Key Points:

Submissions are due by Friday 12 February 2016, after which the Government will announce its final position by the end of March 2016.

The Harper Review is the most comprehensive review into Australia's competition policies and laws since the Hilmer Review 22 years ago. One aspect of the Harper Review which has attracted controversy concerns the recommendation to broaden the misuse of market power provisions in section 46 of the Competition and Consumer Act 2010 (Cth) to capture conduct which has the purpose or effect of substantially lessening competition.

In its response, the Federal Government indicated that it wished to consult further on reform options. It has now acted on that by releasing a Discussion Paper inviting stakeholders to provide six options for reform of section 46. By publishing these options the Government has stated that it would like to reinvigorate the debate on section 46 rather than continuing to analyse the provision in binary terms of full-Harper or no-Harper.

Current position on the misuse of market power

In its current form section 46 prohibits corporations that have a substantial degree of power in a market from taking advantage of that power for the purpose of eliminating or substantially damaging a competitor, preventing the entry of a person into a market or deterring or preventing a person from engaging in competitive conduct.

Section 46 has been considered by the full Federal Court or the High Court on seven occasions only in the last 15 years. The provision has been subject to 11 independent parliamentary reviews since 1976, which have each sparked significant debate concerning the effectiveness and scope of the provision.

In their submissions to the Harper Review, stakeholders again expressed concern that the current misuse of market power provisions may not be effective in preventing anti-competitive behaviour.

What change does the Harper Review recommend?

The Harper Review has recommended the following changes to section 46:

  • removing the "take advantage" test which has been an impediment to successful ACCC action over the years;
  • expanding the "purpose" test to a "purpose, effect or likely effect" test, so that conduct with anti-competitive effects is caught (as in the EU and other jurisdictions);
  • ensuring that the focus is damage to the competitive process through a competition test, rather than damage to a particular competitor;
  • extending the ACCC authorisation provisions to include conduct under section 46; and
  • issuing ACCC guidelines to assist business to understand the ACCC's approach to the provision.

Six options in the Government's Discussion Paper on section 46

In the Discussion Paper, the Government has proposed six options.

Click here to view table.

Final position to be announced by 31 March 2016

The Government encourages stakeholders' opinions on these options. Submissions are due by Friday 12 February 2016, after which the Government will announce its final position by the end of March 2016.