Part IV of the Trade Practices Act 1974 (the Act) covers anti-competitive practices that limit or stop competition. It fosters the competitive environment to give consumers a choice in price, quality and service. It prohibits commercial conduct that substantially lessens competition in a market, as a lack of competition might allow some traders to push prices up and lower the quality of the goods and services they offer to consumers.
Some anti-competitive conduct is prohibited outright (e.g. price fixing), while other types are prohibited only if they substantially lessen competition. A substantial lessening of competition is apparent when the ability of buyers to shop around for a deal that suits them is significantly diminished.
There are some circumstances in which a refusal to supply is unlawful under the Act. These include a misuse of market power, third line forcing, boycotts, resale price maintenance, and placing limitations on resellers. Further information on these restrictive trade practices can be found in the ACCC publications, Refusal to deal, Summary of the Trade Practices Act: and additional responsibilities of the ACCC under other legislation, and Small business and the Trade Practices Act.
If conduct falls into one of these illegal categories, then the business or individual affected can take their own court action or complain to the ACCC. When considering whether to take action, we must give prime importance to promoting competition in the particular market as a whole. We will look at all relevant information, including matters that may not be directly related to the complaint.
We will then decide whether to try to resolve the matter by talking to the supplier, accepting enforceable undertakings, or by instituting proceedings in the Federal Court.
While we can get orders restoring supply or stopping the illegal conduct, we cannot always seek damages for the complainant. If we successfully prove a breach of the Act the court may hand down penalties. Affected business can bring a ‘coat tails’ action in the court for damages.
If we institute court proceedings, the complainant is likely to be required to give evidence.
Predatory pricing occurs when a company sets its prices at a sufficiently low level with the purpose of damaging or forcing a competitor to withdraw from the market.
Section 45 of the Act prohibits contracts, arrangements or understandings that would be likely to substantially lessen competition in a market. To arrive at this decision, there are a number of factors to consider.
The Trade Practices Act 1974 (the Act) has specific provisions prohibiting powerful players from abusing their market power. These prohibitions are contained in Section 46 of the Act, which prohibits the misuse of market power.
