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The Blacktown Amendment: Dealing effectively with geographic price discrimination

Frank Zumbo
(2011) 19 Australian Journal of Competition and Consumer Law 33

 

Abstract

"Price discrimination arises where different customers are charged a different price for the same product or service. Anti-competitive price discrimination arises where the differences in prices cannot be explained by reference to differences in the reasonable cost of supplying the two customers. The inability of the two customers in these circumstances to obtain the same price means that there is a distortion in the market such that one customer is materially disadvantaged by paying a higher price than the other customer. At the retail level such price discrimination becomes what is called “geographic price discrimination”, where a consumer in one location is paying a higher price than a consumer at another location in the same geographic area. This price gouging can, however, be effectively dealt with in a targeted and balanced manner with sufficient safeguards for competition and consumers.

Comments

On the article

This is either ar short article or lengthy opinion piece - it reads more like the latter, given the conversational tone and the fact that none of the claims, justifications or criticisms are referenced in any way.

 

Background

The article relates to the 'Blacktown Amendment', which was drafted by the author. Trade Practices Amendment (Guaranteed Lowest Prices - Blacktown Amendment) Bill 2009 was a private member's bill (introduced by Senators Nick Xenophon and Barnaby Joyce) in June 2009. It was subjected to a Senate Inquiry, which recommended against the passage of the bill. The bill lapsed on 28 September 2010 and is not proceeding.

When the Trade Practices Act (now Competition and Consumer Act) was originally introduced in 1974 it contained a prohibition on price discrimination in s 49. This was subject to a competition test and was primarily concerned with price discrimination as between suppliers and retailers. After numerous recommendations for repeal, it was eventually repealed by the Competition Policy Reform Act 1995, s 14.

There have been several major reviews into competition policy which have either recommended the repeal of price discrimination laws or recommended against their re-introduction. For a discussion of the history of price discrimination laws in Australia, including the relevant inquiries and reports, visit the price discrimination page.

 

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