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On 1 December 2016 the Federal Government introduced the Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 (Misuse of Market Power Bill), which is the next step in the Government’s commitment to implement the ‘Harper’ Competition Policy Review’s misuse of market power reform recommendations.
For background please see our previous related articles:
The Misuse of Market Power Bill, if passed, will amend section 46 of the Competition and Consumer Act 2010 (Cth). Section 46 presently prohibits a corporation which has a substantial degree of power in a market from taking advantage of that power for three proscribed anti-competitive purposes:
The Misuse of Market Power Bill amendment is intended to strengthen the prohibition on the misuse of market power by corporations, preventing unilateral anti-competitive conduct. While the present prohibition is restricted in its focus to the harm cause to competitors by anti-competitive conduct, the amended provision focuses not on the impact on competitors, but upon the competitive process. See the below Table for an overview. To achieve this goal, the amended misuse of market power provision:
The Misuse of Market Power Bill was introduced to Parliament on 1 December 2016. Upon its introduction and reading the Bill was referred to the Senate Economics Legislation Committee. The Committee completed its inquiry and tabled its report to Parliament on 16 February 2016. Supporting the Misuse of Market Power Bill the Committee determined:
The Misuse of Market Power Bill will return to Parliament for ‘resumption of the debate’ where, as recommended by the Senate Economics Legislation Committee, the Bill is expected to be amended to remove the mandatory factors for consideration when determining whether conduct has the purpose of substantially lessening competition. With the Labor Party opposed to the amendment the Government will need to rely on crossbench support in the upper house for the Bill – whether theMisuse of Market PowerBill will pass remains to be seen.
The following helpful table, sourced from the Explanatory Memorandum, compares the Competition and Consumer Act and Misuse of Market Power Bill misuse of market power provisions.
Section 46 only applies to corporations with substantial market power
The conduct must have the purpose, effect or likely effect of substantially lessening competition.
The conduct must have one of three specific purposes, related to damaging an actual or potential competitor.
The conduct does not need to ‘take advantage’ of substantial market power.
The conduct must ‘take advantage’ of substantial market power.
To view the update of the Misuse of Market Power Bill click here.
1The Senate Economics Legislation Committee, discussed below, has recommended the removal of the mandatory factors for consideration by the Courts when determining whether alleged conduct substantially lessens competition.
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