Late on Monday evening the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 (Cth) passed the Senate with minor amendments.

As a result of the amendments, it was necessary for the Bill to be passed again by the House of Representatives. The Bill passed the House in its amended form this afternoon and is now awaiting Royal Assent.

The operative provisions, including the prospect of jail terms of up to 10 years for cartel conduct, will commence 28 days from the date of assent.

A link to our previous discussion of the Bill is here.

The recent amendments deal with the joint venture exceptions to both the civil cartel prohibitions and criminal cartel offences.

As noted in our previous update, the joint venture exceptions applied only where the cartel provision was contained in a contract (but not an arrangement or understanding), and provided other criteria were satisfied including that the provision was for the purposes of the joint venture.

The Government's amendments now extend the application of the joint venture exceptions to arrangements or understandings, but only where the parties to the arrangement or understanding:

(a) intended the arrangement or understanding to be a contract; and (b) reasonably believed that the arrangement or understanding was a contract,

at the time the arrangement was made or the understanding was arrived at.

The other requirements of the joint venture exceptions remain.

One of the other requirements of the joint venture exceptions is that the joint venture be for the production and/or supply of goods or services. Concerns had been expressed that currently lawful joint ventures that did not meet this criteria, such as joint ventures for the acquisition of goods or services or research and development joint ventures, would now be unlawful. The Government has sought to address this concern in part through an explanatory note inserted in the Act which reads:

"For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services."

Other examples are provided by the Government in an Explanatory Memorandum to the Bill of provisions in agreements between joint venturers which would either fall within either the joint venture exceptions or one of the anti-overlap exceptions to the cartel provisions.

Click to access:

Cartel Conduct Bill

Amendments to Cartel Bill