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Competition and Consumer Act 2010 (Cth)

Section 90
Determination of applications for authorisations

 

The provision

(1) The Commission shall, in respect of an application for an authorization:

(a) make a determination in writing granting such authorization as it considers appropriate; or

(b) make a determination in writing dismissing the application.

(2) The Commission shall take into account any submissions in relation to the application made to it by the applicant, by the Commonwealth, by a State or by any other person.

Note: Alternatively, the Commission may rely on consultations undertaken by the AEMC: see section 90B.

(4) The Commission shall state in writing its reasons for a determination made by it.

(5) Before making a determination in respect of an application for an authorization the Commission shall comply with the requirements of section 90A.

Note: Alternatively, the Commission may rely on consultations undertaken by the AEMC: see section 90B.

(5A) The Commission must not make a determination granting an authorisation under subsection 88(1A) in respect of a provision of a proposed contract, arrangement or understanding that would be, or might be, a cartel provision, unless the Commission is satisfied in all the circumstances:

(a) that the provision would result, or be likely to result, in a benefit to the public; and

(b) that the benefit would outweigh the detriment to the public constituted by any lessening of competition that would result, or be likely to result, if:

(i) the proposed contract or arrangement were made, or the proposed understanding were arrived at; and

(ii) the provision were given effect to.

(5B) The Commission must not make a determination granting an authorisation under subsection 88(1A) in respect of a provision of a contract, arrangement or understanding that is or may be a cartel provision, unless the Commission is satisfied in all the circumstances:

(a) that the provision has resulted, or is likely to result, in a benefit to the public; and

(b) that the benefit outweighs or would outweigh the detriment to the public constituted by any lessening of competition that has resulted, or is likely to result, from giving effect to the provision.

(5C) The Commission must not make a determination granting an authorisation under subsection 88(6A) in respect of a proposed disclosure of information to which section 44ZZWwould or might apply, unless the Commission is satisfied in all the circumstances that the proposed disclosure would result, or be likely to result, in such a benefit to the public that the proposed disclosure should be allowed to be made.

(5D) The Commission must not make a determination granting an authorisation under subsection 88(6A) in respect of a proposed disclosure of information to which section 44ZZXwould or might apply, unless the Commission is satisfied in all the circumstances:

(a) that the proposed disclosure would result, or be likely to result, in a benefit to the public; and

(b) that the benefit would outweigh the detriment to the public constituted by any lessening of competition that would result, or be likely to result, if the corporation so disclosed the information.

(6) The Commission shall not make a determination granting an authorization under subsection 88(1), (5) or (8) in respect of a provision (not being a provision that is or may be an exclusionary provision) of a proposed contract, arrangement or understanding, in respect of a proposed covenant, or in respect of proposed conduct (other than conduct to which subsection 47(6) or (7) applies), unless it is satisfied in all the circumstances that the provision of the proposed contract, arrangement or understanding, the proposed covenant, or the proposed conduct, as the case may be, would result, or be likely to result, in a benefit to the public and that that benefit would outweigh the detriment to the public constituted by any lessening of competition that would result, or be likely to result, if:

(a) the proposed contract or arrangement were made, or the proposed understanding were arrived at, and the provision concerned were given effect to;

(b) the proposed covenant were given, and were complied with; or

(c) the proposed conduct were engaged in;

as the case may be.

(7) The Commission shall not make a determination granting an authorization under subsection 88(1) or (5) in respect of a provision (not being a provision that is or may be an exclusionary provision) of a contract, arrangement or understanding or, in respect of a covenant, unless it is satisfied in all the circumstances that the provision of the contract, arrangement or understanding, or the covenant, as the case may be, has resulted, or is likely to result, in a benefit to the public and that that benefit outweighs or would outweigh the detriment to the public constituted by any lessening of competition that has resulted, or is likely to result, from giving effect to the provision or complying with the covenant.

(8) The Commission shall not:

(a) make a determination granting:

(i) an authorization under subsection 88(1) in respect of a provision of a proposed contract, arrangement or understanding that is or may be an exclusionary provision; or

(ii) an authorization under subsection 88(7) or (7A) in respect of proposed conduct; or

(iii) an authorization under subsection 88(8) in respect of proposed conduct to which subsection 47(6) or (7) applies; or

(iv) an authorisation under subsection 88(8A) for proposed conduct to which section 48 applies;

unless it is satisfied in all the circumstances that the proposed provision or the proposed conduct would result, or be likely to result, in such a benefit to the public that the proposed contract or arrangement should be allowed to be made, the proposed understanding should be allowed to be arrived at, or the proposed conduct should be allowed to take place, as the case may be; or

(b) make a determination granting an authorization under subsection 88(1) in respect of a provision of a contract, arrangement or understanding that is or may be an exclusionary provision unless it is satisfied in all the circumstances that the provision has resulted, or is likely to result, in such a benefit to the public that the contract, arrangement or understanding should be allowed to be given effect to.

(8A) The Commission must not make a determination granting an authorisation under subsection 88(8B) to make a dual listed company arrangement unless it is satisfied in all the circumstances that the making of the arrangement would result, or be likely to result, in such a benefit to the public (see subsection (9A)) that the arrangement should be allowed to be made.

(8B) The Commission must not make a determination granting an authorisation under subsection 88(8B) to give effect to a provision of a dual listed company arrangement unless it is satisfied in all the circumstances that the giving effect to the provision would result, or be likely to result, in such a benefit to the public (see subsection (9A)) that the provision should be allowed to be given effect to.

(9) The Commission shall not make a determination granting an authorization under subsection 88(9) in respect of the acquisition of a controlling interest in a body corporate within the meaning of section 50A unless it is satisfied in all the circumstances that the proposed acquisition would result, or be likely to result, in such a benefit to the public (see subsection (9A)) that the acquisition should be allowed to take place.

(9A) In determining what amounts to a benefit to the public for the purposes of subsections (8A), (8B) and (9):

(a) the Commission must regard the following as benefits to the public (in addition to any other benefits to the public that may exist apart from this paragraph):

(i) a significant increase in the real value of exports;

(ii) a significant substitution of domestic products for imported goods; and

(b) without limiting the matters that may be taken into account, the Commission must take into account all other relevant matters that relate to the international competitiveness of any Australian industry.

(10) If the Commission does not determine an application for an authorisation (other than an application for an authorisation under subsection 88(9)) within the relevant period, then it is taken to have granted the application at the end of that period.

(10A) For the purposes of subsection (10), the relevant period is the period of 6 months beginning on the day the Commission received the application. However, if, before the end of that 6 month period:

(a) the Commission has prepared a draft determination under subsection 90A(1) in relation to the application; and

(b) the Commission determines in writing that that period is extended by a specified period of not more than 6 months; and

(c) the applicant agrees to that period being so extended;

the relevant period is that period as so extended.

(11) Subject to subsections (12) and (13), if the Commission does not determine an application for an authorisation under subsection 88(9) within:

(a) 30 days from the day on which the application is received by the Commission; or

(b) if the Commission, before the end of that period of 30 days, gives to the applicant a notice in writing requesting the applicant to give to the Commission additional information relevant to the determination of the application—the period consisting of 30 days from the day on which the application is received by the Commission increased by the number of days in the period commencing on the day on which the notice is given to the applicant and ending on the day on which the applicant gives to the Commission such of the additional information as the applicant is able to provide;

the Commission shall be deemed to have granted, at the end of that period, the authorisation applied for.

(11A) The Commission may, within the 30 day period mentioned in subsection (11), notify the applicant in writing that the Commission considers that the period should be extended to 45 days due to the complexity of the issues involved. If the Commission so notifies the applicant, the references in subsection (11) to 30 days are to be treated as references to 45 days.

(12) If the applicant for an authorization informs the Commission in writing before the expiration of the period referred to in subsection (11) (in this subsection and in subsection (13) referred to as the base period) that the applicant agrees to the Commission taking a specified longer period for the determination of the application, a reference to that longer period shall be deemed for the purposes of that application to be substituted in subsection (11) for the reference in that subsection to the base period.

(13) For the purposes of any application of subsection (12), a reference in that subsection to the base period shall, if a reference to another period is deemed by any other application or applications of that subsection to have been substituted in subsection (11) for the reference in subsection (11) to the base period, be construed as a reference to that other period.

(14) If a person to whom a notice has been sent under subsection 90A(2) in relation to a draft determination in respect of an application for an authorization notifies the Commission in accordance with subsection 90A(6) that he or she wishes the Commission to hold a conference in relation to the draft determination, the relevant period (worked out under subsection (10A) of this section) shall be deemed to be increased by a period equal to the period commencing on the day on which the first notification in relation to the draft determination was received by the Commission and ending on the seventh day after the day specified in the certificate given by a member of the Commission in pursuance of subsection 90A(9) as the day on which the conference terminated.

(15) Where a party to a joint venture makes at the one time two or more applications for authorizations (other than an application for an authorisation under subsection 88(9)), being applications each of which deals with a matter relating to the joint venture:

(a) the Commission shall not make a determination in respect of any one of those applications unless it also makes a determination or determinations at the same time in respect of the other application or other applications; and

(b) if the Commission does not make a determination in respect of any one of the applications within the relevant period (worked out under subsection (10A)) in relation to that application, the Commission shall be deemed to have granted, at the expiration of that period, all the authorizations applied for.

 

Legislative history

Amended by Competition and Consumer Amendment Act (No 1) 2011 (Act 185 of 2011)

  • Amendments containing reference to Division 1A of Part IV (price signalling) inserted - to come into operation on 6 June 2012.

    Schedule 1, Section 6: After subsection 90(5B) Insert:

    (5C) The Commission must not make a determination granting an authorisation under subsection 88(6A) in respect of a proposed disclosure of information to which section 44ZZWwould or might apply, unless the Commission is satisfied in all the circumstances that the proposed disclosure would result, or be likely to result, in such a benefit to the public that the proposed disclosure should be allowed to be made.

    (5D) The Commission must not make a determination granting an authorisation under subsection 88(6A) in respect of a proposed disclosure of information to which section 44ZZXwould or might apply, unless the Commission is satisfied in all the circumstances:

    (a) that the proposed disclosure would result, or be likely to result, in a benefit to the public; and

    (b) that the benefit would outweigh the detriment to the public constituted by any lessening of competition that would result, or be likely to result, if the corporation so disclosed the information.

More history forthcoming

 

Commentary

Different tests

The different 'public benefit' tests contained in s 90 were considered in Re Media Council of Australia (No 2) (1987) ATPR 40-774 to be essentially the same. However, the Tribunal in Re Australian Association of Pathology Practices Inc (2004) 206 ALR 71 the Tribunal noted that simply because both tests involved weighing of benefit against detriment, it did not necessarily follow that the tests were always the same (see French 2006). Justice French has also observed that as 'a matter of statutory construction ... there does seem to be implicit a distinction reflecting the policies underpinning the different authorisaiton tests' (French 2006)

Public benefit

The Trade Practices Tribunal in QCMA (Re Queensland Co-operative Milling Association Ltd Re Defiance Holdings Ltd (1976) 25 FLR 169 at 182-183) stated:

‘… we would not wish to rule out of consideration any argument coming within the widest possible conception of public benefit. This we see as anything of value to the community generally, any contribution to the aims pursued by the society including as one of its principal elements (in the context of trade practices legislation) the achievement of the economic goals of efficiency and progress.’

InQantas Airways Ltd [2004] A Comp T 9 [at 180] the Tribunal reinforced the fact that public benefits were not limited to any particular type of publc benefit:

‘The authorisation provisions of the Act, unlike those of Pt IV, are not solely concerned with the promotion of competition or the achievement of a socially efficient allocation of resources. The test for authorisation does, after all, provide for a balancing of public benefit against anti-competitive detriment, which necessarily calls on us to consider policy imperatives and broader social values and balance those against competition concerns.’

Public has been construed as meaning the Australian public (Re Howard Smith Industries Pty Ltd (1977) 28 FLR 385; Re Rural Traders Co-operative (WA) Ltd (1979) 37 FLR 244 and Qantas Airways Ltd [2004] A Comp T 9 at [199] (see also French (2006)].

Justice French has observed:

[para 25] 'The ‘public benefit’ factor in s 90 is confined to by its application to the authorisation of limited classes of conduct and the requirement that it be causally related to the conduct authorised. But within those constraints the range of matters that may be brought into account under the rubric of public benefit is not in terms limited. Many, if not most cases will focus on questions of economic efficiency. But the scope and purposes of the Act and even its stated objects do not impose any well-defined constraint upon matters which may be considered as benefits.'

Public detriment

Justice French has observed:

[para 27] 'The other side of the public benefit coin is the risk of ‘detriment to the public’ under s 90(6) and 90(7). This covers ‘… any impairment to the community generally, any harm or damage to the aims pursued by the Society, including as one of its principal elements the achievement of the goal of economic efficiency …’. The concept of ‘detriment’ is ‘wider than the notion of anti-competitive effect’, although normally the most important detriments will have that character. The relevant detriment flows from the anti-competitive effect of the conduct for which authorisation is sought. Other detriments which may be intrinsic to and therefore detract from, the claimed public benefit may also be relevant in the weighing of that benefit.' [footnotes omitted]

ACCC discretion

Justice French has observed:

[para 43] '... The Commission appears to have a discretion to refuse authorisation even where the public benefit test has been satisfied. For the framing of the test in s 90 is prefaced by the words ‘The Commission shall not make a determination granting an authorisation … unless it is satisfied …’.

[para 44] '... A refusal to grant authorisation despite a positive public benefit assessment would necessarily have to identify factors extraneous to the public benefit test, which warranted refusal of authorisation. It is not easy to imagine what they would be.'

 

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