Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2016-2017
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
COMPETITION AND CONSUMER AMENDMENT (MISUSE OF MARKET
POWER) BILL 2016
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be moved on behalf of the Government
(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)
Table of contents
General outline and financial impact....................................................... 5
Chapter 1 Adjustment to commencement ...................................... 7
Chapter 2 Removing mandatory factors (Chapter 1) ..................... 9
Chapter 3 Regulation impact statement (Chapter 3) .....................11
General outline and financial impact
Commencement
Amendment 1 adjusts the commencement of the Bill to ensure that the
new section 46 does not commence until, and unless, authorisation for
conduct that may breach section 46 becomes available.
Misuse of market power
Amendments 2 and 3 remove the pro-competitive and anti-competitive
'mandatory factors' from the new section 46.
Regulation impact statement: Misuse of market power
A correction is made to the regulatory burden estimate table in Chapter 3
to the explanatory memorandum.
5
Chapter 1
Adjustment to commencement
Outline of chapter (Amendment 1)
Amendment 1 amends section 2 of this Bill to provide that the whole of
this Bill commences at the same time as Schedule 1 to the Competition
and Consumer Amendment (Competition Policy Review) Act 2017.
However, if that Schedule does not commence, this Bill does not
commence.
The Competition and Consumer Amendment (Competition Policy
Review) Bill 2017 is intended for imminent introduction. That Bill will
contain amendments to the authorisation provisions to allow corporations
to seek authorisation on the basis of public benefit for conduct which may
otherwise contravene section 46.
The amendment to the commencement provision of this Bill ensures that
the new section 46 does not commence until, and unless, authorisation is
available for conduct to which section 46 may apply.
The commencement of Schedule 2 to the Bill, which contains
amendments to Part XIB of the Act, remains unchanged. Schedule 2 will
commence at the same time as Schedule 1.
7
Chapter 2
Removing mandatory factors (Chapter 1)
Outline of chapter (Amendments 2 and 3)
Amendment 2 amends item 1 of Schedule 1 to the Bill to remove the
pro-competitive and anti-competitive 'mandatory factors' from section 46.
As introduced, the new subsection 46(2) listed several pro-competitive
and anti-competitive 'mandatory factors' to which the court must have
regard in determining whether conduct had the purpose, effect or likely
effect of substantially lessening competition. The inclusion of these
factors was recommended by the Harper Review to mitigate concerns that
section 46 may capture pro-competitive conduct.
However, in its report on the Bill released on 16 February 2017, the
Senate Economics Legislation Committee recommended removing the
mandatory factors.
The mandatory factors are removed to reduce the complexity of the new
section 46, reduce uncertainty as to how the courts may interpret and
weigh each of the factors, and reduce the risk that 'substantially lessening
competition' would unintentionally take on a different meaning in the
context of section 46 compared to other provisions which use the same
concept but do not contain mandatory factors.
The removal of the mandatory factors does not change the objective of the
new section 46, which is to target anti-competitive behaviour by firms
with substantial market power, while allowing legitimate pro-competitive
behaviour even if this results in harm to inefficient competitors.
Consistently with this objective, the new section 46 continues to focus on
harm to the competitive process, rather than individual competitors, and
does not shield inefficient competitors from the natural effects of strong
competition.
Amendment 3 makes a corresponding amendment is made to item 2 of
Schedule 1 to the Bill, to remove the mandatory factors from the Schedule
version of section 46.
9
Chapter 3
Regulation impact statement (Chapter 3)
Outline of chapter
This supplementary explanatory memorandum provides an opportunity to
correct a typographical error in the regulatory burden estimate (RBE)
table in Chapter 3 to the original explanatory memorandum.
The original RBE table incorrectly listed the annual average regulatory
costs as business from usual as "-2.5", which would indicate a decrease in
regulatory burden, rather than "2.5" which is consistent with an increase
in regulatory burden.
As corrected, the RBE table is:
Average annual regulatory costs (from business as usual)
Change in Business Community Individuals Total change
costs ($ organisations in costs
million)
Total, by 2.5 - - 2.5
sector
The remainder of the text of the original explanatory memorandum
correctly refers to, and explains, an increase in regulatory costs. These
costs are not expected to change following the amendments described in
Chapters 1 and 2.
11
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