Misuse of Market Power Overview
Prohibition of misuse of market power
Australia's competition laws currently prohibit firms with a substantial degree of market power from taking advantage of that market power for a prohibited purpose. The prohibited purposes include:
(a) Eliminating or substantially damaging a competitor … in that or any other market
(b) Preventing entry of a person into that or any other market
(c) Deterring or preventing a person from engaging in competitive conduct in that or any other market
The relevant legislation
Australia's competition laws are contained in the Competition and Consumer Act 2010 (Cth). The key provision in relation to misuse of market power is section 46. In addition, section 46A prohibits the misuse of market power by a corporation with a substantial degree of power in a trans-Tasman market. See MMP legislation page for further details.
The history of the provision
There have been several reviews into the operation of the misuse of market power provision. Details of the history of the provision and the various reviews which have considered its operation can be found on the MMP history page. See also the MMP reports page for details of reports and inquiries which have considered the provision.
The introduction of an 'effects' based test for misuse of market power
In 2014-2015 an independent review of Australia's competition law and policy - known as the Harper Review - recommended the introduction of an 'effects' test for misuse of market power. This was followed by a further inquiry about the misuse of market power provision conducted by the Treasury: 'Options to Strengthen the Misuse of Market Power Laws'.
On 16 March 2016 Prime Minister Turnbull announced that the Government would move to amend s.46 in line with the recommendations of the Harper review. On 5 September 2016 the Government released an Exposure Draft Bill incorporating this proposed change.
- Government media release (external link)
- Comparison of provision and proposed provision in Exposure Draft Bill (PDF)
- Comparison between current provision and Harper recommendation (PDF)
- Media and commentary on the Harper recommendations
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. On 16 February 2017 the Senate Economics Committee recommended passage of the bill subject to some modification.
More information about the Harper recommendations (including model provisions) and the Government response to them can be found on my Harper Review misuse of market power page.
Details about the key cases relating to misuse of market power in Australia can be found on my MMP cases page.
For research and commentary on misuse of market power see the MMP reading page.