The Competition and Consumer Act 2010 (Cth) (CCA) regulates competition and fair trading. It has widespread application to all types of businesses including companies, partnerships, unincorporated associations, government bodies, sole traders, as well as individuals. Foreign companies doing business in Australia are also subject to its application. Anyone engaged in any form of business activity in Australia needs to be aware of, and comply with, the CCA, so it is important that in-house counsel keeps the provisions of the CCA in mind when advising the business.

This topic discusses the principal anti-competitive conduct provisions of the CCA which are found in Pt IV , entitled “Restrictive Trade Practices” and includes prohibitions on:

• cartel conduct (ss 45AA to 45AU , CCA);

• contracts, arrangements or understandings which substantially lessen competition (s 45 , CCA);

• covenants in real estate transactions which substantially lessen competition (s 45B , CCA) or involve price fixing (s 45C , CCA);

• secondary boycotts which have the purpose of causing substantial loss or damage (s 45D , CCA) or have the purpose of causing substantial lessening of competition (s 45DA , CCA);

• boycotts affecting trade or commerce involving the movement of goods to and from Australia (s 45DB , CCA);

• misuse of market power, including predatory pricing (s 46 , CCA);

• misuse of market power in Trans Tasman markets (s 46A , CCA);

• exclusive dealing, including third line forcing (s 47 , CCA);

• resale price maintenance (s 48 , CCA);

• dual listed company arrangements that substantially lessen competition (s 49 , CCA); and

• acquisitions of shares and assets which substantially lessen competition: s 50 , CCA.

Remedies and enforcement provisions for breach of these prohibitions are found in Pt VI . Provisions dealing with authorisation and notification of otherwise prohibited conduct are contained in Pt VII .

Industry specific regulation is found in Pts IVB (which deals with mandatory industry codes, including the Franchising Code of Conduct and the Horticulture Code), XIB and XIC (telecommunications) and X (international cargo shipping).

The anti-competitive conduct provisions of the CCA apply to conduct in Australia by:

• companies incorporated in Australia;

• foreign corporations doing business in Australia; and

• federal, state and territory government authorities and bodies to the extent only that they carry on a business.

By reason of the adoption of the anti-competitive conduct provisions of the CCA by state and territory government those provisions also apply to:

• partnerships;

• unincorporated associations;

• unincorporated joint ventures; and

• sole traders.

A note of caution — the prohibitions in Pt IV also extend to conduct outside Australia where that conduct is carried on by an Australian citizen or resident or a company incorporated in Australia or carrying on business in Australia.

See Application of the CCA to business.

Individuals who:

• aid, abet, counsel or procure a breach;

• induce, whether by threats or promises, a breach;

• have in any way been knowingly concerned in, or a party to a breach; or

• have conspired with others to effect a breach,

of Pt IV or IVB of the CCA can be found liable for the breach.

See Application of the CCA to individuals.

The anti-competitive conduct provisions in the CCA fall broadly into one of two types:

• conduct which is absolutely prohibited irrespective of its effect on competition — commonly referred to as “per se” offences; and

• conduct which is only prohibited if it has either the purpose, effect or likely effect of substantially lessening competition in a market.

It is critical, therefore to have an understanding of the concept of market as it applies in the CCA, in order to assess whether conduct breaches the Act. Although defined in s 4E of the CCA to refer to a market in Australia by reference to the goods or services which are substitutable for one another, the concept is a hybrid legal-economic concept, the definition of which does not necessarily accord with the concept of market as it may be understood by those in a particular industry.

In-house counsel should be wary of confusing the industry/business view of what is the market with the legal-economic view. The latter can often be more narrow in terms of what is considered to be a substitute and, therefore, who is a competitor.

See The concept of market.

A number of the provisions of the CCA prohibit the making and implementation (giving effect to) of certain anti-competitive conduct by means of contracts, arrangements or understandings. For the purposes of the CCA, contracts, arrangements or understandings can be:

• written or unwritten;

• formal or informal; or

• legally binding and enforceable or not legally binding or enforceable.

A nod and a wink can be enough. All that is required is that there be a meeting of the minds and a consensus as to what is to be done, rather than a mere hope or expectation.

Based on recommendations in the Harper Review, a new concerted practices prohibition was introduced into the CCA on November 2017. Section 45(1)(c) now provides that a person must not “engage with one or more other persons in a concerted practice that has the purpose, or has or is likely to have the effect, of substantially lessening competition.

See Contracts, arrangements, understandings and “concerted practices”.