| Prohibited conduct (dual listed companies)
Prohibition of anti-competitive dual listed company arrangements
Until 2006 the conduct of dual listed companies was assessed under s 45. As a result of legislation introduced in 2006 dual listed companies are now assessed under s 49 which prohibits parties making (or giving effect to) a dual listed company arrangement if a provision of the proposed arrangement would have the purpose, effect or likely effect of substantially lessening competition.
The key provision in relation to dual listed company arrangements (DLC) is section 49. It provides that a corporation must not make (or give effect to) a DLC arrangement if a provision of that arrangement has the purpose, effect or likely effect of substantially lessening competition. An exception is then provided by s 49(2) which states that the making (but not giving effect to) such a provision will not contravene s 49 if:
- The provision will not come into operation unless/until authorisation is granted; and
- Authorisation is sought within 14 days of the making of the provision.
Competition is defined for purposes of this section as competition in any market in which ‘a corporation that is a party to the arrangement or would be a party to the proposed arrangement’ or any related corporate body, ‘supplies or acquires, or is likely to supply or acquire, goods or services or would, apart from the provision, supply or acquire, or be likely to supply or acquire, goods or services.’
A provision will be taken to substantially lessen competition if it would have this effect when combined with other provisions of the arrangement or any other contract, arrangement or understanding (or proposed contract, arrangement or understanding) to which a party to the DLC (or related corporation) is or would be a party.