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Trade Practices Legislation Amendment (No 1) Act 2006



First set of Dawson Reforms, including increased civil penalties and major changes to merger procedures


Key changes

Merger clearance and authorisation

(1) provided option of 'formal' ACCC clearance for mergers which would provide parties with certainty that merger could not be challenged and provide time limits and an appeal mechanism to the ACT.

(2) provide for merger authorisations to proceed directly to the ACT rather than proceeding through the ACCC.

Non-merger authorisations

(1) Provide a time limit of six months for the hearing of non-merger authorisation applications

(2) Provide for the waiver of all or part of an authorisation application fee

Collective bargaining

To provide a mechanism for small business collective bargaining notification similar to exclusive dealing notification. Small business defined by reference to likely value of contracts with target (set at $3m annually)

Exclusionary provisions - joint ventures

To provide a limited joint venture defence; if it can be demonstrated that arrangement is for purpose of a JV and does not SLC then parties will not contravene exclusionary provision prohibition (new s 76C).

Price fixing - joint ventures

Section 45A(2) repealed - joint venture defence now provided in new s 76D - applies if it can be demonstrated that arrangement is for purpose of a JV and does not SLC.

Dual listed companies

New s 49 created to deal with dual listed companies - provides that a corporation must not make or give effect to a DLC arrangement if it has the purpose, effect or likely effect of SLC. Authorisation is available if the arrangement would result in such a benefit to the public that it should be allowed.

Related companies

Provides that third line forcing does not apply in relation to related corporations by adding, at the end of subsections 47(6) and (7), ' not being a body corporate related to the corporation'.

Search and Seizure

Provides for search and seizure powers of ACCC including entry by consent and the issuing of search warrant by magistrate in some cases.

Civil penalties

Increased (for part IV conduct other than secondary boycotts) from $10m maximum to the greatest of :

(i)  $10,000,000;

(ii)  if the Court can determine the value of the benefit that the body corporate, and any body corporate related to the body corporate, have obtained directly or indirectly and that is reasonably attributable to the act or omission—3 times the value of that benefit;

(iii)  if the Court cannot determine the value of that benefit—10% of the annual turnover of the body corporate during the period (the turnover period) of 12 months ending at the end of the month in which the act or omission occurred; ...

Also provides for disqualifications of parties found guilty of a Part IV contravention from managing corporations for a period of time.

Also prohibits a corporation from indemnifying an individual against a civil penalty or for legal costs associated with defending an action in which they are found to have contravened the Act

Local government bodies

Provides that part IV applies to local government bodies to the extent that they carry on a business (directly or indirectly through an incorporated company in which it has a controlling interest).