OECD kpcdb

1. Competition Law

 

The Australian Competition and Consumer Act 2010 (“CCA”) (previously, the Trade Practices Act 1974) governs competition policy in Australia. 

 

The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection. Australia uses a total welfare standard.

 

The CCA prohibits anti-competitive agreements, cartels, boycotts, exclusive dealing, resale price maintenance, misuse of market power and anti-competitive mergers and acquisitions. 

The CCA contains both competition law and consumer protection provisions.

 

Australia is a common law jurisdiction.

 

General exclusion: There are no sectors excluded from the application of the CCA.

Extra-territorial application: According to Section 5, the CCA applies to firms located outside Australia whose behaviour directly affects competition and/or consumers in domestic markets.

 

2. Australian Competition and Consumer Commission 

The Australian Competition and Consumer Commission (“ACCC”) is an independent statutory authority responsible for administering and taking enforcement action under the CCA and was established in 1995. 

 

The ACCC does not have the power to adopt decisions finding that there has been an infringement of the CCA. The ACCC investigates potential infringements of the CCA and, where it considers appropriate, brings them before the Federal Court of Australia for adjudication on whether an infringement occurred and what the appropriate penalty should be. The proceedings before the Federal Court follow an adversarial procedure.

 

The ACCC has the power to make administrative determinations on authorisations of restrictive trade practices and clearance decisions of mergers as well as accept formal written undertakings or use less formal administrative resolutions to address issues.

 

The Australian government may not give binding directions to the ACCC on whether to open or close an investigation an alleged antitrust infringement nor on whether or not to impose remedies, and may not overturn a decision regarding clearance or prohibition of a merger, as the ACCC acts independently of government. 

 

The ACCC is subject to external parliamentary scrutiny through the Senate Economics References Committee, which examines the operations and performance of all Treasury portfolio agencies as part of the Senate Estimates process that occurs up to three times each year. The ACCC’s annual report is tabled in Parliament every year.

 

The ACCC is issued with a statement of expectations from the Government. This sets out the Government’s expectations about the role and responsibilities of the ACCC, its relationship with the Government, issues of transparency and accountability and operational matters. The ACCC responds with a statement of intent.

 

In addition to the CCA (competition and consumer protection), the ACCC acts as sectoral regulator for national infrastructures for communication, bulk water, postal and transport industries.

 

Organisational structure of ACCC: The ACCC is headquartered in Canberra with offices nationwide in State and Territory capital cities (Brisbane, Sydney, Melbourne, Hobart, Adelaide, Perth, Darwin) and in Townsville city. The total number of staff is 763 as of 2017. The ACCC has an annual budget of AUD173.4 million for 2016/17. In the 2016 calendar year, approximately AUD67.6 million was spent on competition functions. 

 

Like most government departments and agencies, the ACCC’s budget is set by the Australian Government in its annual budget. The budget sets out the ACCC’s annual funding for the year ahead. While a small proportion of funding may be carried over to following years, each year is allocated separately. 

 

The vast majority of funding comes through the Australian Government’s budget, with external revenue in 2016/17 comprising only 2.5% of the ACCC’s overall funding, or in 2016/17, approximately AUD3.9 million.

 

The ACCC’s management has some autonomy in how it implements the ACCC’s annual budget. While the ACCC is, from time to time, given additional funding in relation to a specific purpose (for example, funding for an east coast gas enquiry), the ACCC can implement that funding how it chooses. If the ACCC is unable to fulfil its functions, then ultimately it is responsible to the Government and parliament. 

 

The ACCC is within the Treasury portfolio and reports to a responsible Minister on its operations. 

 

The ACCC is governed by a Chair and other members of the Commission appointed for terms of up to five years. The ACCC is composed of a Chair, two Deputy Chairs and four Commissioners as of January 2017. 

 

Commissioners are appointed by the Governor-General on recommendation of the Commonwealth Government as set out in section 7 of the CCA. An appointment is made after the majority of state and territory jurisdictions support the selection. The Commonwealth Treasurer may also appoint associate members of the Commission, with the support of a majority of state and territory jurisdictions. 

 

In practice, the Chair and Commissioners are appointed on a full-time basis. 

 

The Governor-General may dismiss a member of the Commission for any reason as set out under section 13 of the CCA. These include personal bankruptcy, misconduct, failure to disclose personal interests and/or absence from duty. 

 

Decisions are made by the Chair and Commissioners meeting together (or as a division of the ACCC), save where a power has been delegated to a Commission member. The Chair is also the Chief Executive Officer with public governance, performance and accountability responsibilities under the Public Governance, Performance and Accountability Act 2013.

 

Other regulators with competition powers: There are no other sector regulators that have competition powers.

 

Competition advocacy: Although the ACCC does not have a formal advocacy function, it advocates competition in the performance of its regulatory functions. 

 

The ACCC does not have any formal or legislated role in assessing competition issues in new or updated legislation, rules or regulations but can and does provide advice or information about the expected impact on competition where requested, or where it deems appropriate to comment. 

 

The ACCC has scope to conduct market studies, which may be made on its own initiative or under Ministerial direction according to Part VIIA, by direction of the relevant Minister. 

 

The ACCC has performed a number of market/sector studies in the last five years. If a market/sector study identifies an obstacle or a restriction to competition caused by an existing public policy, the study can include an opinion/recommendation to the government to remove or reduce such obstacle or restriction.

 

In 2016, the ACCC conducted or commenced four major market studies. After receiving additional funding from the government, the ACCC established an agricultural unit, to focus on competition and consumer issues in the agricultural industry. This unit led a market study into the beef and cattle markets. 

 

The ACCC also commenced a market study into the new car retailing industry, and the telecommunications industry. 

 

In November 2016, on direction from the government, the ACCC commenced a market study into the dairy industry. 

 

International co operation: Australia has concluded free trade agreements including chapters on competition law, for instance, with New Zealand and Singapore.

 

Australia has concluded bilateral treaties with the United States enabling the competition authorities of these two countries to exchange evidence and assist each other in enforcement of the competition law. Australia also concluded memorandums of understanding (MoUs) relating to international co operation on competition law and policy with Canada, China, Chinese Taipei, Fiji, India, Japan, Korea, New Zealand, Papua New Guinea, Philippines, United Kingdom, United States and the EU. 

 

3. Investigation

Initiation of investigation: Most of the cases that the ACCC investigates under the CCA are initiated by enquiries and complaints received from the public about traders. In some cases, the ACCC proactively initiates investigations if it identifies an issue of concern.

 

Powers of investigation: Under Section 155, the ACCC may issue a notice requiring a person to furnish information and appear before the ACCC to give any evidence, orally or in writing, or produce documents. 

 

According to Sections 154D and 154G, entry to premises may be made by an inspector with or without consent of the investigated party; in the latter case a search warrant is necessary. Search warrants are issued by a magistrate of the Federal Court of Australia, where the magistrate has reasonable grounds is suspecting there is, or will be in the next 72 hours, evidential material on the relevant premises. Powers available under a search warrant include the possibility to enter the premises, to search the premises and anything on the premises for the kind of evidential material specified in the warrant, and seize things of that kind found on the premises, to make copies of the kind of evidential material specified in the warrant found on the premises, to operate electronic equipment at the premises to see whether the kind of evidential material specified in the warrant is accessible by doing so, and to take equipment and material onto the premises, and use it, for any of the above purposes. 

 

The ACCC hast carried out unannounced inspections within the past 5 years. 

 

Failure to comply with investigation: If a person refuses or fails to comply with the ACCC’s notice under Section 155 or knowingly furnishes false or misleading information in response to a Section 155 notice, the person is guilty of an offence punishable upon conviction by a fine or imprisonment for up to 12 months. In the case of a body corporate, the maximum penalty is a fine not exceeding AUD18,000.

 

If a person obstructs, hinders, intimidates or resists a commonwealth official in the performance of their functions as an official, under section 149.1 of the Criminal Code Act 1995 (note: there are no parallel provisions in the CCA), the person is guilty of an offence punishable upon conviction by a fine or imprisonment for up to 2 years. 

 

Procedural fairness: The Australian Competition and Consumer Commission’s accountability framework for investigations provides guidance on the governance and management structures of the ACCC and how the ACCC exercises its powers. There is a general right to be heard before sanctions or remedies are imposed by the Federal Court.

 

ACCC’s powers of investigation can be reviewed. Such cases involve judicial review, which focuses on whether the decision making process was the correct one, rather than assess the merit of whether it was the correct decision on the facts. 

 

Confidentiality: Where information is provided to the ACCC on a confidential basis, the ACCC endeavours to keep that information confidential where possible. The exceptions to this are often when the agency is compelled by law to disclose the information.

 

The ACCC does have some legal obligations to protect confidential information, as set out in section 155AAA of the CCA as well as other protections in the Public Service Act 1999, Public Service Regulations 1999 and the Crimes Act 1914. In most circumstances, the ACCC requires that there is no restriction on the use of information internally. 

 

4. Remedies and sanctions

The CCA provides for civil pecuniary penalties against both corporations and individuals for breaches of the Act. Other forms of relief include injunctions, orders disqualifying an individual from managing corporations and community service orders, or punitive adverse publicity orders. Criminal sanctions may also be applied for cartels (see Section II).

 

The Federal Court is the body responsible for any decision to impose sanctions or remedies for conducts in contravention with the CCA. The Court may impose certain remedies such as compensation of affected parties or divestitures.

 

According to Section 76, a business in breach of Part IV of the CCA which prohibits restrictive trade practices (e.g. cartel conducts, misuse of market power, and anti-competitive mergers) may be subject to a pecuniary penalty as follows, whichever is greater:

a)  AUD10 million

b)  three times the total value of the benefits obtained by one or more persons and that are reasonably attributable to the offence or contravention

c)  where benefits cannot be fully determined, 10% of the annual turnover of the company (including related corporate bodies) in the preceding 12 months

 

5. Appeal

 

A bifurcated system of competition enforcement is in place. The judicial role in competition law matters is divided between the Australian Competition Tribunal (ACT) and the Federal Courts. 

 

The ACT deals with appeals from ACCC’s first-instance determinations in relation to authorisations of restrictive trade practices and mergers. The ACT also reviews applications related to the authorisation of mergers that, while failing to meet the requisite legal standard for their authorisation, are argued to result in public benefits justifying their authorisation. Finally, the ACT is responsible for the review of certain decisions of the ACCC in relation to regulatory determinations. The ACT is entitled to exercise all the powers of the ACCC, and may affirm, set aside or vary the ACCC’s determinations as if sees fit. 

 

A decision made by the Federal Court upon a proceeding initiated by the ACCC (decisions at first instance are adopted by a single federal court judge sitting alone) may be appealed to the Full Federal Court (comprising three judges) and then to the High Court of Australia.

 

6. Private enforcement

Damages claims: Section 82 of the CCA allows for private actions for loss or damage caused by conduct contravening Part IV of the CCA (anti-competitive agreements, abuses of dominance or anti-competitive mergers and acquisitions). Private lawsuits are only available to the person who suffered the loss or damage. Private enforcement is available independently of public enforcement. The party may benefit from related ACCC investigations and proceedings. 

 

Injunction claims: Under Section 80, the Court may issue an injunction at the request of the Commission or any other person.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).