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Developments in Australian Competition Law

Recent developments in Australian Competition Law highlight significant changes in cartel prosecutions and market power misuse. A record penalty of $36 million was imposed on Visy for its involvement in a cardboard box cartel, with Amcor granted immunity. The potential criminalization of cartels is being discussed, calling for jail terms for serious offenders. Key amendments include updates on predatory pricing and unconscionable conduct, aimed at protecting small businesses. These changes reflect a robust approach to enforcing fair competition and preventing anti-competitive behaviors.

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Developments in Australian Competition Law

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  1. Developments in Australian Competition Law ABA International Asia/Pacific Antitrust Round-Up Fiona Crosbie, Partner Allens Arthur Robinson

  2. Issues • Cartel News • Record penalty imposed on Visy in cardboard box cartel • The likely criminalisation of cartels Misuse of Market Power • Amendments to misuse of market power prohibition • Predatory pricing amendments • Unconscionable conduct amendments

  3. Cartels: Record penalty ordered against Visy • Visy and Amcor have a combined market share of 90% in the corrugated fibre packaging market. • Visy and Amcor entered into understandings including: • maintaining market share and customers; • annual price increases; and • compensation understandings (for loss of customers). • Amcor granted immunity. • Visy fined $36 million – agreed penalty with regulator.

  4. Cartels: the likely criminalisation of cartels • The current position • Pecuniary penalties • Amendments in 2006: • increased maximum penalty to $10 million; • ‘three times the gain’ or 10% of annual turnover of corporate group; and • rule against indemnification of offending directors.

  5. Cartels: the likely criminalisation of cartels • The push for criminalisation • This week our PM revisited the introduction of jail terms • Suggestions by others include: • apply to ‘serious’ conduct with ‘dishonest’ intention • dual system (punishment and recovery) • possible exception for small business, primary industry and trade unions

  6. Misuse of market power: developments Three developments: • 1. (a) misuse of market power can occur in a different market (b) clarification of ‘substantial degree of market power’ • 2. predatory pricing amendments • 3. unconscionable conduct amendments

  7. Misuse of market power: predatory pricing A Corporation with a substantial market share • must not sell or offer to sell goods or services • at a price below what it costs the corporation • for a sustained period • with a purpose of either • eliminating or substantially damaging a competitor; • preventing entry of a person into that market; or • deterring or preventing a person from engaging in competitive conduct.

  8. Misuse of market power: unconscionable conduct • Specifically aimed to protect small business • transaction limit of $10 million • company supplied must not be a listed company • Non-exhaustive list of factors • strengths and bargaining power of supplier and small business • whether small business was able to understand documents relating to supply of goods or services; • extent of consistency of supplier dealings with other like small businesses. • Unilateral variation clauses

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