ACCC seeks comment on draft guidelines for Part IIIA deferral of arbitrations and backdating of determinations guidelines

The ACCC has released draft guidelines regarding Part IIIA deferral of arbitrations and backdating of determinations for public comment.

The draft guidelines are proposed to replace the current version of the guidelines, which were published in 2007.

The guidelines were originally made to satisfy a requirement of the Trade Practices Amendment (National Access Regime) Act 2006 which commenced on 1 October 2006. The current guidelines will sunset on 1 October 2017. As the requirement to have guidelines is ongoing, as set out in section 44ZO(8) of the CCA, the ACCC is reviewing the existing arrangements ahead of remaking the guidelines so that they remain in force beyond 1 October 2017.

The purpose of these guidelines is to explain how the ACCC might apply the provisions on deferral of arbitrations and backdating of final determinations when making decisions under Part IIIA of the Competition and Consumer Act 2010 (CCA). They provide further information about how the ACCC can:

  • defer arbitration of an access dispute where it is also considering an access undertaking on related issues, and/or
  • backdate a final determination and apply payment of interest to a backdated determination.

To date the ACCC has completed one arbitration under Part IIIA. The ACCC was not required to consider deferral of the arbitration and/or the backdating of determinations in relation to that matter. Given that to date the guidelines have not been tested, the ACCC proposes to maintain the existing guidelines subject to minor, non-substantive drafting amendments and updated references to legislation (for example, to reflect the introduction of the CCA). The ACCC’s draft view is that substantive changes are not required at this time. 

The ACCC is inviting written submissions on the draft guidelines. Submissions should be provided to the ACCC no later than 16 June 2017.

For the draft guidelines and information on how to make a submission visit the Part IIIA deferral and backdating guidelines consultation page.

Background

Part IIIA of the Competition and Consumer Act 2010, also known as the National Access Regime, establishes a legal regime to facilitate third party access to services provided through facilities with natural monopoly characteristics. The objects of Part IIIA are:

  • to promote the economically efficient operation of, use of, and investment in the infrastructure by which services are provided, thereby promoting effective competition in upstream and downstream markets
  • to provide a framework and guiding principles to encourage a consistent approach to access regulation in each industry.

Part IIIA provides a number of mechanisms by which the terms and conditions of access to services may be determined. One way is for the relevant Minister to declare a service or services provided by means of a facility. If declaration occurs, access seekers have an enforceable right to negotiate terms and conditions of access with the service provider and, failing agreement, a right to arbitration of the dispute before the ACCC.

In 2006, the then Trade Practices Act was amended to allow parties to lodge access undertakings and access codes with the ACCC after a service has been declared under Part IIIA. This is intended to provide a means for achieving certainty on access terms and conditions and facilitating negotiations between access providers and access seekers.

As the Part IIIA amendments facilitate the provision of post declaration undertakings, this generates the possibility that the ACCC may need to deal with parallel processes. To allow for this possibility, the ACCC, when arbitrating an access dispute and has the discretion to decide whether or not to suspend either an undertaking or arbitration process, if an undertaking is lodged after an arbitration has commenced. The ACCC can also backdate a final determination. Thereby removing an incentive for the access provider to delay the negotiate/arbitrate process and to lessen incentives to demand unreasonable terms and conditions of access.

 

Published date: 
26 May 2017