Notification is an alternative process to authorisation that is available where parties propose to engage in small business collective bargaining, exclusive dealing or resale price maintenance.
Collective bargaining occurs where two or more small businesses come together to negotiate with a supplier or a customer about terms, conditions and/or prices.
In addition to engaging in bargaining, collective bargaining groups sometimes want to be able to refuse to supply to, or buy from, a particular customer or supplier, unless or until they reach agreement on terms and conditions. This is called a collective boycott, and there is provision for parties to include this in the notified conduct if they wish to do so.
The protection from legal action provided by a collective bargaining notification that does not include a collective boycott commences 14 days after the notification is validly lodged, unless the ACCC objects within the 14 day period.
If the notification includes collective boycott conduct the legal protection commences 60 days after the notification is validly lodged, unless the ACCC objects within the 60 day period.
The ACCC will assess a collective bargaining notification to determine whether any benefit to the public that is likely to result outweighs any detriment to the public that is likely to result.
Who can lodge a collective bargaining notification?
A business that is part of the collective bargaining group can lodge a notification, or a representative such as an industry association, can lodge it on behalf of the other members in the group, including future members.
A trade union or an officer of a trade union cannot lodge a notification.
To lodge a valid collective bargaining notification, each member of the group (and any future members when they join) must reasonably expect that the value of the transactions it will make with the target over a 12-month period under the arrangement will not be greater than $3 million (or higher amounts as set by regulations).
Authorisation or notification?
There are some circumstances when lodging an application for authorisation for collective bargaining will be more suitable than a notification, such as where the transaction thresholds are exceeded, or the applicant is a trade union.
Contact the ACCC on 02 6243 1368 or at firstname.lastname@example.org for more information.
Exclusive dealing involves one trader imposing restrictions on another's freedom to choose with whom, or in what, or where they deal.
Third line forcing
Third line forcing involves the supply of goods or services, or the supply of goods or services at a particular price or discount, on condition that the purchaser acquires goods or services from a particular third party, or a refusal to supply because the purchaser will not agree to that condition.
From 6 November 2017, third line forcing is no longer prohibited outright (‘per se’) under the Act and will only raise concerns under the Act if it has the purpose, effect or likely effect of substantially lessening competition. This means that a notification is only necessary if you are at risk of breaching this purpose or effect test, so most parties engaging in third line forcing will no longer need to lodge notifications.
Other types of exclusive dealing, including conduct sometimes referred to as ‘full line forcing’, involve the supply of goods or services on condition that the buyer:
- will not acquire, or will limit the acquisition of, goods or services from a competitor of the supplier
- will not resupply, or will resupply only to a limited extent, goods or services acquired from a competitor of the supplier, or
- will not resupply the goods or services to others, or will resupply only to a limited extent, the goods or services to particular persons, classes of persons or in particular places.
The ACCC will assess a notification to determine whether the notified conduct:
- has the purpose, effect or likely effect of substantially lessening competition, and
- if so, in all the circumstances, does the notified conduct result in a likely public benefit which would outweigh the likely public detriment?
Protection from legal action commences on the date a valid notification is lodged.
In broad terms, resale price maintenance (RPM) occurs when a supplier of goods or services (e.g. a manufacturer or wholesaler) specifies a minimum price below which a reseller must not on-sell, or advertise for sale, those goods or services.
RPM may arise in several ways, including if the supplier makes it a condition of supply that the reseller must (or threatens to withdraw supply if the reseller does not):
- sell the goods or services at a certain price
- not sell below a certain price
- only discount to an extent that is ‘agreed’ or not discount at all
- comply with a recommended retail price (RRP) or not price a certain percentage below it.
RPM is a per se breach of the Act, which means it is prohibited outright, regardless of whether it has the purpose, effect or likely effect of substantially lessening competition.
Changes to the Act from 6 November 2017 mean that it is now possible to obtain protection from the Act for RPM conduct by lodging a notification. Prior to this date, ACCC authorisation was the only way to obtain legal protection for RPM conduct. Authorisation will continue to be available, so now businesses proposing to engage in RPM have a choice of lodging a notification or seeking authorisation.
Assessment of RPM notifications
The ACCC will assess an RPM notification to determine whether the likely benefit to the public from the RPM conduct will outweigh the likely detriment to the public from the conduct.
The protection from legal action provided by lodging a notification for RPM conduct automatically commences 14 days after the notification was validly lodged, unless the ACCC issues a draft notice objecting to the notification within that period.
The notification process is public and the notification and all relevant submissions by the notifying party and interested parties are placed on the notifications public register.
Notifying parties and interested parties providing information to the ACCC regarding a notification may ask that the information, or parts of it, be excluded from the public register because it is confidential. All confidentiality claims must be substantiated.
The public version of the notification must contain sufficient information to enable consultation on your proposal.
See fees & forms for lodging a notification.
The ACCC prefers notifications to be lodged by email to the General Manager, Competition Exemptions (formerly Adjudication), ACCC at email@example.com, but they can also be lodged by mail or in person at an ACCC office.
Once the notification is assessed as validly lodged, it will be placed on the ACCC public register, on the ACCC website.