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Competition and Consumer Act 2010 (Cth)

Section 95AA
Commission may determine class exemptions

Note: The Harper Reforms came into operation on 6 November 2017. This section was repealed and replaced. The provision set out below has been updated to incorporate this change.

 

The provision

(1) The Commission may, by legislative instrument, determine that one or more specified provisions of Part IV do not apply to a kind of conduct specified in the determination, if the Commission is satisfied in all the circumstances:

(a) that conduct of that kind would not have the effect, or would not be likely to have the effect, of substantially lessening competition; or

(b) that conduct of that kind would result, or would be likely to result, in a benefit to the public that would outweigh the detriment to the public that would result, or would be likely to result, from conduct of that kind.

Note: For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901.

(2) The Commission may specify in the determination any one or more of the following limitations:

(a) a limitation to persons of a specified kind;

(b) a limitation to circumstances of a specified kind;

(c) a limitation to conduct that complies with specified conditions.

(3) The determination must specify the period, ending no later than the end of the period of 10 years beginning on the day it is made, for which it is to be in force.

(4) The determination:

(a) enters into force on the day it is made or on such later day (if any) as is specified in the determination; and

(b) ceases to be in force at the earlier of the following times:

(i) if the determination is revoked—at the time the revocation takes effect;

(ii) at the end of the period specified under subsection (3) of this section.

(5) While the determination remains in force, but subject to section 95AB and any limitations specified under subsection (2), the provisions of Part IV specified in the determination do not apply in relation to conduct of the kind specified in the determination.

 

Legislative history

Repealed and replaced by Competition and Consumer Amendment (Competition Policy Reform) Act 2017 (see commentary below)

Inserted by Trade Practices Legislation Amendment Act (No 1) 2006 (Act 131 of 2006)

 

Commentary

In 2017 the mechanism for formal clearance was removed and Division 3 of Part VII repealed.

It was replaced with a new Division 3, 'Class Exemptions'.

 

Division 3 of Part VII of the Act was introduced in 2006 following recommendations by the Dawson Committee. The Division allowed parties to apply for 'formal clearance' of their mergers and provides that merger authorisation applicatons proceed directly to the Australian Competition Tribunal, rather than the ACCC at first instance with the opportunity of appeal to the Tribunal. Immediately prior to the provision being repealed and replaced on 6 November 2017, it took the following form:

95AA Simplified outline of this division
This Division is about merger clearances and merger authorisations.

It relates to section 50: that section prohibits a person acquiring shares in the capital of a body corporate or assets of another person if the acquisition would have, or be likely to have, the effect of substantially lessening competition in a market. If a person has a clearance or authorisation for the acquisition, section 50 will not prevent the person from making the acquisition.

The main differences between merger clearances and authorisations are:

  • different bodies decide whether they should be granted;
  • different timeframes apply for when the body must make its decision;
  • they have different tests that need to be satisfied for them to be granted;
  • merits review is not available for decisions on authorisations.

For merger clearances (see Subdivision B):

  • the Commission grants them;
  • it must make its decision whether to grant within 40 businessdays (which can be extended if the applicant agrees or the Commission so decides), and if it does not, the application is taken to be refused;
  • it cannot grant the clearance unless it is satisfied that the acquisition would not have the effect, or be likely to have the effect, of substantially lessening competition in a market;
  • if it refuses to grant a clearance, or grants a clearance subject to conditions, then the person who applied for the clearance may apply to the Tribunal under Division 3 of Part IX for review of the Commission’s decision.

For merger authorisations (see Subdivision C):

  • the Tribunal grants them;
  • it must make its decision whether to grant within 3 months (which can be extended to 6 months in special circumstances), and if it does not, the application is taken to be refused;
  • it cannot grant the authorisation unless it is satisfied that the acquisition would result, or be likely to result, in such a benefit to the public that the acquisition should be allowed to take place.

Subdivision D contains a prohibition on providing false or misleading information to the Commission or Tribunal under this Division or Division 3 of Part IX.