Where businesses are concerned that their proposed conduct may give rise to a breach of the competition provisions of the Act, they can seek authorisation from the ACCC. If the ACCC is satisfied that the relevant legal test is met and grants authorisation, this removes the risk of legal action under the competition provisions.
The legal test that the ACCC will apply when considering an application for authorisation depends on the conduct being engaged in.
For conduct that involves a potential or actual per se breach of the Act (conduct that is prohibited outright), such as cartel conduct, the ACCC may grant authorisation only if it is satisfied that the likely public benefit from the conduct outweighs the likely public detriment. This test applies to the entire application for authorisation even if only part of the application is for conduct that may breach a per se provision of the Act.
For other conduct (conduct that does not involve a breach of a per se provision of the Act), the legal test has two limbs. The ACCC may grant authorisation if it is satisfied that either:
- the proposed conduct would not be likely to substantially lessen competition or
- the likely public benefit from the conduct outweighs the likely public detriment.
If the applicable authorisation test is met, the ACCC may grant authorisation to conduct that may breach one or more of the competition provisions in the Act, including agreements between competitors, cartel conduct, mergers, misuse of market power and concerted practices.
The types of conduct or arrangements the ACCC is often asked to authorise include:
- collective bargaining – for example where two or more competitors come together to negotiate terms and conditions with a customer or supplier
- some (but not all) codes of conduct – for example where provisions of a code impose standards of behaviour on signatories that may restrict competition, require training from specific providers and/or impose sanctions for code breaches
- industry levies – for example an agreement among industry participants to impose a levy on the sale of a particular product, the proceeds of which may then be used to fund research and development or a product stewardship arrangement for the proper disposal of environmentally harmful products
- certain joint ventures or alliances – for example a supply agreement where one competitor agrees to stop producing a particular product and instead purchase it from the other party to the agreement.
The Merger authorisation process is separate to the authorisation of non-merger conduct.
Applying for authorisation is only necessary if proposed conduct would or might breach the competition provisions of the Act.
Any of the businesses involved in the proposed conduct can apply on behalf of all the participating businesses. Alternatively, an industry association may apply on behalf of all, or a subset of, their members, including those that may join in the future.
Businesses are encouraged to contact the ACCC for guidance on the application process. Comprehensive guidelines are available to assist applicants to prepare their application.
Notification is an alternative process to authorisation for seeking legal protection to engage in small business collective bargaining, exclusive dealing and resale price maintenance. In some cases it can be faster than seeking authorisation, but it is not available for all types of conduct. Businesses can contact the ACCC to discuss whether an authorisation or notification may be more suitable for particular arrangements.
Contact the ACCC for more information on 02 6243 1368 or at firstname.lastname@example.org about the application process and what information will be relevant to the ACCC’s assessment.
- Guidelines for Authorisation of conduct (non-merger)
- Streamlined collective bargaining process for small business
- Guidelines for excluding information from the public register for authorisation, merger clearance and notification processes
- The benefits of working with other small businesses: collective bargaining and collective boycotts