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Wednesday, 14 August 1974
Page: 933

Senator MURPHY (New South WalesAttorneyGeneral) - The purpose of this amendment is to treat bodies that are related to each other as one for the purpose of the exclusive dealing provisions. This is already provided for in relation to contracts in restraint of trade under clause 45. It was not so provided in the Bill because the view was taken that exclusive dealing is a vertical practice by which a relatively powerful supplier imposes restrictive conditions on a relatively weak producer. The view has been taken that bodies which are related to each other would not need to resort to arrangements of the kind mentioned in this clause. It is felt that it would suffice for the supplying company to conform to a unilateral policy and that a deeming provision that the related companies were one is unnecessary. On a similar approach no such provisions are contained in the existing retail price maintenance provisions.

The Opposition has pressed for the inclusion of such a provision. When it was considered at first blush it seemed that no harm would result from the inclusion of such a provision. However, on closer consideration it has appeared that the provision would not be appropriate for subclauses (3) and (4). Those sub-clauses provide for restrictions to be compulsorily imposed upon third parties. To include a provision as proposed by the Opposition would enable a strong supplier to force a purchaser to deal exclusively with a subsidiary of the supplier because the supplier and the subsidiary would be treated as one person. Therefore the Government must oppose the amendment in the form in which it has been proposed.

We might have the situation that is commonly occurring in the banking industry where a bank operates a travel department. Allegations have been made- some of them have been established satisfactorily- that some banks say to a person who is going overseas that he will not get credit and perhaps need not look to the bank in the future for an overdraft if he does not do his travel business through the bank's travel agency. There we have a situation in which a body which has a public licence- I am talking about a banking li cence, to use a convenient term- is really using the licence virtually to force people to do other kinds of business with the bank. If one were to apply the Opposition's amendment right through the clause it would mean that this kind of conduct could be continued if the bank were simply to say instead: 'If you do not do it, not with our travel department but with our travel company, which is a related company'. In that case we would have the same kind of conduct, which ought not to be permitted. The Government would be prepared to agree to the amendment if it were altered so as to exclude conduct covered by sub-clauses (3) and (4). That could easily be done by inserting after the word 'conduct' in Senator Greenwood's amendment the words 'other than conduct of a kind referred to in sub-sections (3) and (4)'. If that modification of the amendment is acceptable to Senator Greenwood, the Government would not oppose it. In other words, the amendment would then read:

(6)   This Section does not apply with respect to any conduct other than conduct of a kind referred to in sub-sections (3) or( 4) engaged in by a body corporate . . .

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