially lessening competition has been introduced in s 46 of the Competition and Consumer Act 2010 (Cth). This is a new concept in Australian competition law. It is intended to target conduct that involves some level of cooperation between competitors, but is not a cartel and was not previously captured by the law because there is not a ‘contract, arrangement or understanding’ (as these have been defined by courts).
According to the Explanatory Memorandum to the Competition and Consumer Amendment (Competition Policy Review) Bill 2017 (Cth) and the Australian Competition and Consumer Commission (‘ACCC’) Interim Guidelines for Concerted Practices (currently under consultation), for ‘concerted practices’ to arise, it is not necessary for there to be any direct contact or exchange of information (for example, it can occur when parties communicate indirectly through a third party). It is also not necessary that there is any obligation or expectation that those involved will act in a particular way. Furthermore, those engaging in the concerted practice don’t need to be competitors or potential competitors. Other parties such as suppliers, distributors, industry associations and consultants could also engage in a concerted practice.
What this means
Businesses should be careful that they do not share information that would facilitate conduct by their competitors that could or is intended to have the effect of substantially lessening competition. The explanatory materials and the ACCC say that there is no requirement for reciprocity and that a ‘one way’ communication with a competitor may potentially be a concerted practice. It remains to be seen if courts will also take this view.
Businesses should review their competition law compliance programs and materials to ensure their staff are informed about this change.