Section 45 of the Competition and Consumer Act 2010 (Cth) (CCA) prohibits a corporation from making and giving effect to contracts, arrangements or understandings with competitors which contain an exclusionary provision.

Section 4D of the CCA defines an exclusionary provision as one which:

• is made between parties any two or more of which are competitive with each other; and

• has the purpose or preventing, restricting or limiting:

by any or all of the parties to the contract, arrangement or understanding or their related bodies corporate.

Such conduct is also referred to as a primary boycott and is absolutely prohibited.

It is unlawful, therefore, for competitors to enter into or give effect to a contract, arrangement or understanding which contains a provision allowing one or all of the competitors to blacklist a particular person or class of persons. The person need not be identified by name. It is enough if the class of persons can be identified, eg suppliers of extension ladders.

A primary boycott would exist where, for example, a corporation and one of its competitors agreed not to acquire certain ingredients from a particular supplier, or only to do so on certain terms and conditions.

The purpose of a primary boycott may be to share a market or to apply pressure to a customer or supplier. In the former case, the conduct would also breach the cartel conduct provisions. It is important to bear in mind that the primary boycott prohibition can be broader in its application than cartel conduct. See Cartel conduct.

In some circumstances conduct which amounts to a primary boycott may also breach the prohibition on exclusive dealing, which is not absolutely prohibited but is subject to a substantial lessening of competition test. In that case, an “anti-overlap” provision exists in s 45(6) of the CCA, so that the conduct is assessed under the exclusive dealing provisions.

See Primary boycotts.

The CCA also prohibits the following other forms of boycotts:

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

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

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

A secondary boycott is one where a person acts in concert with a second person so as to prevent a third person from supplying goods or services to, or acquiring goods or services from, a fourth person.

As a result of the operation of s 45DC of the CCA, trade unions and employee organisations can be found to have acted in concert with other persons, for the purposes of ss 45D , 45DA and 45DB . Specific exemption exists in s 45DD where the dominant purpose of the conduct is related to conditions of employments (including remuneration) or environmental or consumer protection which is not conduct in the form of industrial action.

See Other forms of boycotts.