Trade Practices Legislation Amendment Act 1992

Misuse of market power (and misuse of trans-tasman market power) amended to ensure references to individual competitors also included references to a class or classes of competitors.

Merger test changed from dominance to SLC test, s 50(3) added containing factors to consider in applying SLC test and definition of market (s 50(6)) added.

Maximum pecuniary penalty increased to $500,000 for individuals and $10m for corporations.

Section 87B added to provide for the Enforcement of Undertakings.

Section 90(9A) added to provide for matters that must be considered in determining merger authorisations and provision made for extending the time available for the Commission to determine authorisation applications and providing a time limit for the Tribunal hearing authorisation appeals.

[Select provisions only: see full Act for all amendments]

Section 4
Misuse of market power

Section 46 of the Principal Act is amended by inserting after subsection

(1) the following subsection:

"(1A) For the purposes of subsection (1):

(a) the reference in paragraph (1)(a) to a competitor includes a reference to competitors generally, or to a particular class or classes of competitors; and

(b) the reference in paragraphs (1)(b) and (c) to a person includes a reference to persons generally, or to a particular class or classes of persons.".

Section 5
Misuse of market power - corporation with substantial degree of power in trans-Tasman market

Section 46A of the Principal Act is amended by inserting after subsection (2) the following subsection:

"(2A) For the purposes of subsection (2):

(a) the reference in paragraph (2)(a) to a competitor includes a reference to competitors generally, or to a particular class or classes of competitors; and

(b) the reference in paragraphs (2)(b) and (c) to a person includes a reference to persons generally, or to a particular class or classes of persons.".

Section 6
Prohibition of acquisitions that would result in a substantial lessening of competition

Section 50 of the Principal Act is amended:

(a) by omitting subsections (1) to (3) (inclusive) and substituting the following subsections:

"(1) A corporation must not directly or indirectly:

(a) acquire shares in the capital of a body corporate; or

(b) acquire any assets of a person; if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market.

"(2) A person must not directly or indirectly:

(a) acquire shares in the capital of a corporation; or
(b) acquire any assets of a corporation;

if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market.

"(3) Without limiting the matters that may be taken into account for the purposes of subsections (1) and (2) in determining whether the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in a market, the following matters must be taken into account:

(a) the actual and potential level of import competition in the market;

(b) the height of barriers to entry to the market;

(c) the level of concentration in the market;

(d) the degree of countervailing power in the market;

(e) the likelihood that the acquisition would result in the acquirer being able to significantly and sustainably increase prices or profit margins;

(f) the extent to which substitutes are available in the market or are likely to be available in the market;

(g) the dynamic characteristics of the market, including growth, innovation and product differentiation;

(h) the likelihood that the acquisition would result in the removal from the market of a vigorous and effective competitor;

(i) the nature and extent of vertical integration in the market.";

(b) by omitting from paragraph (4)(a) "capital, or assets, of a body corporate" and substituting "capital of a body corporate or assets of a person";

(c) by adding at the end of the following subsection:

"(6) In this section:
'market' means a substantial market for goods or services in Australia, in a State or in a Territory.".

Section 7
Acquisitions that occur outside Australia

Section 50A of the Principal Act is amended: [see Full Act]

Section 10
Pecuniary penalties

(1) Section 76 of the Principal Act is amended:

(a) by omitting from subsection (1) "(not exceeding $50,000 in the case of a person not being a body corporate, or $250,000 in the case of a body corporate, in respect of each act or omission by the person to which this section applies)" and substituting ", in respect of each act or omission by the person to which this section applies,";

(b) by inserting after subsection (1) the following subsections:

"(1A) The pecuniary penalty payable under subsection (1) by a body corporate is not to exceed:

(a) for each act or omission to which this section applies that relates to section 45D or 45E - $250,000; and

(b) for each other act or omission to which this section applies - $10 million.

"(1B) The pecuniary penalty payable under subsection (1) by a person other than a body corporate is not to exceed $500,000 for each act or omission to which this section applies.".

(2) The amendments made by this section apply to acts or omissions that happen after the commencement of this Act.

Section 12
Divestiture

Section 81 of the Principal Act is amended:

(a) by omitting from paragraph (1A)(a) "capital, or any assets, of a body corporate" and substituting "capital of a body corporate or any assets of a person";

(b) by omitting from subsection (1B) "or (b)".

Section 13
Insertion of new section

After section 87A of the Principal Act the following section is inserted:

Enforcement of undertakings

"87B.(1) The Commission may accept a written undertaking given by a person for the purposes of this section in connection with a matter in relation to which the Commission has a power or function under this Act (other than Part X).

"(2) The person may withdraw or vary the undertaking at any time, but only with the consent of the Commission.

"(3) If the Commission considers that the person who gave the undertaking has breached any of its terms, the Commission may apply to the Court for an order under subsection (4).

"(4) If the Court is satisfied that the person has breached a term of the undertaking, the Court may make all or any of the following orders:

(a) an order directing the person to comply with that term of the undertaking;

(b) an order directing the person to pay to the Commonwealth an amount up to the amount of any financial benefit that the person has obtained directly or indirectly and that is reasonably attributable to the breach;

(c) any order that the Court considers appropriate directing the person to compensate any other person who has suffered loss or damage as a result of the breach;

(d) any other order that the Court considers appropriate.".

Section 14
Power of Commission to grant authorisations

Section 88 of the Principal Act is amended:

(a) by omitting from paragraph (9)(a) "capital, or to acquire assets, of a body corporate" and substituting "capital of a body corporate or to acquire assets of a person";

(b) by omitting from paragraph (9)(c) "in the capital, or from acquiring assets, of the body corporate" and substituting "or assets".

Section 15
Procedure for applications

Section 89 of the Principal Act is amended by omitting from subparagraph (5A)(a)(ii) "capital, or assets, of a body corporate" and substituting "capital of a body corporate or assets of a person".

Section 16
Determination of applications for authorisations

(1) Section 90 of the Principal Act is amended:

(a) by omitting from subsection (9) "capital, or of assets, of a body corporate" and substituting "capital of a body corporate or of assets of a person";

(b) by inserting after subsection (9) the following subsection:

"(9A) In determining what amounts to a benefit to the public for the purposes of subsection (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.";

(c) by omitting from paragraphs (11)(a) and (b) "45 days" (wherever occurring) and substituting "30 days";

(d) by inserting after subsection (11) the following subsection:

"(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.".

(2) The amendments made by this section apply only to applications made after the commencement of this Act.

Section 18
Functions and powers of Tribunal

(1) Section 102 of the Principal Act is amended by inserting after subsection (1) the following subsections:

"(1A) If a person applies to the Tribunal for review of a determination of the Commission relating to:

(a) the grant of an authorisation under subsection 88(9); or

(b) the revocation of an authorisation granted under that paragraph; the Tribunal must make its determination on the review within 60 days after receiving the application for review.

"(1B) The 60 day time limit in subsection (1A) does not apply if the Tribunal considers that the matter cannot be dealt with properly within that period of 60 days, either because of its complexity or because of other special circumstances.

"(1C) If subsection (1B) applies, the Tribunal must notify the applicant before the end of the 60 day period that the matter cannot be dealt with properly within that period.".

(2) The amendments made by this section apply only to applications for review that are made after the commencement of this Act.