Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

  Civil and criminal prohibitions are respectively set out in Sections 45AF, 45AG and 45AH, 45AJ and 45AK of the Act. Their elements are the same except that the standard of proof is higher in case of a criminal offense which furthermore requires a fault. …

Civil or criminal offenses

   According to Section 45AD of the Act, a provision of a contract, arrangement or understanding is a cartel provision if:

- (a) either “the purpose/effect condition” set out in subsection (2) or “the purpose condition” set out in subsection (3) and

- (b) “the competition condition” set out in subsection (4) are satisfied.

“The purpose/effect condition” is satisfied if the provision has the purpose, or has or is likely to have the effect, of directly or indirectly fixing, controlling or maintaining a price or a component of a price.

“The purpose condition” is satisfied if the provision has the purpose of directly or indirectly:

- (a) preventing, restricting or limiting outputs in the production and supply chain or the supply or acquisition of goods or services from particular persons or classes of persons (exclusionary conduct formerly constituting a specific offense and integrated in the definition of cartels by the 2017 amendments);

- (b) allocating customers, suppliers or territories;

  The competition condition is satisfied if at least 2 of the parties to the contract, arrangement or understanding are or are likely to be or but for any contract, arrangement or understanding, would be or would be likely to be in competition with each other.

In addition, Section 45 prohibits contracts, arrangements or understandings that, without meeting the conditions to be classified as cartels, are likely to substantially lessen competition in a market. According to the ACCC, “an effect is considered to be substantial if it is important or weighty in relation to the size of the particular market”.

The prohibition 

  Civil and criminal prohibitions are respectively set out in Sections 45AF, 45AG and 45AH, 45AJ and 45AK of the Act. Their elements are the same except that the standard of proof is higher in case of a criminal offense which furthermore requires a fault.

Price fixing in Australia is deemed to substantially lessen competition and is treated as a per se violation of the CCA. Any agreement between competitors that has the purpose or likely effect of fixing, controlling or maintaining either the price, discounts, allowances, rebates or credits for goods or services constitutes illegal price fixing (Section 45AD). Recommending prices may not be per se considered as amounting to price fixing.

The Courts have held that in order to establish a price fixing violation, the agreement must have some horizontal character. Thus, at least two parties to the agreement must be competitors; it is not necessary that all parties be competitors (Trade Practice Comm'n v. David Jones Pty. Ltd., 13 F.C.R. 446, 473, 1986, Fed. Ct.). The manner in which prices are fixed, or the length of time is not determinative in evaluating whether price fixing occurred, although it must be established for a period that is not “merely ephemeral” (Radio2UE Sydney Pty. Ltd. v. Stereo FM Pty. Ltd., 5 F.C.R. 140, 1985, Fed. Ct.).

The 2017 amendments introduced a new prohibition on engaging “in a concerted practice that has the purpose, or has or is likely to have the effect, of substantially lessening competition” in order to cover practices that are neither contracts, arrangements, or understandings. According to the Explanatory Memorandum to the Bill, the concept of concerted practice refers to “any form of cooperation between two or more firms (or people) or conduct that would be likely to establish such cooperation, where this conduct subtitutes or would be likely to subtitute, cooperation in the place of the uncertainty of competition”.

The Act was amended in 1996 to include regulation of secondary boycotts. A secondary boycott occurs when two or more parties act to hinder or prevent third parties from dealing with the target business (a fourth party). Separate Sections of the Act address secondary boycotts aimed at causing substantial loss or damage (Section 45D), and those directed at substantially lessening competition (Section 45DA) or at affecting trade or commerce (Section 45DB).

A secondary boycott requires concerted action by two or more parties, meaning that the parties must have a common purpose and must act relatively contemporaneously (Australian Builders Labourers Federated Union of Workers v. J-Corp. Pty. Ltd., 42 F.C.R. 452, 1993, Fed. Ct.).

The CCA specifies a number of exemptions to the prohibition on secondary boycotts. According to Section 45DD(1) and (2), if the dominant purpose of the boycott is substantially related to remuneration, conditions of employment, hours of work or the working conditions of employees, then there is no infringement of the secondary boycott provisions set out at Sections 45D(1), 45DA(1), 45DB(1). An exception also exists where the dominant purpose of a boycott relates to environmental or consumer protection (Section 45DD(3)). This does not mean, however, that all union activities are exempt. The activities of a union may violate the secondary boycott provisions if, for example, the union does not have a dispute with an employer but engages in a boycott solely in support of another union.

Vertical restraints such as exclusive dealing are addressed under the prohibition set out at Section 47(1). Exclusive dealing occurs where an undertaking supplies goods or services only on certain conditions. Often, the condition is that the purchaser will not acquire goods or services from a competitor, or will agree to restrictions on the right to resell the goods and services to third parties or within a geographic area. At least three different types of exclusive dealing can be identified: (1) product exclusivity; (2) customer exclusivity; (3) territorial exclusivity.

Product exclusivity can be in the form of a requirement whereby a purchaser agrees to satisfy a percentage of its production needs from a particular distributor. Where a purchaser agrees to satisfy all of its requirements from a particular supplier, this could decrease competition by excluding competitors of that supplier from a portion of the market. On the other hand, where a buyer agrees to purchase a certain quantity of a product, this is less likely to limit competition since the buyer is free to deal with other suppliers in response to market needs. The bundling together of two products in the same contract, i.e. tying, so that the purchaser must buy both, may also be considered anticompetitive under Section 47.

Customer exclusivity may be prohibited whether it requires a trading partner to deal only with particular parties, or requires a trading partner not to deal with specified parties. If the parties to the agreement are competitors, then such an agreement could be treated as an anticompetitive horizontal agreement barred by Section 45. Where the parties operate at different levels of the production scheme, then such exclusionary conduct is governed by Section 47.

Territorial exclusivity involves a refusal to deal except with specified dealers or within a specified area. Territorial exclusivity is prohibited where it has the purpose or likely effect of substantially lessening competition in the relevant market.

The Act formely contained a per se prohibition of a specific form of exclusive dealing where a business will only supply goods or services, or give a particular price or discount on the condition that the purchaser buys goods or services from a particular third party. This practice, known as “third line forcing”, is since the 2017 amendments, only illegal when it has the effect of substantially lessening competition.

A corporation cannot supply a customer on condition that he will not resale the goods at a price less than that it specified, except in the case of loss leading (see Sections 48 and 96). Since the 2017 amendments, resale price maintenance is no longer prohibited between bodies related to each other (Section 96(8)).

Specific offenses

Under Section 45AO of the CCA, the cartel prohibition does not apply in relation to a contract, arrangement or understanding containing a cartel provision if the defendant proves that the cartel provision is for the purposes of a joint venture and  reasonably necessary for the set up of the joint venture. For this exception to apply, the joint venture must have as its object the production of goods, and/or the supply of goods or services and/or the acquisition of goods or services and it must not be carried on for the purpose of substantially lessening competition. The 2017 amendments have significantly broadened the scope of the exception as it previously only applied to contracts and to joint ventures created for the purpose of the production of goods. The burden of proof that the joint venture complies with all those requirements lies on the defendant.

Part VII of the CCA provides for a notification (e.g. to obtain an exemption in case of collective bargaining, or since the 2017 amendments, for resale price maintenance, as an alternative to the authorization process) and an authorization procedure whereby the ACCC is empowered to grant immunity when it is satisfied that otherwise anticompetitive conduct is likely to result in a net public benefit. Section 88 specifies that the ACCC can grant authorizations relating to anticompetitive agreements, covenants affecting competition, primary and secondary boycotts, exclusive dealing, resale price maintenance and other potentially anticompetitive arrangements.

The public benefits that the ACCC has recognized in the past as justifying otherwise anticompetitive conduct include: increasing employment (or preventing unemployment), improving international competitiveness, economic development of natural resources (through research or exploration), assistance to small businesses, environmental benefits, safety improvements, improvements for consumers such as better quality or choice, and industry rationalization increasing the efficiency of resource allocation.

Parties can apply to the ACCC to obtain an authorization on public benefit grounds. Applications for authorization must set out the relevant market and any specific characteristics it may have, a description of the parties, whether there exists other stakeholders in the market, the nature of the behavior and the benefits likely to result from same.

Each notification or application for authorization is allocated a unique registered number. A separate public register file is created for each application for authorization and public access is available to the contents of that file, except for those contents with respect to which the ACCC has granted a request for confidentiality.

The onus is on the applicant to satisfy the ACCC that there is public benefit arising from the conduct and that the public benefit outweighs any detriment that might be caused as a result of a lessening of competition. The ACCC may request meetings with interested parties and any party may ask to be included in the assessment process. Although the process is generally public, the ACCC will consider requests for confidentiality where founded.

From 13 September 2019, exemptions from competition law rules previously provided for in Subsection 51(3) of the CCA for the conditional licensing or assignment of certain IP rights including patents, registered designs, copyrights and eligible circuit layout rights, have been repealed. Henceforth, competition law fully applies to such arrangements and the ACCC released guidelines reflecting its future approach of the issue.

Finally, the 2017 amendments empower the ACCC to determine “class exemptions”. Under Section 95AA, the ACCC may, by legislative instrument, determine that one or more specified provisions of Part IV of the CCA relating to restrictive trade practices do not apply to a kind of conduct specified in the determination, if the Commission is satisfied that such conduct would not have the effect, or would not be likely to have the effect, of substantially lessening competition; or that such conduct would result, or would be likely to result, in a benefit to the public that would outweigh the detriment to the public that would result, or would be likely to result, from conducts of that kind.

Global Competition Law

792. Civil or criminal offenses

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Les notions juridiques connexes

792. Civil or criminal offenses

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise