New legislation on competition law introduced
Industry bodies have heralded a new era for small businesses following the government’s announcement of legislative amendments to Australian competition law.
The Competition and Consumer Amendment (Competition Policy Review) Bill passed Parliament today, following the Competition and Consumer Amendment (Misuse of Market Power) Bill 2017 (Cth) which was passed on 23 August 2017.
The new legislation contains a broad range of amendments including areas such as cartels, price signalling and concerted practices, exclusionary provisions, third line forcing, resale price maintenance, merger authorisations and non-merger authorisations, notifications and class exemptions, access and evidentiary provisions.
The current ‘purpose’ test will be replaced with a ‘purpose or effects test’, prohibiting a corporation with a substantial degree of market power from engaging in conduct with the ‘purpose, effect or likely effect’ of substantially lessening competition.
The Institute of Public Accountants welcomed the announcement and said the reforms would help level the playing field for small businesses.
“These latest competition reforms and the landmark section 46 reforms need to be considered together. The reform package will collectively enhance the misuse of market power provisions and will have a real impact on the sustainability of small businesses across Australia,” said IPA chief executive Andrew Conway.
ACCC chair Rod Sims also welcomed the amendments, particularly noting the abolishment of the former merger clearance process.
“I am pleased to see these important reforms pass through the Parliament. The reforms to the misuse of market power prohibition and the new prohibition of anti-competitive concerted practices will improve our ability to target conduct harming the Australian economy,” Mr Sims said.
“The reforms also bring changes to the options available to merger parties to have their transactions cleared on either competition or net public benefit grounds. The merger authorisation and formal clearance processes will now be combined and streamlined, with the ACCC as the first-instance decision maker.”
“These new laws have far reaching implications for the Australian economy and should significantly boost growth. The Harper Review recommended these changes to enhance the benefits that should flow to consumers and businesses when markets operate efficiently.”
Minister for Small Business Michael McCormack said the reforms would roll into effect over the coming weeks and would benefit the 3.2 million Australian small businesses.
“These reforms are a key part of the Coalition government’s response to the Harper Competition Policy Review to increase choice and deliver better services and outcomes for Australian small businesses and consumers,” said Mr McCormack.
“They follow the recently legislated amendments to the misuse of market power – section 46 which will take effect shortly.
“These reforms will protect small business from anti-competitive conduct and provide a level playing field on which small businesses can compete.”
Further, the ACCC has established a Substantial Lessening of Competition Unit (SLC Unit), which will be responsible for misuse of market power and concerted practices investigations and litigation within the ACCC.
The SLC Unit will soon release guidance on the new misuse of market power and concerted practice provisions to help businesses understand and comply with these new laws.
“A dedicated team within the ACCC will work with businesses to ensure they have a clear understanding of how the changes to the law will affect them. The ACCC looks forward to the challenges and opportunities that will come with enforcing this legislation for the benefit of Australia’s economy and consumers,” Mr Sims said.