Senate passes amendments to Trade Practices Legislation Amendment Bill (No. 1) 2007

The Trade Practices Legislation Amendment Bill (No. 1) 2007 was passed in the Senate on 18 September 2007, with amendments.

The original Bill amended the Trade Practices Act 1974 to provide greater protection for small businesses against misuse of market power and unconscionable conduct by large corporations.

The amendment Bill has further amended the misuse of market power provisions in section 46 of the Act to:

• address concerns about establishing when a corporation has a substantial degree of power in a market, which is the threshold requirement for section 46 to apply;
• specifically prohibit a corporation from leveraging market power from one market to another; and
• refer to sustained below‑cost pricing conduct as a factor the Court may consider in deciding whether a corporation has misused its market power.

The Government’s new amendment is based on an amendment by Senator Joyce and includes a specific prohibition against a corporation with a substantial share of a market from engaging in sustained below-cost pricing conduct for the purpose of eliminating or substantially damaging a competitor, preventing the entry of a person into a market, or deterring or preventing a person from engaging in competitive conduct in a market.

The Bill also makes amendments to the unconscionable conduct provisions in section 51AC of the Act to:

• include unilateral variation contract terms as a factor the Court may consider in deciding whether a corporation has engaged in unconscionable conduct; and
• raise the transaction limit for section 51AC from $3 million to $10 million to extend the its application to a wider range of transactions.

Finally, the Bill creates a second Deputy Chairperson position at the ACCC. The Government has announced that the second Deputy Chairperson appointment will be filled by a person who is experienced in small business matters.

The Bill will now be returned to the House of Representatives for final consideration.

UPDATE: Trade Practices Legislation Amendment Act (No. 1) 2007 as passed