Trade Practices Legislation Amendment Act 2008
The original bill passed through the House but the federal Opposition, with the help of Senators Fielding and Xenophon, defeated the Bill in the Senate and made a number of amendments. It then returned to the House which accepted some amendments and rejected others. It returned again to the Senate on 16 September; the Senate did not insist on amendments not agreed to by the House - the bill received assent on 21 November 2008.
The original bill proposed to amend section 46 by modifying s 46(1AA) relating to predatory pricing (introduced by the Trade Practices Legislation Amendment Act 2007) (including inserting a 'taking advantage' element and replacing the market share test with a much more sensible market power test), clarifying the definition of taking advantage in s 46 and extending the ACCC's investigatory powers under s 155. The amended bill does not include the amendments to s 46(1AA) but retains the taking advantage definition and the s 155 amendments. The original bill also would have repealed s 46(4A) - but it has been amended to retain the superfluous provision.
This Act includes the following key amendments:
(1) making clear that recoupment is not required for a breach of s 46(1) based on below cost (predatory) pricing)
(2) Inserting a new s 46(6A) clarifying what constitutes 'taking advantage'
(3) Extends investigatory powers of the ACCC under s 155 until proceedings (other than injunctive proceedings) are commended) or the close of pleadings relating to application for a final injunction.
(4) Power is given to the Federal Magistrate's Court to hear matters arising under s 46.
Section 46(1AAA) (the recoupment issue)
A new s 46(1AAA) was inserted:
"If a corporation supplies goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying the goos or services, the corporation may contravene subsection (1) even if the corporation cannot, and might not ever be able to, recoup losses incurred by supplying the goods or services."
Section 46 (taking advantage)
Section 46 was amended to introduce s 46(6A) which set out a number of factors the court may have regard to in determining whether the 'taking advantage' element has been satisfied. These constitute an attempt to overcome the restrictive interpretation placed on this requirement in recent years and include:
(a) whether conduct was materially facilitated by the market power
(b) whether the corporation relied on the market power when engaging in the conduct
(c) whether it was likely the corporation would have engaged in the conduct if they did not have SMP [this appears a direct response to the 'could' test adopted in Melway]
(d) whether the conduct is otherwise related to the SMP
Section 155 (investigatory powers)
Section 155 was amended (by the addition of s 155(3A)(4) to ensure that the ACCC can continue to exercise a power conferred by s 155(1) until it commences proceedings – other than proceedings for an injunction – in relation to that matter, or until the close of pleadings in relation to an application for a final injunction.
Previously, once an application for injunction was made the ACCC effectively lost the right to use its powers under s 155(1). The ACCC was concerned that this hindered its powers of investigation and sometimes left it reluctant to pursue injunctions which might benefit the public for fear of losing these powers. This amendment enables the ACCC to continue to use these powers notwithstanding that interlocutory relief has been sought.
Section 46 (Federal Magistrate's Court )
The Act amended s 86(1A) to confer jurisdiction on the Federal Magistrate's Court in any matter arising under s 46 instituted by a person other than the Minister or ACCC. This is designed to provide a more accessible alternative to the Federal Court (although it's hard to imagine when it will be used in practice)
Section 10(1B) (small business expertise) - A new provision is inserted here to ensure that at least one Deputy Chairperson of the ACCC has knowledge of, or experience in, small business matters.
The Federal Magistrate's Court has been re-named the Federal Circuit Court.