Authorisation and notification are processes whereby the ACCC has the power to grant immunity from court action for certain practices that would otherwise be in breach of the Act.
The immunity given by authorisation operates only from the time it is granted in the form of a final authorisation by the ACCC and the relevant appeal period lapses.
The ACCC’s only function in considering an application for authorisation is to apply one of two tests, depending on the conduct in question.
For agreements that may substantially lessen competition, the applicant must satisfy the ACCC that the agreement results in a benefit to the public that outweighs any anti-competitive effect.
For primary and secondary boycotts, resale price maintenance, third line forcing, and mergers, the applicant must satisfy the ACCC that the conduct results in a benefit to the public such that it should be allowed to occur.
The ACCC must look at the effect on competition in the market overall, not at the effect on individual competitors.
Once the application has been considered the ACCC issues a draft determination and provides an opportunity for interested parties to request a conference. After the conference (if any) the ACCC reconsiders the application and issues a final determination. However, the ACCC is not required to issue a draft determination or to provide an opportunity for interested parties to request a conference in respect of a merger authorisation.
Authorisation cannot be granted for misuse of market power (s. 46) or s. 50 mergers.
Merger clearances
Clearance applications for s. 50 mergers are covered by separate legislative requirements.
The ACCC must decide on such applications within 40 business days (which may be extended in certain circumstances).
Clearance is deemed to be refused if the ACCC does not make a decision within the required timeframe.
The ACCC may only grant clearance if it is satisfied that the acquisition would not have the effect or likely effect of substantially lessening competition in a market. Clearance cannot be granted for an acquisition that has occurred.
If the ACCC refuses to grant a clearance, or grants it subject to conditions, the person who applied for clearance may seek a review by the Australian Competition Tribunal.
Parties seeking to authorise a merger may apply directly to the Australian Competition Tribunal.
The Tribunal must make a decision on such applications within 3 months (which can be extended in certain circumstances). Authorisation is deemed to be refused if the Tribunal does not make a decision within the required timeframe.
The ACCC has a formal role in helping the Tribunal with all authorisation proceedings.
Authorisation may only be granted if the Tribunal is satisfied that the proposed acquisition would, or be likely to, result in such a benefit to the public that the acquisition should be allowed to occur. Authorisation cannot be granted for an acquisition that has already occurred.
Notification is available only for exclusive dealing, including third line forcing and collective bargaining.
For notification of exclusive dealing conduct, immunity operates from the date of lodgement with the ACCC and remains unless revoked by the ACCC. The protection cannot be revoked unless the ACCC is satisfied that the conduct substantially lessens competition in the relevant market and there is insufficient public benefit flowing from the conduct to outweigh the lessening of competition.
For third line forcing, protection is not accorded from the time of notification but comes into force at the end of a prescribed period from the time the ACCC receives the notice. Protection is not accorded if the ACCC forms the view within the specified period that the likely benefit to the public from the conduct will not outweigh the likely detriment to competition.
If immunity from a notification has begun it is open at any time for the ACCC to review the conduct and issue a draft revocation notice as with other notifications. Once a final revocation notice has been issued, the conduct will no longer be protected after 31 days or from such later date as the ACCC may specify.
Notification is available for a collective bargaining arrangement. Such an arrangement involves two or more competitors coming together to negotiate terms and conditions with a supplier or an acquirer of goods or services (known as the ‘target’)
The notification process allows a business within the collective bargaining group to lodge a notification process allows a business within the collective bargaining group to lodge a notification on behalf of other businesses in the group. A nominated representative of the group, who is not a member of the group, may also lodge a collective bargaining notification on behalf of the group.
Protection afforded by the notification commences 28 days from the date the notification is lodged, unless the ACCC objects in that period. In most cases the ACCC object if it concludes that the public benefits likely to result from the collective bargaining arrangement will not outweigh the anti-competitive detriments.
In all cases, before a notification can be revoked an opportunity must be given for a conference with interested parties. An application for a review of a decision to revoke can be made to the Australian Competition Tribunal.
For both authorisation and notification procedures the ACCC is required to keep a public register of all related documents. This information is available for inspection at the ACCC’s offices and key documents are available on the ACCC’s website (www.accc.gov.au). However, commercially sensitive material for which confidentiality has been granted by the ACCC will not be available for public inspection.
