The Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 (Misuse of Market Power Bill) has passed the House of Representatives and is currently before the Senate.

Prior to passing the Misuse of Market Power Bill through the House of Representatives, the government amended the commencement date and removed the mandatory factors for consideration by the Courts when determining whether alleged conduct substantially lessens competition.

Commencement date

The commencement date has been amended to ensure “the new [misuse of market power provision] does not commence until, and unless, authorisation for conduct that may breach [new provision] becomes available.”

Originally the operative parts of the Misuse of Market Power Bill were to commence six months following Royal Assent or on a date proclaimed. Following the amendment, the new misuse of market power provision will commence upon commencement of Schedule 1 to the Competition and Consumer Amendment (Competition Policy Review) Act 2017, and only upon that law’s commencement. The Competition and Consumer Amendment (Competition Policy Review) Bill 2017 (Competition Policy Review Bill) will amend the authorisation provisions to permit corporation to “seek authorisation on the basis of public benefit for conduct which may otherwise contravene section 46.” The Competition Policy Review Bill was introduced to the House of Representatives and was read for a second time on 30 March 2017.

Mandatory factors removed

As noted in our originally issued article, the Senate Economics Legislation Committee recommended the removal of the mandatory factors for consideration by the Courts when determining whether alleged conduct substantially lessens competition. Acting on the Committee’s recommendation the government amended the Misuse of Market Power Bill to remove the mandatory factors, noting:

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.” (Footnote: Competition and Consumer Amendment (Misuse of Market Power) Bill 2016 Supplementary Explanatory Memorandum)

Next step – a pause for Easter

Having passed the House of Representatives the Misuse of Market Power Bill was introduced to the Senate for its second reading.

The second reading process has now been adjourned, the Senate having broken for the Easter break. Sittings of the Senate are not scheduled to resume until 9 May 2017 (budget week) with a further break then scheduled until 13 June 2017. We do not expect significant developments until the June sittings.

To view original article on the Misuse of Market Power Bill click here.