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Sectors other than the banking sector if extended by
regulation
Key features of the bill
Two new prohibitions on price signalling, being:
a strict prohibition on private disclosures of pricing
information by companies to their competitors; and
a general prohibition on private or public disclosures of
pricing and other information which have the purpose of
substantially lessening competition.
On 24 March 2011, the Treasurer Wayne Swan introduced into
Parliament the Competition and Consumer Amendment Bill (No. 1)
2011. If enacted in its current form – which is very
uncertain given that the bill has only just been introduced
– the bill will amend the Competition and Consumer
Act 2010 ("Act") and could result
in sweeping restrictions on the disclosure of pricing information
in Australia.
The bill has been championed by the Treasurer as a means of
preventing the banks from giving each other a "nod and a
wink" that they will raise interest rates together, in the
face of purported "strong evidence of banks signalling their
pricing intentions to each other in a bid to undermine
competition".
New Prohibitions
There are two key prohibitions, being:
a "per se" (strict) prohibition on private disclosure
of pricing information by companies to their competitors; and
a broader prohibition on companies disclosing – in
private or in public – pricing information or other
information as to the capacity of the company to supply or acquire
goods and services, or aspects of the company's commercial
strategy where it has the purpose, or appears to a court to have
the purpose, of substantially lessening competition.
The penalties will be the same as the penalties for other
restrictive trade practices under Part IV of the Act, being civil
penalties of up to $10 million, 10 per cent of a business's
annual turnover or three times the benefit of the conduct,
whichever is the greater. The bill does not impose criminal
penalties.
Controversy
There are several controversial issues which have been raised
regarding the bill, including:
It overreaches the current prohibitions in the
Act – currently, the Act requires the existence
of a "contract, arrangement or understanding" for conduct
to be characterised as restrictive trade practices, which is the
same structure as in several other countries. This bill removes
this requirement and unilateral communications by a single company
can be caught.
The potential for it to apply to other industries
besides banking – while the reform has been
touted as affecting the banking sector only, the Federal Government
is able to extend the prohibitions to other industries by
regulation. None of those other industries have been identified at
this stage.
Exceptions
The bill sets out numerous specific exceptions to the
prohibitions (there are 10 exceptions in total), including where
the disclosure is related to a potential acquisition, accidental,
required by law or between related companies. The bill also allows
an exception where the conduct has been notified to or authorised
by the ACCC.
The Way Forward
As mentioned, the bill has only recently been introduced and it
will need to pass both houses of parliament. We will keep you
updated on the progress of the bill. If you have questions about
the likely impact of the passage of the bill on your business,
please contact:
Contacts
John Kell, Sydney (City)
+61 2 9391 3163
jkell@hunthunt.com.au
Catherine Logan, Sydney (City)
+61 2 9391 3267
clogan@hunthunt.com.au
Harold O'Brien, Sydney (North West)
+61 2 9804 5753
hobrien@hunthunt.com.au
Andrew Hudson, Melbourne
+61 3 8602 9231
ahudson@hunthunt.com.au
Ashley Pelman, Melbourne
+61 3 8602 9213
apelman@hunthunt.com.au
Robin Lonergan, Brisbane
+61 7 3292 9710
rlonergan@macrossans.com.au
Rick Harley, Adelaide
+61 8 8414 3373
rharley@hunthunt.com.au
Darren Miller, Perth
+61 8 9488 1300
darren.miller@marksandsands.com.au
Antony Logan, Hobart
+61 3 6210 6213
alogan@hunttas.com.au
Chris Osborne, Darwin
+61 8 8924 2600
cosborne@huntnt.com.au
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guide to the subject matter. Specialist advice should be sought
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