An attempt by the Queensland Newsagents Federation to prevent two newsagents from setting up a new newsagency in Townsville has resulted in court-enforceable undertakings to the Australian Competition and Consumer Commission about a possible breach of the Trade Practices Act 1974.
"In or around November 2000 two QNF members, operating as part of the Nextra franchise, opened newsagencies in Townsville in a new shopping centre", ACCC Chairman, Professor Allan Fels, said today. Under an authorisation of newsagency 'territories', which had been earlier cancelled, this centre would previously have 'belonged' to another newsagent. On 7 December, the QNF wrote to the two newsagents advising them that their QNF membership had been suspended due to a breach of the QNF Code of Ethics. The QNF later indicated that all Nextra newsagents' membership would be reviewed. Membership of the QNF has advantages for newsagents.
"The QNF now acknowledges that its Code, which allowed suspension if 'territories' were infringed, was not enforceable as the 'territories' themselves' were no longer protected by an ACCC authorisation. "The QNF has acknowledged the serious nature of the matters and has rescinded its Code of Ethics. The QNF Board does not contemplate formulating a new Code.
"It has moved to ensure that it and its members are properly informed about their obligations under the Trade Practices Act 1974. It will implement an education and compliance program on restrictive trade practices.
"The ACCC has agreed to accept the court-enforceable undertakings and acknowledges that the QNF had voluntarily approached the ACCC.
"The ACCC had considerable concern about QNF's conduct, particularly given the extensive discussion in the past between the QNF and the ACCC about the Act.
"Given the history of industry involvement with both the ACCC and the Australian Competition Tribunal, the action taken by QNF on this occasion was disappointing".
When the Australian Competition Tribunal made its determination in November 1998 to revoke the previous ACCC Authorisation, it noted the resistance within the industry to changes in the system. The Tribunal commented on the fact that there was at that time no 'systematic, substantial, on-going agenda for significant change towards a more competitive distribution system'. Newsagents were described as 'creatures of the system'.
"Unfortunately that appears to have continued to be the case, and the reluctance within the industry to fully address these matters has no doubt contributed to the situation in which QNF found itself", Professor Fels said.
In support of its submission to the ACCC for an acceptance of its undertakings, QNF saw its undertaking giving it the flexibility to offer solutions addressing the cultural problems identified by the Tribunal. QNF has also offered an undertaking that it will implement an ongoing education program for members, informing them specifically of the changes to the industry and generally of their obligations under the Act.
"The ACCC readily understands the submission of QNF that change driven from within the industry in the manner proposed in the undertaking is likely to foster an industry-wide culture of compliance".