New laws target misuse of market power

On 18 October 2017, the Competition and Consumer Amendment (Competition Policy Review) passed Parliament and is expected to come into effect later this month.

The introduction of the new legislation follows on from the Competition and Consumer Amendment (Misuse of Market Power) Bill 2017 (Cth) which was passed on 23 August 2017.

The legislative amendments arise following recommendations from the 2015 Harper Competition Policy Review. The Review made various recommendations aimed to increase market efficiency and increase economic growth by amending the Competition and Consumer Act 2010 (Cth).

The Competition Policy Review legislation contains amendments in relation to resale price maintenance, cartels, third line forcing, exclusionary provisions and notifications and class exemptions.

The purpose of the amendments contained in the Misuse of Market Power legislation is to toughen the proscription of corporations misusing their market power in markets in which it supplies or is likely to or does obtain goods and services.

Previously, a corporation was prohibited from using its market power to engage in conduct with the “purpose of substantially lessening competition”. The new legislation broadens the test to extend to conduct with the “purpose, effect or likely effect of substantially lessening competition”.

The Australian Competition and Consumer Commission has welcomed the new legislation and established a Substantial Lessening of Competition Unity (SLC unit) to facilitate compliance, educate, investigate and prosecute corporations in relation to misuse of market power.


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