Australian government to legislate change to anti-competitive conduct provisions

The Turnbull government has announced it will implement the Harper Review’s recommendation to amend Section 46 of the Competition and Consumer Act 2010, the provision which deals with misuse of market power.

The new provision will prevent firms with substantial market power from engaging in conduct that has the purpose, effect, or likely effect of substantially lessening competition. This differs from the old provision, which specified that it must be proved that the business has a ‘substantial degree’ of market power; took advantage of that power; and it did so to either damage a competitor or prevent entry of a competitor into the market.

The reception to the government’s announcement has been mixed. Philip Williams, leader of the Legal and Competition Practice at Frontier (Australia), said today: “The reactions to the proposed changes by both the advocates and opponents of the change have been absurdly extreme. The proposed changes have both good and bad elements. The proposed changes will improve Section 46 by removing some of the extra elements that have been added to the principal provision over the years. However, despite the claims of the government, the proposed changes to the principal provision are unlikely to reduce uncertainty. Indeed, the loss of jurisprudence caused by the change may well increase uncertainty. Courts in all jurisdictions find it difficult to distinguish between permissible pro-competitive conduct and impermissible abuses of monopoly power. The proposed changes are unlikely to make the task of the courts any easier.”

Frontier (Australia) currently advises major law firms and their clients on a range of competition law matters.

For more information, please contact Marita O’Keeffe at m.okeeffe@frontier-economics.com, or phone  +61 3 9620 4488.

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