Bill
Competition and Consumer Amendment (Misuse of Market Power) Bill 2017
passed, as at 2017-08-23. Treasury portfolio.
- Sponsor
- Not recorded
- Portfolio
- Treasury
Recorded stages
- introduced — 2016-12-01
- second reading — 2016-12-01
- second reading — 2017-03-23
- second reading — 2017-03-27
- second reading — 2017-03-27
- committee — 2017-03-28
- third reading — 2017-03-28
- introduced — 2017-03-29
- second reading — 2017-03-29
- second reading — 2017-08-14
- second reading — 2017-08-14
- committee — 2017-08-14
- third reading — 2017-08-14
- other — 2017-08-15
- passed — 2017-08-15
- royal assent — 2017-08-23
Divisions
- The majority voted against a [motion](http://www.openaustralia.org.au/debates/?id=2017-03-27.113.1) introduced by Labor MP [Chris Bowen](https://theyvoteforyou.org.au/people/representatives/mcmahon/chris_bowen), which means it was unsuccessful. The bill asked the House of Representatives to refuse to agree to the bill's main idea. In parliamentary jargon, it refused the House to read the bill for a [second time](http://www.peo.gov.au/learning/fact-sheets/making-a-law.html). ### What was the bill's main idea? According to the [bill's homepage](http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/r5788), the bill was introduced to: * *strengthen the prohibition on corporations with substantial market powers from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition in markets in which they directly or indirectly participate* * *remove provisions in relation to telecommunications-specific anti-competitive conduct and the competition notices and exemption order regime* The [bill's digest](http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1617a/17bd087) has more information. ### Motion text > *That all the words after "That" be omitted with a view to substituting the following words:* > *"The House declines to give this bill a second reading and calls on the Government to explain why it is introducing a dangerous piece of economic policy that is legally unworkable, will chill competition, and will create uncertainty for business".* — 2017-03-27, House of Representatives: negative, ayes 65, noes 79
- The majority voted to agree with the bill's main idea, which means the House of Representatives can now discuss it in more detail. In parliamentary jargon, they agreed to read the bill for a [second time](http://www.peo.gov.au/learning/fact-sheets/making-a-law.html). ### What was the bill's main idea? According to the [bill's homepage](http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/r5788), the bill was introduced to: * *strengthen the prohibition on corporations with substantial market powers from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition in markets in which they directly or indirectly participate* * *remove provisions in relation to telecommunications-specific anti-competitive conduct and the competition notices and exemption order regime* The [bill's digest](http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1617a/17bd087) has more information. — 2017-03-27, House of Representatives: affirmative, ayes 80, noes 64
- The majority voted against an [amendment](https://www.openaustralia.org.au/senate/?gid=2017-08-14.186.4) introduced by South Australian Senator [Nick Xenophon](https://theyvoteforyou.org.au/people/senate/sa/nick_xenophon), which means it failed. ### What do these amendments do? Senator Xenophon [explained that](https://www.openaustralia.org.au/senate/?gid=2017-08-14.186.4: > *This relates to adverse costs orders. As I indicated in my second reading contribution, no matter how good a piece of legislation is—and I think it is fair to say that this has good elements, but I believe it should have gone further. Notwithstanding that, we need an ability to have real access to justice for competition law in this country. As I indicated previously, there are many businesses who get advice from their lawyer saying there has been an abuse of market power—predatory pricing or whatever the breach may be—but the lawyer then advises their client, 'By the way, if you want to take this to court, you'll be spending a couple of million dollars and you might be up for an adverse cost order in the millions of dollars.' An adverse cost order could be $5 million, $10 million or $15 million, depending on the complexity of the case, because these can be complex matters.* — 2017-08-14, Senate: negative, ayes 24, noes 36
- The majority voted in favour of a [motion](https://www.openaustralia.org.au/senate/?gid=2017-08-14.196.6) to agree with the bill, as amended. This means they can now vote on whether to pass the bill in the Senate. ### What does this bill do? According to the [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1617a/17bd087) (a document put together by the parliamentary library): > *The purpose of the Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 (the Bill) is to amend the Competition and Consumer Act 2010 (CCA) to reflect the Government’s acceptance of certain recommendations of the Competition Policy Review (the Harper Review). Specifically, the Bill introduces changes to section 46 of the CCA which relates to the misuse of market power, namely:* > > * *removing the ‘take advantage’ and ‘proscribed purposes’ aspects of the current law* > > * *removing explicit references to predatory pricing* > > * *introducing a ‘conduct’ test and a ‘purpose, effect, or likely effect’ test* > > * *introducing a ‘substantially lessening competition’ test* > > * *amending the scope of the markets that misuse of market power is to be subject to* > > * *introducing a set of pro-competitive and anti-competitive mandatory factors for courts to apply.* > > *The Bill also repeals Divisions 2 and 3 of Part XIB of the CCA which deal with telecommunications-specific anti‑competitive conduct, as a consequence of amending section 46.* — 2017-08-14, Senate: affirmative, ayes 41, noes 19
- The majority voted in favour of a motion to pass the bill in the Senate. In parliamentary jargon, they voted to read it for a third time. This means that the bill will now be sent back to the House of Representatives, where our MPs will decide on whether they agree with the amendment made by the Senate. If so, the bill will become law. ### What does this bill do? According to the [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1617a/17bd087) (a document put together by the parliamentary library): > *The purpose of the Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 (the Bill) is to amend the Competition and Consumer Act 2010 (CCA) to reflect the Government’s acceptance of certain recommendations of the Competition Policy Review (the Harper Review). Specifically, the Bill introduces changes to section 46 of the CCA which relates to the misuse of market power, namely:* > > * *removing the ‘take advantage’ and ‘proscribed purposes’ aspects of the current law* > > * *removing explicit references to predatory pricing* > > * *introducing a ‘conduct’ test and a ‘purpose, effect, or likely effect’ test* > > * *introducing a ‘substantially lessening competition’ test* > > * *amending the scope of the markets that misuse of market power is to be subject to* > > * *introducing a set of pro-competitive and anti-competitive mandatory factors for courts to apply.* > > *The Bill also repeals Divisions 2 and 3 of Part XIB of the CCA which deal with telecommunications-specific anti‑competitive conduct, as a consequence of amending section 46.* — 2017-08-14, Senate: affirmative, ayes 41, noes 19
Plain-language summary
Written by a model from the explanatory memorandum; not the record, as at 2016-12-01.
The bill would make it harder for big companies to use their market power in a way that harms competition.
It rewrites the existing ban to judge conduct by whether it would probably reduce competition in related markets, rather than by whether it hurts a specific rival.
The new test would rely on court rulings already used for other parts of the Act, and only companies with significant market power would be covered.
- Strengthens the prohibition on misuse of market power by corporations.
- Replaces the three existing prohibited purposes with a test based on substantially lessening competition.
- Limits the ban to markets connected to the corporation that raise competition concerns.
- Applies the new test only to corporations that hold substantial market power.
Corporations with a substantial degree of market power.
Sources
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billhome
frl act