Key points
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Schedule 1 of this Bill amends the Competition and Consumer Act 2010 (Cth) to strengthen the prohibition of the misuse of market power.
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Telecommunications-specific anti-competitive conduct provisions will be repealed as a result of the amendment.
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Effective date of the legislation is still to be proclaimed, it will be no later than 6 months after Royal Assent.
Schedule 1 of the Misuse of Market Power Bill amends the Competition and Consumer Act 2010 (Cth) (Act) to strengthen the prohibition of the misuse of market power.
Schedule 1 to this Bill amends section 46 of the Act to prohibit a corporation (that has a substantial degree of market power) engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition in:
- that market; or
- any market in that the corporation itself, or a related body corporate, supplies or acquires goods or services or is likely to supply or acquire goods or services; or
- any market in which the corporation indirectly supplies or acquires goods or services or is likely to supply or acquire goods or services.
Schedule 1 to this Bill also makes equivalent changes to Schedule 1 to the Act, as applied to persons.
Legislative Amendments
Misuse of Market Power Bill introduced to parliament, 1 December 2016
The Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 (Cth) was introduced to the House of Representatives on 1 December 2016.
It was referred to the Senate Economics Legislation Committee. A report is due on 16 February 2017.
Schedule 1 of this Bill amends the Competition and Consumer Act 2010 (Cth) (Act) to strengthen the prohibition of the misuse of market power.
Schedule 1 amends section 46 of the Act to prohibit a corporation (that has a substantial degree of market power) engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition in:
- that market; or
- any market in that the corporation itself, or a related body corporate, supplies or acquires goods or services or is likely to supply or acquire goods or services; or
- any market in which the corporation indirectly supplies or acquires goods or services or is likely to supply or acquire goods or services.
The Schedule also makes equivalent changes to Schedule 1 of the Act, as applied to persons.
Comparison of legislation prior to the amendments and the new legislation
| New law |
Current law |
| Section 46 only applies to corporations with substantial market power. |
Section 46 only applies to corporations with substantial market power. |
| The conduct must have the purpose, effect or likely effect of substantially lessening competition. |
The conduct must have one of three specific purposes, related to damaging an actual or potential competitor. |
| The conduct must occur in a market where there is an actual or likely supply or acquisition of goods or services, by the corporation or another prescribed entity. |
The conduct may occur in any market. |
| The conduct does not need to “take advantage” of substantial market power. |
The conduct must “take advantage” of substantial market power. |
| There is a general provision only, with no specific prohibition on predatory pricing or other forms of conduct (however described). |
Predatory pricing and other specific forms of conduct are expressly prohibited. |
| Certain pro-competitive and anti-competitive factors must be taken into account when considering a substantial lessening of competition. |
“Substantial lessening of competition” is not an element of s 46. |
Consequential Amendments
Schedule 2 to the Bill makes consequential amendments to repeal the telecommunications-specific anti-competitive conduct provisions in Division 2 of Part XIB of the Act and the competition notices and exemption order regime in Division 3 of Part XIB. These provisions are no longer necessary given the strengthening of the prohibition of the misuse of market power that is applicable to all industry sectors.
Effective Date of Amendments to the Act
The effective date of the amendments is still to be proclaimed, at the latest they will commence six months after Royal Assent.
If you would like more information about this article, please contact John Kell at [email protected].
This article is a reproduction of the following article published by ASIC, Source: ASIC media release 16-412
Post by Cara McKenna and John Kell