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Misuse of market power

Shopping cartAlways a controversial provision (section 46), the Harper review and subsequent consultation produced a plethora of submissions and some heated commentary on the appropriate test to be applied in abuse of power cases.

This led to a significant change to the test for misuse of market power in November 2018, replacing a test focusing on taking advantage of substantial market power for a specified purpose to a test focussing on conduct by a corporation with substantial market power that has the purpose or effect of substantially lessening competition.

View MMP Act page for details.

See Misuse of Market Power information page for further details about the current prohibition.

Main Harper Bill passes

The main Harper Bill passed in October and received Royal Assent on 27 October 2017. The Act came into operation on 6 November 2017.

Senate passes amendmed bill

On 15 August 2017 the House agreed to the Senate amendment and the bill was read for a third time. See Treasurer: Strengthened competition law to benefit Aussie small businesses and consumers (15 August 2017). It will not come into operation unless and until the main Harper bill is passed.

Senate passes amendmed bill

In August 2017 the Senate pased the bill with amendment

House passes amendmed bill

The Treasurer introduced an amendment to give effect to the Senate Committee recommendations; the bill as amended passed the House on 28 March 2017 and is currently before the Senate.

Senate Economics Committee recommends passage of bill

On 16 February 2017 the Senate Economics Committee recommended passage of the bill (but with removal of mandatory factors contained in the proposed s 46(2))

Government introduces Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 incorporating effects test

On 1 December 2016 (last sitting day of the year) the Government introdcued the Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 into the House of Representatives. It will not be debated until 2017.

Government releases Exposure Draft Bill incorporating effects test

On 5 September 2016 the Government released an Exposure Draft Bill incorporating an 'effects test' into s 46 of the Act:

Government agrees to introduce effects test

On 16 March 2016 Prime Minister Malcolm Turnbull announced that the Government would adopt an effects test for section 46:

See my Harper Review Misuse of Market Power page for comparisons of the current and proposed law. For media and commentary following the Government's announcement, see my Harper Media Page.

Options to Strengthen the Misuse of Market Power Laws

The Harper Report (below) recommended fundamental changes to the misuse of market power laws; in particular, it recommended the introduction of an effects test to replace the current 'purpose' test in s 46. The Government responded by indicating it would engage in further consultation on this recommendation - see:

Options to Strengthen the Misuse of Market Power Laws
Treasury Discussion paper released: 11 December 2015
Submissions due: 12 February 2016

Competition Policy Review (Harper Review)

The Harper Review Final Report recommended an effects test for section 46. Details about the recommendation can be found in my misuse of market power overview.

On 1 September 2015 (then) Small Business Minister, Bruce Billson, took the proposed recommendation to cabinet: Bruce Billson, 'Harper review misuse of market power clause would energise enterprise' (AFR, 31 August 2015). The Government's response to the Harper Review indicated it would engage in further consultation on the proposed effects test.

Most of the media debate on the Harper Review surrounded the ACCC's proposal for a competition test for section 46.This as contained in the ACCC's original submission to the review and was defended in a subsequent submission to the Harper Review

Commentary opposing the test includes:

In support/defence of the proposed competition test:

See also

Other inquiries

On 6 March 2014 Senator Nick Xenophon introduced a private members' bill into Parliament - the Competition and Consumer Amendment (Misuse of Market Power) Bill 2014. If passed, the bill would provide the Court with the power to order a corporation to reduce its market share, where the corporation has been found to have contravened subsections 46(1) or 46(1AA) of the Act. The Bill was referred to the Senate Economics Legislation Committee which eventually reported on 26 February 2015 after a number of deadline extensions. The Committee (Senator Xenophon dissenting) recommended that the bill not be passed. See Inquiry page.

More information

For further information see the misuse of market power page


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