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Developments in Australian Competition Law

Developments in Australian Competition Law. ABA International Asia/Pacific Antitrust Round-Up Fiona Crosbie, Partner Allens Arthu r Robinson. Issues. Cartel News Record penalty imposed on Visy in cardboard box cartel The likely criminalisation of cartels Misuse of Market Power

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Developments in Australian Competition Law

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  1. Developments in Australian Competition Law ABA International Asia/Pacific Antitrust Round-Up Fiona Crosbie, Partner Allens Arthur Robinson

  2. Issues • Cartel News • Record penalty imposed on Visy in cardboard box cartel • The likely criminalisation of cartels Misuse of Market Power • Amendments to misuse of market power prohibition • Predatory pricing amendments • Unconscionable conduct amendments

  3. Cartels: Record penalty ordered against Visy • Visy and Amcor have a combined market share of 90% in the corrugated fibre packaging market. • Visy and Amcor entered into understandings including: • maintaining market share and customers; • annual price increases; and • compensation understandings (for loss of customers). • Amcor granted immunity. • Visy fined $36 million – agreed penalty with regulator.

  4. Cartels: the likely criminalisation of cartels • The current position • Pecuniary penalties • Amendments in 2006: • increased maximum penalty to $10 million; • ‘three times the gain’ or 10% of annual turnover of corporate group; and • rule against indemnification of offending directors.

  5. Cartels: the likely criminalisation of cartels • The push for criminalisation • This week our PM revisited the introduction of jail terms • Suggestions by others include: • apply to ‘serious’ conduct with ‘dishonest’ intention • dual system (punishment and recovery) • possible exception for small business, primary industry and trade unions

  6. Misuse of market power: developments Three developments: • 1. (a) misuse of market power can occur in a different market (b) clarification of ‘substantial degree of market power’ • 2. predatory pricing amendments • 3. unconscionable conduct amendments

  7. Misuse of market power: predatory pricing A Corporation with a substantial market share • must not sell or offer to sell goods or services • at a price below what it costs the corporation • for a sustained period • with a purpose of either • eliminating or substantially damaging a competitor; • preventing entry of a person into that market; or • deterring or preventing a person from engaging in competitive conduct.

  8. Misuse of market power: unconscionable conduct • Specifically aimed to protect small business • transaction limit of $10 million • company supplied must not be a listed company • Non-exhaustive list of factors • strengths and bargaining power of supplier and small business • whether small business was able to understand documents relating to supply of goods or services; • extent of consistency of supplier dealings with other like small businesses. • Unilateral variation clauses

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