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Price signalling

Please see new price signalling page

 

About price signalling

Price signal imageSpecific price signalling laws were introduced by the controversial Competition and Consumer Amendment Act (No 1) 2011 which passed through both Houses of Parliament on 24 November 2011. It received Royal Assent on 6 December 2011 and came into operation 6 months later on 6 June 2012.

The legislation includes both 'per se' and competition-test prohibitions, the former predominantly for 'private' communications and the latter for public communications.

The ACCC has released two publications on the new price signalling laws:

The ACCC also has a page on its website which provides an overview of the price signalling laws.

Note: The Harper Panel's Draft Report recommends the repeal of these price signalling laws. See my summary of proposed price signalling law changes.

Industry application

The relevant provisions are contained in Division 1A of Part IV of the Act legislation. Pursuant to s 44ZZT, the Division ' applies to goods and services of the classes (however described) that are prescribed by the regulations'. The first regulation dealing with price signalling, the Competition and Consumer Amendment Regulation 2012 (No 1) (SLI No 90 of 2012), came into operation on 6 June and applies the Division to banking services. This industry restriction has been controversial and applied to banking notwithstanding the general view that it was prompted by activity in the petrol industry.

See, for example, Rod Sims, 'ACCC Priorities in Enforcing Competition Law' (speech delivered at Competition Law Conference, 5 May 2012, in which the ACCC Chairman noted that the 'genesis of [the price signalling] changes date back to a case involving allegations of price-fixing in the Geelong petrol market in the late 1990s'. The case was ACCC v Leahy Petroleum Pty Ltd [2007] FCA 794 and followed an earlier Full Court decision in Apco Service Stations Pty Ltd v ACCC [2005] FCAFC 161.

 

Summary: Price signalling conduct

There are two key prohibitions relating to price signalling (in addition to the general anti-competitive conduct and cartel provisions).

Private disclosures: per se price signalling conduct

Section 44ZZW prohibits the making of private pricing disclosures to competitors It provides:

A corporation must not make a disclosure of information if:

(a) the information relates to a price for, or a discount, allowance, rebate or credit in relation to, Division 1A goods or services supplied or likely to be supplied, or acquired or likely to be acquired, by the corporation in a market (whether or not the information also relates to other matters); and

(b) the disclosure is a private disclosure to competitors in relation to that market; and

(c) the disclosure is not in the ordinary course of business.

Price signalling for purpose of substantially lessening competition

Section 44ZZX prohibits corporations making pricing disclosures for the purpose of substantially lessening competition.

The prohibition

(1) A corporation must not make a disclosure of information if:

(a) the information relates to one or more of the following (whether or not it also relates to other matters):

(i) a price for, or a discount, allowance, rebate or credit in relation to, Division 1A goods or services supplied or likely to be supplied, or acquired or likely to be acquired, by the corporation;

(ii) the capacity, or likely capacity, of the corporation to supply or acquire Division 1A goods or services;

(iii) any aspect of the commercial strategy of the corporation that relates to Division 1A goods or services; and

(b) the corporation makes the disclosure for the purpose of substantially lessening competition in a market.

...

Determining whether disclosure made for purpose of substantially lessening competition

(2) In determining, for the purpose of this section, if a corporation has made a disclosure for the purpose of substantially lessening competition in a market, the matters to which the court may have regard include (but are not limited to):

(a) whether the disclosure was a private disclosure to competitors in relation to that market; and

(b) the degree of specificity of the information; and

(c) whether the information relates to past, current or future activities; and

(d) how readily available the information is to the public; and

(e) whether the disclosure is part of a pattern of similar disclosures by the corporation.

(3) Without limiting the manner in which the purpose of a person may be established for the purposes of any other provision of this Act, a corporation may be taken to have made a disclosure of information for the purpose of substantially lessening competition in a market even though, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the corporation or of any other person or from other relevant circumstances.

Exceptions, authorisation and notification

There are a number of relevant exceptions, qualifications and definitions relating to Part IV, Division 1A (see full list of provisions below). Many are industry specific in nature. In addition, both authorisation (s 88(6A)) and notification is possible.


The Law

Competition and Consumer Act 2010 Part IV Restrictive Trade Practices

Division 1A (Anti-competitive disclosure of pricing and other information)

44ZZS Definitions

44ZZT Goods and services to which this Division applies

44ZZU Provisions affecting whether a corporation has disclosed information to a person

44ZZV Meaning of private disclosure to competitors

44ZZW Corporation must not make private disclosure of pricing information etc. to competitors

44ZZX Corporation must not make disclosure of pricing information etc. for purpose of substantially lessening competition

44ZZY Exceptions that apply to sections 44ZZW and 44ZZX

44ZZZ Additional exceptions that only apply to section 44ZZW

44ZZZA Burden of proof

44ZZZB Mere receipt of information does not constitute being knowingly involved in contravention

Competition and Consumer Regulations 2010 - Part 4

The Competition and Consumer Amendment Regulation 2012 (No 1) (SLI No 90 of 2012) addressed price signalling and came into operation on 6 June 2012. It included insertion a new Part 4 of the Competition and Consumer Regulations 2010, which provides:

Part 4 Anti-competitive disclosure of pricing and other information

48 Anti-competitive disclosure of pricing and other information - goods and services to which Division 1A of Part IV of the Act applies (goods and services)

For subsection 44ZZT (1) of the Act, the table sets out classes of goods or services to which Division 1A of Part IV of the Act applies.

Item Classes
1

A good or service:

(a) provided by an authorised deposit-taking institution within the meaning of the Banking Act 1959 ; and

(b) consisting, to any extent, of taking money on deposit (otherwise than as part-payment for identified goods or services)

2

A good or service:

(a) provided by an authorised deposit-taking institution within the meaning of the Banking Act 1959 ; and

(b) consisting, to any extent, of making advances of money

 

Cases relating to price signalling

CasesNone yet relating to this law. The cases generally accepted as prompting these new laws was:

 

Articles and books relating to price signalling

Australia

View Reading room: cartels

See, in particular

  • Nicholas Wendon, 'Division 1A of the Competition and Consumer Act 2010 (Cth): A critique' (2013) 21 AJCCL 181

 

Reports and inquiries relating to price signalling

 

Guidelines

None

 

Useful links