Competition and Consumer (Price Signalling) Amendment Bill 2010
Note, the House of Representatives Standing Committee on Economics conducted an inquiry into this bill which was later expanded to include an inquiry into the Government's price signalling bill. On 22 June 2011 it released its report recommending passage of the Government's bill and rejection of the opposition's bill.
The Competition and Consumer (Price Signalling) Amendment Bill 2010 is a private member's bill, introduced by shadow minister for competition, Mr Bruce Billson on 22 November 2010. It is considered largely a response to concerns about banking competition and is designed to prohibit anti-competitive price-signalling. The explanatory memorandum states:
This Coalition Private Member’s Bill seeks to establish a new head of power under which the Australian Competition and Consumer Commission (ACCC) would be able to investigate and seek penalties for ‘price signalling’ that produces anti-competitive effects in the Australian market, to the detriment of consumers.
Price signalling is a facilitating practice by which corporations inform their rivals about price actions and intentions, so as to eliminate uncertainty about the price of their goods or services, thus reducing the inherent risks of competition which would be a feature a workably competitive market.
The proposed bill defines price signalling as a communication of price-related information to a competitor for purpose of encouraging the competitor to vary supply or acquisition prices in circumstances where that communication has, or is likely to have, the effect of substantially lessening competition.
The new provision would be contained in Division 2 of Part IV of the TPA and would not be subject to the new criminal regime applicable to some forms of cartel conduct.
The Bill, if passed, would insert a new s 45A (which until last year housed the price fixing provision) which would provide:
Prohibition of price signalling
(1) A corporation must not engage in price signalling.
(2) For this section, a corporation engages in price signalling if:
(a) it communicates price-related information to a competitor; and
(b) it does so for the purpose of inducing or encouraging the competitor to vary the price at which it supplies or acquires, offers to supply or acquire, or proposes to supply or acquire, goods or services; and
(c) the communication of that information has, or is likely to have, the effect of substantially lessening competition in the market for those goods or services, or in another market.
Establishing the purpose of a communication
(3) Without in any way limiting the manner in which the purpose referred to in paragraph (2)(b) may be established, a corporation may be taken to have communicated price-related information to a competitor even if, after all of 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.
Several more sub-sections follow which define various terms. In particular, it captures public and private communications, including those made by way of public announcement. Importantly, however, transmissions or re-transmissions of price-related information that is already in the public domain is excluded, as are communications required by law.
View my blog piece for further discussion.
- Mallesons Stephen Jaques, 'Price signalling - two Bills compared, neither needed' (21 January 2011)
- Freehills, 'Opposition "price signalling" bill: a parliamentary ‘own goal’ in the making?' (30 November 2010)
- MinterEllison, 'Anti-competitive price signalling - implications beyond the banking sector' (15 December 2010)