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Review of sections 51(2) and 51(3) of the
Trade Practices Act 1974

Final Report

Length: 306 pages

About this Report

Review of exemption provisions of the TPA


Terms of Reference

The Terms of Reference were dated 5 June 1998

I, PETER COSTELLO, hereby in accordance with the Commonwealth Government's Legislation Review Schedule, refer to the National Competition Council subsections 51(2) and 51(3) (exemption provisions) of the Trade Practices Act 1974 (TPA) for inquiry and report within nine months of receipt of this reference.

2. To meet the requirements of the Competition Principles Agreement (CPA) legislation/regulation which restricts competition should only be retained if the benefits to the community as a whole outweigh the costs, and if the objectives of the legislation/regulation cannot be achieved more efficiently through other means, including nonlegislative approaches.

3. In undertaking this inquiry the Council should have regard to:

(a) relevant Federal and State industrial relations legislation and international agreements relating to labour that recognise collective bargaining;

(b) the common law doctrine of restraint in relation to restrictive covenants pertaining to employment, partnerships, and the protection of goodwill in the sale of a business;

(c) standards made by the Standards Association of Australia;

(d) the Government’s obligations under intellectual property treaties and conventions arising from Australia being a signatory to various International Intellectual Property Agreements and Conventions, including the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights;

(e) Australian intellectual property legislation including the Copyright Act 1968, the Designs Act 1906, the Patents Act 1990, the Trade Marks Act 1995, the Circuit Layouts Act 1989 and the Plant Breeder’s Rights Act 1994;

(f) other nations’ experience with provisions similar to s51(2) and s51(3) of the TPA (ie provisions that provide/allow for specific exemptions from the application of general competition laws);

(g) consequential effects that the exemption provisions have through the Competition Code in each State and Territory; and

(h) any other matters the Council considers relevant to this inquiry.

4. The Council is to have regard to the analytical requirements for regulation assessment by all Australian governments set out in the CPA. Without limiting the scope of the reference, the final report from the Council should:

(a) identify the nature and, as far as reasonably practical, the magnitude of the social and economic problems that subsections 51(2) and 51(3) (exemption provisions) of the TPA seek to address;

(b) clarify the objectives of the exemption provisions and determine whether these objectives continue to be relevant;

(c) identify whether, and to what extent, the exemption provisions allow certain individuals/corporations to engage in specific anticompetitive conduct that may otherwise be prohibited by the general prohibitions in Part IV of the TPA;

(d) identify relevant alternatives to the exemption provisions, including non-legislative approaches;

(e) analyse, and, as far as reasonably practical, quantify the benefits, costs and overall effects of the exemption provisions and alternatives identified in (d) on the Australian economy;

(f) list the individuals and groups that provided written submissions and/or were consulted during the review and take into account their views;

(g) determine a preferred option for regulation - ie whether the exemption provisions should be abolished, modified or maintained; and

(h) advise on possible mechanisms for monitoring and reviewing any changes to the exemption provisions after the Government’s announced response.

5. In undertaking the review, the Council is to advertise nationally, take written submissions, consult with key interest groups and affected parties, and release a draft report or options paper for comment prior to a final report.

6. Upon receipt of the Council’s final report, the Government will consider the recommendations made and announce what action is to be taken as soon as possible.


Issues Paper

An issues paper was released on 15 June 1998



One hundred and ten submissions were received.