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Report

Advisory report on the Competition and Consumer (Price Signalling) Amendment Bill 2010 and the Competition and Consumer Amendment Bill (No. 1) 2011

Publisher
Economics Competition Price signalling Australia
Resources
Attachment Size
apo-nid25317.pdf 610.51 KB
Description

This inquiry compared two Bills that have the same purpose – to control price signalling in Australian markets.

In November 2010, the Hon Bruce Billson MP introduced a Bill to this effect and the Treasurer, the Hon Wayne Swan MP, introduced a government Bill in March 2011. The government Bill followed a consultation process, including an exposure draft in December 2010.

Although the Bills have similar aims, they take different approaches. Mr Billson’s Bill only applies to the communication of price related information to a competitor, for the purpose of encouraging the competitor to vary their price, and where the communication has the effect of substantially lessening competition. This Bill applies to the economy generally.

The Treasurer’s Bill creates two prohibitions. The first is where a firm privately communicates price related information to a competitor. This is described as a per se offence because the conduct of itself is so unredeeming that no further elements are required for liability. The second prohibition is where a firm generally communicates information relating to price, business strategy, or its capacity, and does so with the purpose of substantially lessening competition.

The Treasurer’s Bill applies to sectors of the economy stipulated in regulations. The Treasurer has committed to applying the Bill initially to the banking sector and conducting a review before extending it further.

This inquiry found that the Treasurer’s Bill would have a stronger effect and this is the reason why the committee is supporting it over Mr Billson’s Bill. The committee’s conclusion is consistent with evidence provided by the competition regulator, the Australian Competition and Consumer Commission. It stated that elements of Mr Billson’s Bill would meant that it would be of little practical use to the Commission in controlling price signalling.

Publication Details
Access Rights Type:
open