By Kirsten Webb and Paul Burton -
Snapshot
- Under new amendments to the Competition and Consumer Act, firms with a substantial degree of market power will now need to carefully consider whether any conduct they engage in, or propose to engage in, could have the purpose, or likely effect, of substantially lessening competition in any Australian market.
- Firms will also, for the first time, be able to apply to the ACCC to authorise the firm engaging in conduct which might otherwise contravene the law.
- The amendments are likely to come into force in early 2018.
On 14 August 2017 the Senate passed the Competition and Consumer Amendment (Misuse of Market Power) Act 2017 (Cth) (‘Amendment Act’). Royal assent was given on 23 August 2017. The Amendment Act introduces a new s 46 into the Competition and Consumer Act 2010 (Cth) (‘CCA’).
The new provision states that a corporation that has a substantial degree of power in a market must not engage in conduct that has the purpose, or has or is likely to have the effect, of substantially lessening competition in that market or any other market in which the corporation (or a related body corporate) supplies or acquires goods or services or is likely to do so.
While the ACCC and many market participants, including small businesses, will welcome these changes, others argue that the changes will lead to economic inefficiency, and legal doubt and uncertainty that may increase compliance and legal expenses, and cause a reduction in investment by large firms.
The new provision is expected to commence in the first half of 2018, depending on the passage of the other Harper-related amendments in the Competition and Consumer Amendment (Competition Policy Review) Bill 2017, which is currently before the Senate.
