7 min read
The ACCC has released updated guidelines for navigating the amended prohibition on the misuse of market power. These updates follow the release of interim guidelines in November 2017. While the guidelines are indicative of the ACCC's approach to interpreting the amended prohibitions, they are not determinative of the approach a court will take.
In the guidelines, the ACCC gives a broad overview of the amended misuse of market power provision, which prohibits a corporation with substantial market power from engaging in conduct that has the purpose, effect, or likely effect, of substantially lessening competition in a market. The ACCC then gives high-level examples of types of conduct that may contravene the prohibition, including:
- refusing to supply;
- predatory pricing;
- loyalty rebates;
- margin squeezing; and
- tying and bundling.
The guidelines also address the role of having a genuine commercial purpose in determining whether conduct contravenes the amended misuse of market power prohibition, stating that the commercial rationale of particular conduct may be relevant to understanding that conduct, but will not provide a defence if the conduct still has the effect, or likely effect, of substantially lessening competition. For example, the guidelines note that a genuine commercial purpose of seeking to protect the employment of workers would not excuse refusing to supply a competitor if that refusal has the likely effect of substantially lessening competition.
Significantly, the ACCC's guidelines no longer refer to standardised or national pricing by large retail chains for efficiency purposes as an example of the type of conduct that may not contravene the amended prohibition.
The ACCC has released updated guidelines for navigating the prohibition on concerted practices that substantially lessen competition. These updates follow the release of interim guidelines in November 2017. The guidelines are indicative of the ACCC's approach to interpreting the amended prohibitions, but are not determinative of the approach a court will take.
The guidelines note that a concerted practice will often involve the exchange of strategic commercial information between independent firms, which may facilitate alignment of companies' competitive behaviour and soften competition between them. This softening of competition may occur through making such information available in a new way – including by doing so more quickly, in a form more readily processed or in a manner that makes the information more reliable. The ACCC gives an example of airlines using a common online reservation system to disclose future airfares not yet available for purchase.
The guidelines also note that industry and professional associations must be careful not to facilitate anti-competitive arrangements among members, and that the sharing of sensitive data through such associations, even where aggregated and anonymised, may risk contravening the prohibition on concerted practices.
Relevantly, the ACCC's guidelines on authorisation of non-merger conduct, also recently amended, note that the process for authorising potential concerted practices is the same as for other conduct, and encourages parties to approach the ACCC for guidance on commercial proposals that raise concerted practice issues.
The ACCC is seeking public comment on its proposed Rules Framework for the Consumer Data Right (the CDR), in anticipation of legislation implementing the CDR delegating rule-making responsibilities to the ACCC. The CDR is first to be applied to the banking sector, before being rolled out to the energy and telecommunications industries.
Written submissions are open until 12 October 2018, with the publication of the draft rules expected to follow in December 2018. The ACCC will also seek stakeholders' input by holding forums in Melbourne, Sydney and online.
The ACCC has announced it will not oppose two major infrastructure transactions:
- the proposed acquisition of APA Group by a consortium led by CK Infrastructure (the CK Consortium); and
- the proposed acquisition of a majority interest in the WestConnex project by a consortium led by Transurban (the Sydney Transport Partners Consortium).
The ACCC's decisions follow public merger reviews lasting almost three months and six months respectively, and the ACCC accepting court enforceable undertakings.
The CK Consortium's undertaking provides for the divestment of APA Group gas infrastructure assets in Western Australia, being the Parmelia and Goldfields gas pipelines and the Mondarra gas storage facility. The Sydney Transport Partners Consortium's undertakings provide for the publication of particular traffic data, in an effort to assist prospective bidders to compete for future toll road concessions.
Allens acts for the CK Consortium in relation to its proposed acquisition of APA Group, and for the NSW Government in relation to the sale of a majority interest in the WestConnex project.
ACCC Chair Rod Sims has confirmed that the ACCC has launched an investigation into the sale in Australia of 'fake honey', being honey mixed with other sugary substances, such as corn, rice or beet syrup.
Mr Sims was quoted as saying that the ACCC 'had a team on it straight away', following Fairfax and 7.30 reporting in a joint investigation that nuclear magnetic resonance tests at German laboratory QSI indicated that 12 of 28 jars of honey sold as 'pure honey' in Australian supermarkets were 'adulterated'.
The ACCC's investigations follow previous enforcement action taken in 2014 in relation to the sale of honey. At that time, various companies paid penalties for representing that they sold Australian honey, when testing showed that the products in question mainly comprised sugars from corn and sugar cane, and were produced in Turkey.
The ACCC has opened an investigation into the online travel booking agency industry, amid concerns surrounding the conduct of online platforms. Independent hotel and motel operators have alleged that online travel agents are leveraging the increased reliance on online travel agents into higher commissions and price parity clauses.
ACCC Chair Rod Sims has noted that the misuse of market power reforms, which came into effect in November 2017, were potentially applicable to this industry, and that the ACCC was 'looking again whether we've got the ability to force more change'.
This investigation follows the ACCC instituting proceedings against Trivago, alleging misleading hotel price advertising, as we discussed in the previous edition of In Touch.