Summary
The ACCC is proposing to develop a ‘class exemption’ that would provide legal protection for:
· businesses with an annual turnover of less than $10 million in the preceding financial year to collectively bargain with customers or suppliers, and
· all franchisees to collectively bargain with their franchisor regardless of their size or other characteristics
without them having to apply to the ACCC. An update document explaining how the ACCC proposes that the collective bargaining class exemption would work is available below.
A class exemption is a way for the ACCC to grant businesses an exemption from competition law for certain ‘classes of conduct’ that may otherwise carry a risk of breaching competition laws, but:
· do not substantially lessen competition, and/or
· are likely to result in overall public benefits.
This class exemption relates to collective bargaining, which is a process that allows competing businesses, such as farmers or retailers, to jointly negotiate with customers or suppliers over common issues (e.g. terms, conditions and/or prices). While collective bargaining may ordinarily breach competition laws, a class exemption would provide a ‘safe harbour’ for eligible businesses to collectively bargain without breaching the competition law. It would operate alongside the ACCC’s existing ‘authorisation’ and ‘notification’ processes, which a business that falls outside the class exemption could still use to seek legal protection on a case-by-case basis.
First round consultation
In August 2018, the ACCC released a Discussion Paper seeking feedback on its proposal to introduce a class exemption for collective bargaining (available below). Public submissions received are also available below.
Next steps
The ACCC is now developing a draft version of the class exemption. We will conduct a further round of public consultation on this draft version in February or March 2019. This will allow stakeholders to comment on both the proposed eligibility criteria and the precise details about how the class exemption will be framed, before we make a final decision.
In the interim, the update document provides information about how the proposed collective bargaining class exemption would work.