Section 45AT
Acquisition of shares or assets

(1) Sections 45AF, 45AG, 45AJ and 45AK do not apply in relation to a contract, arrangement or understanding containing a cartel provision, in so far as the cartel provision provides directly or indirectly for the acquisition of:

(a) any shares in the capital of a body corporate; or

(b) any assets of a person.

Note: A defendant bears an evidential burden in relation to the matter in subsection (1) (see subsection 13.3(3) of the Criminal Code and subsection (2) of this section).

(2) A person who wishes to rely on subsection (1) in relation to a contravention of section 45AJ or 45AK bears an evidential burden in relation to that matter.

Amended Competition and Consumer Amendment (Competition Policy Reform) Act 2017 (Act 114 of 2017)

The content of this provision did not change - it was simply renumbered

Introduced by Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009

Operative: 24 July 2009

Norcast S.ár.L v Bradken Limited (No 2) [2013] FCA 235 (19 March 2013) (bid rigging)
Para 15

The insertion of this provision was part of the package of reforms introducing criminal penalties for cartel conduct. The reforms also created a parallel civil cartel prohibition, replacing the former s 45A which dealt directly with price-fixing.

The reforms were initially recommend by the Dawson Committee as part of its 2002-2003 inquiry into the Competition Law provisions of the Trade Practices Act.

See further information and resources on the cartel page.

In Norcast S.ár.L v Bradken Limited (No 2) [2013] FCA 235, involving claims of bid rigging, the parties argued that s 44ZZRU operated and prevented a contravention of the cartel prohibitions.

Justice Gordon noted that s 44ZZRU 'expressly provides for the primacy of the prohibition against a contract, arrangement or understanding containing a cartel provision' and then carves out the overlap (para 281):

[para 281] 'It is limited in two respects. It is limited to a contract, arrangement or understanding containing a cartel provision in so far as the cartel provision provides directly or indirectly for the acquisition of shares in the capital of a company. In other words, the prohibition continues to apply to balance of the contract, arrangement or understanding containing a cartel provision except to the extent that the cartel provision provides directly or indirectly for the acquisition of shares in the capital of a company. The language of the section is "provides" not "relates to". It is specific in its terms.' [emphasis in original]

[para 282] 'Next, the carve out is limited by the fact that the application of ss 44ZZRJ and 44ZZRK to the relevant contract, arrangement or understanding is preserved by the words "in so far as". So long as the relevant contract, arrangement or understanding can stand with the excluded provision being severed, the balance can and will contravene those prohibitions ... matters that involve a substantial lessening of competition - completed acquisitions of shares - should remain subject to s 50. Other matters - such as the rigging of bids - remain and should remain subject to Div 1 of Pt IV.'

Her Honour then adopted the three step analysis to s 44ZZRU suggested in Beaton-Wells, C and Fisse, B, Australian Cartel Regulation (Cambridge University Press, 2011) at 301:

[para 283] In applying the s 44ZZRU exception to alleged cartel conduct, a three step analysis
may be appropriate:

1. identify the cartel provision in the contract, arrangement or understanding;

2. identify the provision that provides directly or indirectly for the acquisition of the NWS shares; and

3. determine whether the cartel provision in (1) is severable from the provision in (2).

...

In this case her Honour noted that the cartel provision provided that 'Castle Harlan would bid for the NWS shares and Bradken would not bid.' (para 284). The provisions relating to the acquisition of NWS shares were contained in the SPA and SGPA; this was separate from the bid rigging provision which pre-dated these agreements. Her Honour further held that the bidding provision did not 'indirectly' provide for the acquisition of NWS shares; rather, it related to the sales process and not the eventual acquisition of shares (para 284):

[para 284]: Once stage 2 [of the sale process] was complete, and Castle Harlan had lodged a final bid and Bradken had not, the work of the Bidding Provision was complete. For the same reason, s 50 did not and could not apply to the Bidding Provision in the Bid Rigging Arrangement - the provision did not directly or indirectly effect any acquisition. In the present case, the third step in the analysis does not arise.'