Trade Practices Legislation Amendment Act 2008
No. 116, 2008
An Act to amend the law in relation to trade practices, and for related purposes
Contents
1 Short title
2 Commencement
3 Schedule(s)
Schedule 1—Misuse of market power by corporations
Trade Practices Act 1974
Schedule 2—Misuse of market power by persons
Trade Practices Act 1974
Schedule 3—Other amendments
Australian Securities and Investments Commission Act 2001
Trade Practices Act 1974
Trade Practices Legislation Amendment Act 2008
No. 116, 2008
An Act to amend the law in relation to trade practices, and for related purposes
[Assented to 21 November 2008]
The Parliament of Australia enacts:
1 Short title
This Act may be cited as the Trade Practices Legislation Amendment Act 2008.
2 Commencement
This Act commences on the day after it receives the Royal Assent.
3 Schedule(s)
Each Act that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.
Schedule 1—Misuse of market power by corporations
Trade Practices Act 1974
1A After subsection 46(1)
Insert:
(1AAA) If a corporation supplies goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying the goods or services, the corporation may contravene subsection (1) even if the corporation cannot, and might not ever be able to, recoup losses incurred by supplying the goods or services.
3 Subsections 46(3), (3A) and (3C)
Omit “Court”, substitute “court”.
4A Subsection 46(4A)
Omit “Court” (wherever occurring), substitute “court”.
5 After subsection 46(6)
Insert:
(6A) In determining for the purposes of this section whether, by engaging in conduct, a corporation has taken advantage of its substantial degree of power in a market, the court may have regard to any or all of the following:
(a) whether the conduct was materially facilitated by the corporation’s substantial degree of power in the market;
(b) whether the corporation engaged in the conduct in reliance on its substantial degree of power in the market;
(c) whether it is likely that the corporation would have engaged in the conduct if it did not have a substantial degree of power in the market;
(d) whether the conduct is otherwise related to the corporation’s substantial degree of power in the market.
This subsection does not limit the matters to which the court may have regard.
7 Subsection 86(1A)
After “arising under”, insert “section 46,”.
Schedule 2—Misuse of market power by persons
Trade Practices Act 1974
1A After subsection 46(1) of the Schedule
Insert:
(1AAA) If a person supplies goods or services for a sustained period at a price that is less than the relevant cost to the person of supplying the goods or services, the person may contravene subsection (1) even if the person cannot, and might not ever be able to, recoup losses incurred by supplying the goods or services.
3 Subsections 46(3),…
Overview
The Trade Practices Legislation Amendment Act 2008 (No. 116, 2008) was enacted to amend the law concerning trade practices, particularly addressing the misuse of market power by corporations and individuals. The Act was passed by the Parliament of Australia and received Royal Assent on 21 November 2008. One of its primary objectives is to reinforce the enforcement against the misuse of market power by corporations and persons by clarifying the criteria that courts can consider when determining if a party has exploited their substantial market power. Additionally, the Act makes several amendments to the Trade Practices Act 1974 and the Australian Securities and Investments Commission Act 2001, including changes to procedural aspects and the appointment requirements for the Deputy Chairperson of the Australian Competition and Consumer Commission.
Scope and Application
The Trade Practices Legislation Amendment Act 2008 amends the Trade Practices Act 1974 and the Australian Securities and Investments Commission Act 2001 to address the misuse of market power by corporations and individuals. This Act applies to corporations and individuals engaging in conduct that constitutes a misuse of market power, specifically when they supply goods or services at prices below their relevant cost over a sustained period, potentially without the ability to recoup those losses. The Act extends its jurisdiction nationally, as it pertains to Commonwealth law. The amendments also refine the factors a court may consider when determining if conduct constitutes a misuse of market power, including whether the conduct was facilitated by the entity's market power, relied upon it, or would have occurred regardless of the power. Additionally, the Act introduces modifications to the Australian Securities and Investments Commission Act 2001, focusing on procedural adjustments concerning court references and the timing of certain powers exercised by Commission members. The Act's provisions apply to conduct occurring after its commencement, including contracts made before and after this change in legislation.
Key Provisions
- The Trade Practices Legislation Amendment Act 2008 (No. 116, 2008) makes several key amendments to the Trade Practices Act 1974 and the Australian Securities and Investments Commission Act 2001. Section 1A of Schedule 1 amends the Trade Practices Act 1974 to include a provision that a corporation or a person can contravene section 46(1) if they supply goods or services at a price below their relevant cost for a sustained period, even if they cannot recoup the incurred losses. This provision is aimed at preventing predatory pricing practices that can harm competition. Section 3 of Schedule 1 and Section 3 of Schedule 2 update references to "Court" to "court" in subsections 46(3), (3A), and (3C) of the Trade Practices Act 1974, ensuring consistency in the text. Section 4A and Section 4A of the Schedules also make similar updates in subsection 46(4A). Section 5 and Section 5 of Schedule 1 and Schedule 2, respectively, introduce new subsection 46(6A) to guide courts in determining if a corporation or a person has taken advantage of their market power by engaging in certain conduct. These amendments are designed to provide more clarity and guidance to courts in assessing anti-competitive behaviour.
- The Act imposes obligations on corporations and persons to ensure that they do not engage in conduct that contravenes section 46(1) of the Trade Practices Act 1974, particularly in relation to pricing practices that could be considered predatory. Corporations and persons must be aware of the costs associated with supplying goods or services and avoid pricing them below cost if such actions are intended to harm competition. Additionally, the Minister is required to be satisfied that there will be at least one Deputy Chairperson of the Australian Competition and Consumer Commission with knowledge of or experience in small business matters before appointing a new Deputy Chairperson, as stipulated in subsection 10(1B) of the Trade Practices Act 1974. This ensures that the Commission has the necessary expertise to address issues pertinent to small businesses.
- Breaching the provisions of the Trade Practices Act 1974 can lead to civil or criminal penalties. While the specific penalties are not detailed in the Act itself, under the Trade Practices Act 1974, corporations found guilty of engaging in conduct that contravenes section 46(1) can face substantial penalties, including fines of up to $1.1 million for corporations and up to $220,000 for individuals, depending on the nature and severity of the contravention. Additionally, the Australian Competition and Consumer Commission has the authority to seek injunctive relief and other remedies to address anti-competitive practices.
- Area of Law
- Commercial Law
- Competition Law
- Instrument
- Act
- Concepts
- Definitions & Interpretation
- Offence Provisions
- Enforcement Powers
- Regulatory Standards