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Trade Practices Legislation Amendment Bill (No. 1) 2007

Schedule 2 Misuse of market power

Part 1 Amendment of the Trade Practices Act 1974

1  Subsection 46(1)

After “of that power”, insert “in that or any other market”.

1A  After subsection 46(1)

Insert:

       (1AA)  A corporation that has a substantial share of a market must not supply, or offer to supply, goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying such goods or services, for the purpose of:

                     (a)  eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; or

                     (b)  preventing the entry of a person into that or any other market; or

                     (c)  deterring or preventing a person from engaging in competitive conduct in that or any other market.

        (1AB)  For the purposes of subsection (1AA), without limiting the matters to which the Court may have regard for the purpose of determining whether a corporation has a substantial share of a market, the Court may have regard to the number and size of the competitors of the corporation in the market.

1B  Subsection 46(1A)

Omit “subsection (1)”, substitute “subsections (1) and (1AA)”.

1C  Paragraph 46(1A)(a)

Omit “paragraph (1)(a)”, substitute “paragraphs (1)(a) and (1AA)(a)”.

1D  Paragraph 46(1A)(b)

After “paragraphs (1)(b) and (c)”, insert “and (1AA)(b) and (c)”.

2  After subsection 46(3)

Insert:

          (3A)  In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the Court may have regard to the power the body corporate or bodies corporate has or have in that market that results from:

                     (a)  any contracts, arrangements or understandings, or proposed contracts, arrangements or understandings, that the body corporate or bodies corporate has or have, or may have, with another party or other parties; and

                     (b)  any covenants, or proposed covenants, that the body corporate or bodies corporate is or are, or would be, bound by or entitled to the benefit of.

          (3B)  Subsections (3) and (3A) do not, by implication, limit the matters to which regard may be had in determining, for the purposes of this section, the degree of power that a body corporate or bodies corporate has or have in a market.

          (3C)  For the purposes of this section, without limiting the matters to which the Court may have regard for the purpose of determining whether a body corporate has a substantial degree of power in a market, a body corporate may have a substantial degree of power in a market even though:

                     (a)  the body corporate does not substantially control the market; or

                     (b)  the body corporate does not have absolute freedom from constraint by the conduct of:

                              (i)  competitors, or potential competitors, of the body corporate in that market; or

                             (ii)  persons to whom or from whom the body corporate supplies or acquires goods or services in that market.

          (3D)  To avoid doubt, for the purposes of this section, more than 1 corporation may have a substantial degree of power in a market.

3  After subsection 46(4)

Insert:

          (4A)  Without limiting the matters to which the Court may have regard for the purpose of determining whether a corporation has contravened subsection (1), the Court may have regard to:

                     (a)  any conduct of the corporation that consisted of supplying goods or services for a sustained period at a price that was less than the relevant cost to the corporation of supplying such goods or services; and

                     (b)  the reasons for that conduct.

4  After subsection 151AH(5)

Insert:

          (5A)  In determining, for the purposes of this Part, the degree of power that a person has, or that persons have, in a telecommunications market, regard may be had to the power that the person has, or that the persons have, in that market that results from:

                     (a)  any contracts, arrangements or understandings, or proposed contracts, arrangements or understandings, that the person has or may have, or that the persons have or may have, with another party or parties; and

                     (b)  any covenants, or proposed covenants, that the person is or would be, or that the persons are or would be, bound by or entitled to the benefit of.

5  Subsection 151AH(6)

Omit “Subsection (5), does not”, substitute “Subsections (5) and (5A) do not”.

6  After subsection 151AH(6)

Insert:

          (6A)  For the purposes of this Part, without limiting the matters to which the Court may have regard for the purpose of determining whether a person has a substantial degree of power in a telecommunications market, a person may have a substantial degree of power in a telecommunications market even though:

                     (a)  the person does not substantially control the market; or

                     (b)  the person does not have absolute freedom from constraint by the conduct of:

                              (i)  competitors, or potential competitors, of the person in that market; or

                             (ii)  persons to whom or from whom the person supplies or acquires goods or services in that market.

          (6B)  To avoid doubt, for the purposes of this Part, more than 1 person may have a substantial degree of power in a telecommunications market.

7  Subparagraphs 151AJ(2)(b)(i) and (ii)

After “of that power”, insert “in that or any other market”.

8  After subsection 151AJ(2)

Insert:

          (2A)  Without limiting the matters to which regard may be had for the purpose of determining whether a carrier or carriage service provider has engaged in anti-competitive conduct as defined in subsection (2), regard may be had to:

                     (a)  any conduct of the carrier or carriage service provider that consisted of supplying goods or services for a sustained period at a price that was less than the relevant cost to the carrier or carriage service provider of supplying such goods or services; and

                     (b)  the reasons for that conduct.

8A  Paragraph 151AJ(5)(c)

Omit “paragraph 46(1)(a)”, substitute “paragraphs 46(1)(a) and (1AA)(a)”.

9  Subsection 46(1) of the Schedule

After “of that power”, insert “in that or any other market”.

9A  After subsection 46(1) of the Schedule

Insert:

       (1AA)  A person that has a substantial share of a market must not supply, or offer to supply, goods or services for a sustained period at a price that is less than the relevant cost to the person of supplying such goods or services, for the purpose of:

                     (a)  eliminating or substantially damaging a competitor of the person or of a body corporate that is related to the person in that or any other market; or

                     (b)  preventing the entry of a person into that or any other market; or

                     (c)  deterring or preventing a person from engaging in competitive conduct in that or any other market.

        (1AB)  For the purposes of subsection (1AA), without limiting the matters to which the Court may have regard for the purpose of determining whether a person has a substantial share of a market, the Court may have regard to the number and size of the competitors of the person in the market.

9B  Subsection 46(1A) of the Schedule

Omit “subsection (1)”, substitute “subsections (1) and (1AA)”.

9C  Paragraph 46(1A)(a) of the Schedule

Omit “paragraph (1)(a)”, substitute “paragraphs (1)(a) and (1AA)(a)”.

9D  Paragraph 46(1A)(b) of the Schedule

After “paragraphs (1)(b) and (c)”, insert “and (1AA)(b) and (c)”.

10  After subsection 46(3) of the Schedule

Insert:

          (3A)  In determining for the purposes of this section the degree of power that a person (the first person ) or bodies corporate has or have in a market, the Court may have regard to the power the first person or bodies corporate has or have in that market that results from:

                     (a)  any contracts, arrangements or understandings, or proposed contracts, arrangements or understandings, that the first person or bodies corporate has or have, or may have, with another party or other parties; and

                     (b)  any covenants, or proposed covenants, that the first person or bodies corporate is or are, or would be, bound by or entitled to the benefit of.

          (3B)  Subsections (3) and (3A) do not, by implication, limit the matters to which regard may be had in determining, for the purposes of this section, the degree of power that a person or bodies corporate has or have in a market.

          (3C)  For the purposes of this section, without limiting the matters to which the Court may have regard for the purpose of determining whether a person has a substantial degree of power in a market, a person may have a substantial degree of power in a market even though:

                     (a)  the person does not substantially control the market; or

                     (b)  the person does not have absolute freedom from constraint by the conduct of:

                              (i)  competitors, or potential competitors, of the person in that market; or

                             (ii)  persons to whom or from whom the person supplies or acquires goods or services in that market.

          (3D)  To avoid doubt, for the purposes of this section, more than 1 person may have a substantial degree of power in a market.

11  After subsection 46(4) of the Schedule

Insert:

          (4A)  Without limiting the matters to which the Court may have regard for the purpose of determining whether a person has contravened subsection (1), the Court may have regard to:

                     (a)  any conduct of the person that consisted of supplying goods or services for a sustained period at a price that was less than the relevant cost to the person of supplying such goods or services; and

                     (b)  the reasons for that conduct.



 

Part 2 Application provisions

12  Application of amendments

(1)        The amendments made by items 1, 2 and 3 of this Schedule apply in relation to contraventions of section 46 of the Trade Practices Act 1974 (as amended by this Act) that occur after the commencement of those items.

(2)        The amendments made by items 4 to 8 of this Schedule apply in relation to contraventions of section 151AK of the Trade Practices Act 1974 (as amended by this Act) that occur after the commencement of those items.

(3)        The amendments made by items 9, 10 and 11 of this Schedule apply in relation to contraventions of section 46 of the Schedule to the Trade Practices Act 1974 (as amended by this Act) that occur after the commencement of those items.