A further set of amendments were made to the Government’s price signalling Bill on 7 July as a result of debate in the House of Representatives.

Key points

The amendments introduce much needed new exceptions for syndicated lending, corporate workouts and discussions between banks and credit service providers. 

The amendments also narrow the scope of the outright prohibition on private price disclosures by excluding disclosures that are made “in the ordinary course of business”. 

The amendments go some way to addressing the large number of unintended consequences of the Bill, should it be enacted.

The Bill is due to be debated in the Senate in the August sitting of Parliament. 

The original prohibitions in the Bill were framed so broadly, they captures a range of innocuous disclosures that should not be affected by competition law. This is why there are now 15 separate exceptions to the prohibition on private disclosures of pricing information (many of which are specific to the banking sector).

If enacted, the Bill would take effect six months after it receives Royal Assent and would initially only apply to the banking sector. 

At this stage, it is not clear whether the Bill would only apply to some parts of the banking sector, or to all of the banking sector.  The new exceptions for syndicated lending and corporate workouts may indicate that the Government is intending the Bill to apply beyond the retail banking sector.

Proposed legislation initially applies to banks

If enacted, the proposed price signalling legislation would initially apply only to the banking sector. The banking sector will be defined by regulations (which have yet to be drafted).  Given the Bill incorporates exceptions for multi-lender financing transactions and corporate workouts, it is likely that the definition will extend beyond the retail banks.

Legislation may be extended

The Treasurer may extend the application of the legislation to non-banking sectors six months after the legislation comes into effect.

One of the recent amendments has added a requirement that regulations (which are yet to be drafted) must establish a process the Treasurer must follow before extending the application of the prohibitions to non-banking sectors of the economy. This process will presumably include a requirement for the Treasurer to consult with industries which might be affected by extending the application of the legislation.

ACCC favours extension

The ACCC has previously argued that the legislation should have a broad application and not be confined to the banking sector.

We understand that the ACCC currently believes the legislation should be extended to unleaded petrol, at the very least. It is difficult to predict whether the replacement of Graeme Samuel, the current Chairman of the ACCC, by Rod Sims on 1 August this year will have an impact on the Commission’s position.

Bill prohibits private price disclosures and anti-competitive public disclosures

A detailed overview of the price signalling Bill can be found in the April edition of the Regulator. The most recent amendments preserve the basic elements of the earlier Bill but expand the exceptions.


The Bill contains two key prohibitions:

  • Corporations are prevented from making private disclosures to their actual or potential competitors about the prices of their goods or services (where their competitor supplies or could potentially supply the same goods or services).  The recent amendments have added an element to this prohibition which requires that the relevant disclosure is not made “in the ordinary course of business”.  This is an important addition to the Bill, which will assist to address many of the unintended consequences of the Bill, and is discussed further below.
  • Corporations are prevented from disclosing information about prices, their capacity to supply or acquire goods or services, or their strategy where the disclosure is made for the purpose of substantially lessening competition in a market.

Exceptions to prohibitions

The amendments made to the Bill on 7 July do not affect the numerous exceptions which were present in the earlier version of the Bill, including for disclosures that are:

  • made to agents;
  • made by accident;
  • authorised by law;
  • made under the Corporation Act’s continuous disclosure regime;
  • made under a collective bargaining notice;
  • immunised by the ACCC by the authorisation or notification procedures; or
  • made to a related body corporate.

There are also a number of exceptions that apply only to the prohibition on private disclosures of pricing information. These exceptions protect certain disclosures made:

  • in relation to the supply or acquisition of goods;
  • to a corporation that was not known to be a competitor or potential competitor;
  • in connection with the acquisition of shares or assets; or
  • to participants in a joint venture or in negotiations for a joint venture.

Amendments introduce further exceptions to private disclosure prohibition

The amendments made to the Bill on 7 July are a response to concerns raised by stakeholders. Most of the amendments take the form of specific exceptions to the outright prohibition on private disclosure of pricing information to a competitor, and carve out practices that are commonplace in the banking sector.

Private disclosures “in the ordinary course of business” not caught

The Government has made a significant change to the prohibition on private disclosures of pricing information to a competitor by adding a requirement that the relevant private price disclosure “is not in the ordinary course of business”.

The Government has not provided an explanation of the intention of this amendment other than to say that, when taken with other amendments, it will “give the banking industry absolute certainty that it can continue to engage in legitimate business conduct”.

This added requirement is drafted quite broadly and will likely prevent a wide range of common private price disclosures from being caught by the prohibition.  It is a welcome development. 

There is an existing exemption in the Competition and Consumer Act 2010 for assets acquired in “the ordinary course of business” which has been considered by the Federal Court of Australia on at least one occasion.  On that occasion, the Court  observed that “the exclusion does not refer to the ordinary course of … [a particular person’s] particular business - it refers to the ordinary course of business”, indicating that the test for whether a disclosure occurs in “ordinary course of business” has an objective element to it.1

Syndicated loans

A number of stakeholders have previously raised concerns that many multi-lender finance arrangements would be rendered impossible if the Bill was passed. Prior to the introduction of the latest amendments, the Government had maintained that such arrangements would take the benefit of the Bill’s joint venture defence. The latest amendments provide additional comfort by adding a specific exemption.

The private disclosure provision will not be breached by a disclosure that relates to loan or credit services that are supplied, or are likely to be supplied, by the corporation that makes the disclosure or to whom the disclosure is made.  In order for the exception to apply, the relevant corporations must be providing (or considering whether to provide) loan or credit services to a borrower and the disclosure must be related to the provision (or potential provision) of those services to the borrower.

Discussion between credit providers and credit service providers

The Government has also responded to concerns that discussions between banks and mortgage providers would be caught by the Bill. It has introduced an exception to protect disclosures between credit providers and credit service providers that are made in the course of the relationship between the two entities in their capacitates as credit provider and provider of a credit service.

Insolvency exception

Another exemption added to the Bill protects disclosures where lenders have been notified that the borrower (or the borrower’s guarantor) is or may become insolvent.

In order for the exemption to apply, the information disclosed must relate to loan or credit services supplied by one or more of the corporations making the disclosure and the disclosure must be for the purpose of them considering whether to take measures to return the borrower to solvency, or avoid or reduce the risk of the borrower becoming insolvent. 

The exception is narrow and may not cover all corporate work outs.  However, the new carve outs for disclosures made “in the ordinary course of business” and for disclosures made in the context of syndicated lending facilities should protect corporate workouts, even if the narrowly drafted insolvency exception does not.

Amendments do not address all concerns

Many of the submissions made to the Government on the proposed legislation have drawn attention to the potential for unintended consequences. To date, the Government has not been receptive to suggestions that it should abandon the legislation or significantly reduce its scope.  Instead, it has adopted a reactive approach of adding narrow carve outs to exempt competitively neutral disclosures and relying on the ACCC’s notification procedure to cover benign disclosures that slip through the net.

Prohibitions remain too broad

The exceptions for work outs, syndicated lending, discussions with credit service providers and communications in the ordinary course of business are welcome. However, they are symptomatic of a more fundamental problem with the proposed legislation. Because the prohibitions are framed so broadly, they capture a range of innocuous disclosures that should not be affected by competition law. This is why there are now 15 separate exceptions to the prohibition on private disclosures of pricing information (many of which are specific to the banking sector).

Extension by regulations is problematic

Another fundamental problem with the Bill is that it can be extended to other industries via regulations. The fact that several finance-specific exceptions were required in order to make the present Bill viable is an indication that the prohibitions have the potential to affect different industries in different ways. There is a significant risk that the subsequent extension of the Bill to other industries will result in further unintended consequences.

The new requirement that regulations must establish a process for considering future extensions partly addresses this concern.  However, the Government should consider changing the design of the prohibitions or including broader exceptions so that a raft of industry-specific exceptions will not be required if the application of the legislation is widened in the future.

Coalition’s Bill

The Coalition’s price signalling legislation remains an alternative to the Government’s Bill, though it appears that the Government’s Bill has greater support among the Greens and independents. Bruce Bilson continues to lead the charge against the Government’s Bill and has been pragmatic in seeking amendments that ease its burden.

If it was enacted, the Coalition’s Bill would set a much higher threshold, which would only be breached by a price communication that had both an anti-competitive purpose and a likely substantial anti-competitive effect. This elevated threshold would significantly reduce the potential for innocuous statements to be unintentionally caught.

Next steps

Now that the Government’s Bill has been passed by the House of Representatives, it is due to be debated in the Senate in August this year.

If enacted, the Government’s Bill would take effect 6 months after the date on which it receives Royal Assent.