The Revision Act altered the competition and consumer provisions of the TPA.

In relation to the competition provisions, it altered the misuse of market power provision, changing the threshold test from 'being in a position substantially to control a market' to 'substantial degree of market power' and making clear that a court can infer predatory purpose from conduct and surrounding circumstances. In relation to mergers, it introduced a new s 50A to deal with off-shore mergers, but retained the dominance test. It also amended the divestiture remedy for mergers and extended the circumstances in which Ministerial consent was requred under s 5 of the Act.

It also made various amendments to the consumer provisions, including changing the definition of consumer in s 4B - increasing the monetary limit from $15,000 to $40,000, and introducing section 52A to deal with unconscionable conduct.

The full Act can be found by following the links to the left. The key competition law changes are reproduced below:

Exclusionary provisions

Section 4D of the Principal Act is amended by inserting in sub-paragraphs (1) (b) (i) and (ii) "or classes of persons" after "particular persons".

Extended application of Parts IV and V

Section 5 of the Principal Act is amended by adding at the end the following sub-sections:

"(3) Where a claim under section 82 is made in a proceeding, a person is not entitled to rely at a hearing in respect of that proceeding on conduct to which a provision of this Act extends by virtue of sub-section (1) or (2) of this section except with the consent in writing of the Minister.

"(4) A person other than the Minister or the Commission is not entitled to make an application to the Court for an order under sub-section 87 (1) or (1A) in a proceeding in respect of conduct to which a provision of this Act extends by virtue of sub-section (1) or (2) of this section except with the consent in writing of the Minister.

"(5) The Minister shall give a consent under sub-section (3) or (4) in respect of a proceeding unless, in the opinion of the Minister-

(a) the law of the country in which the conduct concerned was engaged in required or specifically authorised the engaging in of the conduct; and

(b) it is not in the national interest that the consent be given.".

Additional operation of Act

Section 6 of the Principal Act is amended-

(a) by omitting paragraph (2) (f);

(b) by omitting from paragraph (2) (h) ", (f)";

(c) by inserting in paragraph (2) (h) ", 50A" after "50";

(d) by omitting from paragraph (2) (h) "or sub-section 88 (9)";

(e) by omitting sub-section (3) and substituting the following sub-section:

"(3) In addition to the effect that this Act, other than Part X, has as provided by sub-section (2), Divisions 1 and 1A of Part V have, by force of this sub-section, the effect they would have if-

(a) those Divisions (other than section 55) were, by express provision, confined in their operation to engaging in conduct to the extent to which the conduct involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast; and

(b) a reference in those Divisions to a corporation included a reference to a person not being a corporation."; and

(f) by adding at the end the following sub-sections:

"(4) In addition to the effect that this Act, other than Part X, has as provided by sub-sections (2) and (3), Division 1 of Part V (other than sections 53A, 55 and 61) also has, by force of this sub-section, the effect it would have if-

(a) that Division were, by express provision, confined in its operation to engaging in conduct in a Territory; and

(b) a reference in that Division to a thing done by a corporation in trade or commerce included a reference to a thing done in the course of the promotional activities of a professional person.

"(5) In the application of section 73 in relation to a supplier who is a natural person, that section has effect as if there were substituted for paragraph 73 (6) (a) the following paragraph:

'(a) the supplier had died or is an undischarged bankrupt or a person whose affairs are being dealt with under Part X of the Bankruptcy Act 1966; or' ".

Contracts, arrangements or understandings restricting dealings or affecting competition

Section 45 of the Principal Act is amended by omitting from sub-section (6) "of sub-section 88 (8)" (wherever occurring) and substituting "of sub-section 47 (10) or 88 (8)".

Covenants in relation to prices

Section 45C of the Principal Act is amended by omitting from sub-section (1) "a market" and substituting "any market".

Misuse of market power

Section 46 of the Principal Act is amended-

(a) by omitting sub-sections (1), (2), (3) and (4) and substituting the following sub-sections:

"(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power 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;

(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.

"(2) If-

(a) a body corporate that is related to a corporation has, or 2 or more bodies corporate each of which is related to the one corporation together have, a substantial degree of power in a market; or

(b) a corporation and a body corporate that is, or a corporation and 2 or more bodies corporate each of which is, related to that corporation, together have a substantial degree of power in a market, the corporation shall be taken for the purposes of this section to have a substantial degree of power in that market.

"(3) 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 shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that market is constrained by the conduct of-

(a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or

(b) persons to whom or from whom the body corporate or any of those bodies corporate supplies or acquires goods or services in that market.

"(4) In this section-

(a) a reference to power is a reference to market power;

(b) a reference to a market is a reference to a market for goods or services; and

(c) a reference to power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market.";

and

(b) by adding at the end the following sub-section:

"(7) Without in any way limiting the manner in which the purpose of a person may be established for the purposes of any other provision of this Act, a corporation may be taken to have taken advantage of its power for a purpose referred to in sub-section (1) notwithstanding that, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the corporation or of any other person or from other relevant circumstances.".

Mergers and other acquisitions

Section 50 of the Principal Act is amended-

(a) by omitting from sub-section (1) "control or" (wherever occurring);

(b) by inserting after sub-section (1) the following sub-section:

"(1A) A person other than a corporation shall not acquire, directly or indirectly, any shares in the capital, or any assets, of a corporation if-

(a) as a result of the acquisition, the person would be, or be likely to be, in a position to dominate a market for goods or services; or

(b) in a case where the person is in a position to dominate a market for goods or services-

(i) the corporation or a body corporate that is related to the corporation is, or is likely to be, a competitor of the person; and

(ii) the acquisition would, or would be likely to, substantially strengthen the power of the person to dominate that market.";

(c) by inserting in sub-section (2) ", or associated with," after "related to" (wherever occurring);

(d) by omitting from sub-section (2) "control or" (wherever occurring);

(e) by inserting after sub-section (2) the following sub-sections:

"(2A) For the purposes of this section, a body corporate shall be taken to be associated with another body corporate (not being another body corporate that is related to the first-mentioned body corporate) if one of those bodies corporate (in this sub-section referred to as the 'dominant body corporate') is, either alone or together with another body corporate that is, or other bodies corporate each of which is, related to the dominant body corporate, or associated with the dominant body corporate by another application or other applications of this sub-section, in a position to exert, whether directly or indirectly, a substantial degree of influence over the activities in a market of the other body corporate.

"(2B) For the purposes of sub-section (2A), the fact that a body corporate is in a position to exert a substantial degree of influence over the activities of another body corporate by reason only that-

(a) those bodies corporate are in competition in the same market; or

(b) one of those bodies corporate supplies goods or services to the other,

shall be disregarded.";

(f) by omitting from paragraph (3) (a) "or in a State" and substituting ", in a State or in a Territory";

(g) by omitting from paragraph (3) (b) "controlling or" (wherever occurring); and

(h) by omitting from sub-section (4) "corporation" (wherever occurring) and substituting "person".

After section 50 of the Principal Act the following section is inserted:

Acquisitions outside Australia

"50A. (1) Where a person acquires, outside Australia, otherwise than by reason of the application of paragraph (8)(b), a controlling interest in any body corporate and, by reason, but not necessarily by reason only, of the application of paragraph (8)(b) in relation to the controlling interest, obtains a controlling interest in a corporation or each of 2 or more corporations, the Tribunal may, on the application of the Minister, the Commission or any other person, if the Tribunal is satisfied that-

(a) as a result of the obtaining by the person of the last-mentioned controlling interest, the person would be, or be likely to be, in a position to dominate a substantial market for goods or services in Australia, in a State or in a Territory;

(b) in a case where the person is in a position to dominate such a market-

(i) the body corporate or another body corporate that is related to that body corporate is, or is likely to be, a competitor of the person or of a body corporate that is related to the person; and

(ii) the acquisition would, or would be likely to, substantially strengthen the power of the person to dominate that market; and

(c) the obtaining by the person of the last-mentioned controlling interest would not, in all the circumstances, result, or be likely to result, in such a benefit to the public that the obtaining of that controlling interest should be disregarded for the purposes of this section, make a declaration accordingly.

"(2) Where an application under sub-section (1) is made-

(a) the Tribunal shall give to-

(i) each corporation in relation to which the application relates; and

(ii) the Minister and the Commission, a notice in writing stating that the application has been made; and

(b) the persons referred to in paragraph (a) and, if the application was made by another person, that other person are entitled to appear, or be represented, at the proceedings following the application.

"(3) An application under sub-section (1) may be made at any time within 12 months after the date of the acquisition referred to in that sub-section in relation to which the application is made.

"(4) The Tribunal may, on the application of the Minister, the Commission or any other person, or of its own motion, revoke a declaration made under sub-section (1).

"(5) The Tribunal shall state in writing its reasons for making, refusing to make or revoking a declaration under sub-section (1).

"(6) After the end of 6 months after a declaration is made under sub-section (1) in relation to the obtaining of a controlling interest in a corporation or 2 or more corporations by a person or, if the person, before the end of that period of 6 months, makes an application to a presidential member for an extension of that period, after the end of such further period (not exceeding 6 months) as the presidential member allows, the corporation or each of the corporations, as the case may be, shall not, while the declaration remains in force, carry on business in the market to which the declaration relates.

"(7) Sub-section (1) does not apply in relation to an acquisition referred to in that sub-section if sub-section 50 (1) or (1A) applies in relation to that acquisition.

"(8) For the purposes of this section-

(a) a person shall be taken to hold a controlling interest in a body corporate if the body corporate is, or, if the person were a body corporate, would be, a subsidiary of the person (otherwise than by reason of the application of paragraph 4A (1) (b)); and

(b) where a person holds a controlling interest (including a controlling interest held by virtue of another application or other applications of this paragraph) in a body corporate and that body corporate-

(i) controls the composition of the board of directors of another body corporate;

(ii) is in a position to cast, or control the casting of, any votes that might be cast at a general meeting of another body corporate; or

(iii) holds shares in the capital of another body corporate,

the person shall be deemed (but not to the exclusion of any other person) to control the composition of that board, to be in a position to cast, or control the casting of, those votes or to hold those shares, as the case may be.".

Exceptions

Section 51 of the Principal Act is amended by omitting from paragraph (2) (a) "any provision of a contract, arrangement or understanding to the extent that the provision" and substituting "the making of a contract or arrangement or the entering into of an understanding, or to any provision of a contract, arrangement or understanding, to the extent that the contract, arrangement or understanding, or the provision,".

Injunctions

(1) Section 80 of the Principal Act is amended by inserting after sub-section (1) the following sub-section:

"(1AA) Where an application for an injunction under sub-section (1) has been made, whether before or after the commencement of this sub-section, the Court may, if the Court determines it to be appropriate, grant an injunction by consent of all the parties to the proceedings, whether or not the Court is satisfied that a person has engaged, or is proposing to engage, in conduct of a kind mentioned in sub-section (1).

(2) Section 80 of the Principal Act is amended-

(a) by omitting from sub-section (1) "sub-section (1A)" and substituting "sub-sections (1A) and (1B)"; and

(b) by omitting from sub-section (1A) "A person" and substituting "Subject to sub-section (1B), a person";

(c) by inserting in sub-section (1A) "or 50A" after "section 50"; and

(d) by inserting after sub-section (1A) the following sub-section:

"(1B) Where the Tribunal has, on the application of a person (in this sub-section referred to as the 'applicant') other than the Minister or the Commission, made a declaration under sub-section 50A (1) in relation to the acquisition by a person of a controlling interest in a corporation, the applicant is entitled to make an application under sub-section (1) for an injunction by reason that the corporation has contravened or attempted to contravene or is proposing to contravene sub-section 50A (6) in relation to that declaration.".

Divestiture

(1) Section 81 of the Principal Act is amended by adding at the end the following sub-section:

"(3) Where an application for directions under sub-section (1) or for a declaration under sub-section (1A) has been made, whether before or after the commencement of this sub-section, the Court may, if the Court determines it to be appropriate, give directions or make a declaration by consent of all the parties to the proceedings, whether or not the Court has made the findings referred to in sub-sections (1) and (1A).".

(2) Section 81 of the Principal Act is amended-

(a) by omitting from sub-section (1) "corporation" (wherever occurring) and substituting "person";

(b) by inserting after sub-section (1) the following sub-sections:

"(1A) Where-

(a) the Court finds, in a proceeding instituted under this Part, that a person (in this sub-section referred to as the 'acquirer') has acquired shares in the capital, or any assets, of a body corporate in contravention of section 50;

(b) the Court finds, whether in that proceeding or any other proceeding instituted under this Part, that the person (in this section referred to as the 'vendor') from whom the acquirer acquired those shares or those assets, as the case may be, was involved in the contravention; and

(c) at the time when the finding referred to in paragraph (b) is made, any of those shares or those assets, as the case may be, are vested in the acquirer or, if the acquirer is a body corporate, in any body corporate that is related to the acquirer,

the Court may, on the application of the Minister or the Commission, declare that the acquisition, in so far as it relates to the shares or assets referred to in paragraph (c), is void as from the day on which it took place and, where the Court makes such a declaration-

(d) the shares or the assets to which the declaration relates shall be deemed not to have been disposed of by the vendor; and

(e) the vendor shall refund to the acquirer any amount paid to the vendor in respect of the acquisition of the shares or assets to which the declaration relates.

"(1B) Where a declaration has been made under sub-section 50A (1) in relation to the obtaining of a controlling interest in a corporation, or in each of 2 or more corporations, the Court may, on the application of the Minister or the Commission, if it finds, or has in a proceeding instituted under section 80 found, that that corporation, or any of those corporations, as the case may be (in this sub-section referred to as the 'relevant corporation'), has contravened sub-section 50A (6), by order, for the purpose of ensuring that the obtaining of that controlling interest ceases to have the result referred to in paragraph 50A (1) (a) or (b), direct the relevant corporation to dispose of such of its assets as are specified in the order within such period as is so specified.

"(1C) Where an application is made to the Court for an order under sub-section (1) or a declaration under sub-section (1A), the Court may, instead of making an order under sub-section (1) for the purpose of securing the disposal by a person of shares or assets or an order under sub-section (1A) that the acquisition by a person of shares or assets is void, accept, upon such conditions (if any) as the Court thinks fit, an undertaking by the person to dispose of other shares or assets owned by the person."; and

(c) by inserting in sub-section (2) ",(1A) or (1B)" after "sub-section (1)".

Section 84 of the Principal Act is repealed and the following section is substituted:

Conduct by directors, servants or agents

"84. (1) Where, in a proceeding under this Part in respect of conduct engaged in by a body corporate, being conduct in relation to which section 46 or Part V applies, it is necessary to establish the state of mind of the body corporate, it is sufficient to show that a director, servant or agent of the body corporate, being a director, servant or agent by whom the conduct was engaged in within the scope of the person's actual or apparent authority, had that state of mind.

"(2) Any conduct engaged in on behalf of a body corporate-

(a) by a director, servant or agent of the body corporate within the scope of the person's actual or apparent authority; or

(b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, servant or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, servant or agent, shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate.

"(3) Where, in a proceeding under this Part in respect of conduct engaged in by a person other than a body corporate, being conduct in relation to which a provision of Part V applies, it is necessary to establish the state of mind of the person, it is sufficient to show that a servant or agent of the person, being a servant or agent by whom the conduct was engaged in within the scope of the servant's or agent's actual or apparent authority, had that state of mind.

"(4) Conduct engaged in on behalf of a person other than a body corporate-

(a) by a servant or agent of the person within the scope of the actual or apparent authority of the servant or agent; or

(b) by any other person at the direction or with the consent or agreement (whether express or implied) of a servant or agent of the first-mentioned person, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the servant or agent, shall be deemed, for the purposes of this Act, to have been engaged in also by the first-mentioned person.

"(5) A reference in this section to the state of mind of a person includes a reference to the knowledge, intention, opinion, belief or purpose of the person and the person's reasons for the person's intention, opinion, belief or purpose.".

Power of Commission to grant authorisations

Section 88 of the Principal Act is amended-

(a) by omitting sub-section (9) and substituting the following sub-section:

"(9) Subject to this Part, the Commission may, upon application by a person-

(a) grant an authorisation to the person to acquire shares in the capital, or to acquire assets, of a body corporate; or

(b) grant an authorisation to the person to acquire a controlling interest in a body corporate within the meaning of section 50A, and, while such an authorisation remains in force-

(c) in the case of an authorisation under paragraph (a)-section 50 does not prevent the person from acquiring shares in the capital, or from acquiring assets, of the body corporate in accordance with the authorisation; or

(d) in the case of an authorisation under paragraph (b)-section 50A does not, to the extent specified in the authorisation, apply in relation to the acquisition of that controlling interest."; and

(b) by omitting sub-section (16) and substituting the following sub-section:

"(16) A corporation that has made an application to the Commission for an authorisation, or a person other than a corporation who has made an application to the Commission for an authorisation under sub-section (9), may at any time, by notice in writing to the Commission, withdraw the application.".

Procedure for applications

Section 89 of the Principal Act is amended by inserting after paragraph (4) (aa) the following paragraph:

"(aaa) any document relating to-

(i) the revocation by the Commission of an authorisation; or

(ii) the substitution of an authorisation for an authorisation previously in force;".

Determination of applications for authorisations

(1) Section 90 of the Principal Act is amended by inserting in sub-section (9)

"or in respect of the acquisition of a controlling interest in a body corporate within the meaning of section 50A" after "body corporate".

(2) Section 90 of the Principal Act is amended by omitting sub-section (11) and substituting the following sub-section:

"(11) Subject to sub-sections (12), (13) and (15), if the Commission does not determine an application for an authorisation under sub-section 88 (9) within-

(a) 45 days from the day on which the application is received by the Commission; or

(b) if the Commission, before the end of that period of 45 days, gives to the applicant a notice in writing requesting the applicant to give to the Commission additional information relevant to the determination of the application-the period consisting of 45 days from the day on which the application is received by the Commission increased by the number of days in the period commencing on the day on which the notice is given to the applicant and ending on the day on which the applicant gives to the Commission such of the additional information as the applicant is able to provide, the Commission shall be deemed to have granted, at the end of that period, the authorisation applied for.".

(3) Sub-section 90 (11) of the Principal Act as amended by this Act applies only in respect of applications made to the Commission after the commencement of this sub-section.

Commission to afford opportunity for conference before determing application for authorisation

Section 90A of the Principal Act is amended by inserting in sub-section (1)

"(other than an application for an authorisation under sub-section 88 (9))" after "authorization".

Grant, revocation and variation of authorisations

Section 91 of the Principal Act is amended by inserting after sub-section (1) the following sub-section:

"(1A) An authorisation, other than an authorisation deemed to have been granted under sub-section 90 (10) or (11), comes into force on the day specified for the purpose in the authorisation, not being a day earlier than, and an authorisation deemed to have been granted under sub-section 90 (10) or (11) comes into force on-

(a) where paragraph (b) or (c) does not apply-the end of the period in which an application may be made to the Tribunal for a review of the determination by the Commission of the application for the authorisation;

(b) if such an application is made to the Tribunal and the application is not withdrawn-the day on which the Tribunal makes a determination on the review;

(c) if such an application is made to the Tribunal and the application is withdrawn-the day on which the application is withdrawn.".

Notification of exclusive dealing

Section 93 of the Principal Act is amended by omitting from paragraph (7) (b) "to have the effect" and substituting "to have the purpose, or to have or be likely to have the effect,".

Applications for review

(1) Section 101 of the Principal Act is amended by inserting after sub-section (1) the following sub-section:

"(1A) Where a person has, whether before or after the commencement of this sub-section, made an application under sub-section (1) for a review of a determination, the Tribunal may, if the Tribunal determines it to be appropriate, make a determination by consent of the applicant, the Commission, and all persons who have been permitted under sub-section 109 (2) to intervene in the proceedings for review, whether or not the Tribunal is satisfied of the matters referred to in sub-section 90 (6), (7), (8) or (9).".

(2) Section 101 of the Principal Act is amended-

(a) by inserting in sub-section (1) "or under sub-section (1B), as the case may be" after "regulations"; and

(b) by inserting before sub-section (2) the following sub-section:

"(1B) A presidential member may, on the application of a person concerned in an application for an authorisation under sub-section 88 (9), shorten the time allowed by or under the regulations within which an application under sub-section (1) may be made for a review of the determination by the Commission of the application for the authorisation if the member is satisfied that special circumstances exist and that in all the circumstances it would not be unfair to do so.".

Power to obtain information, documents and evidence

(1) Section 155 of the Principal Act is amended-

(a) by omitting from sub-sections (5) and (6) "Penalty: $1,000 or imprisonment for 3 months."; and

(b) by inserting after sub-section (6) the following sub-section:

"(6A) A person who contravenes sub-section (5) or (6) is guilty of an offence punishable on conviction-

(a) in the case of a person not being a body corporate-by a fine not exceeding $2,000 or imprisonment for 12 months; or

(b) in the case of a person being a body corporate-by a fine not exceeding $10,000.".

(2) Notwithstanding the amendments made by sub-section (1), the provisions of section 155 of the Principal Act continue to apply, after the commencement of this section, to and in relation to offences committed before that commencement as if those amendments had not been made.

The Second Reading speech by Attorney-General, Mr Lionel Bowen (19 March 1986) is reproduced below (Attribution: Parliament of Australia website):

[Hansard, Wednesday 19 March 1986, page 1624]

Mr LIONEL BOWEN (Attorney-General)(5.08) - I move:

That the Bill be now read a second time.

This Bill is to strengthen and improve the working of the Trade Practices Act 1974 in significant respects. It provides for the amendment of key provisions directed at restrictive trade practices in order to increase their effectiveness. It includes important new provisions to extend the protection afforded to consumers by the Act. The Bill also clarifies the intended meaning of a number of provisions and effects other changes for which experience with the legislation has shown a need. This Bill supersedes the Trade Practices Amendment Bill 1985 which will be withdrawn from the Senate. It differs from the earlier Bill principally in that proposed sub-section 50 (2c), relating to what are commonly called bare transfers of monopoly power, has been deleted.

It has become apparent that the Trade Practices Amendment Bill was likely to have been rejected by the Senate, notwithstanding that the majority of senators support virtually the whole Bill, because the Bill contained sub-section 50(2c). The Government is determined that the major reforms and improvements in this Bill should not be shelved or delayed as a bargaining chip in relation to the quite different question of government action concerning the current bid by Bell Resources Ltd for shares in Broken Hill Proprietary Co. Ltd. The Government will not abandon consumers and reputable, competitive businesses who need now the protection and assistance which this Bill provides. The Trade Practices Act is a most important piece of legislation for the regulation of business practices in Australia. It is now some nine years since the Act was last comprehensively reviewed and it is time to address a number of problems which have arisen.

The Government has demonstrated its sound economic management and its commitment to restoring the efficiency and vitality of Australian industry, with consequent benefits in increased employment opportunities and greater availability of reasonably priced commodities. The Trade Practices Act plays an important role in ensuring that the maximum benefits are obtained through an efficient allocation of our national resources, as well as protecting the interests of the consuming public and reputable businesses. The Government attaches great importance to ensuring that the Act is effectively and appropriately achieving its dual aims of promoting efficiency through competition, and thereby ensuring goods are provided to the consumer at the cheapest price, and providing consumers and business people with an appropriate measure of protection against unscrupulous traders.

This Bill together with its companion Bill, the Trade Practices (Transfer of Market Dominance) Amendment Bill, represent the outcome of a major review of both the competition and consumer protection provisions of the Trade Practices Act which was commenced immediately this Government came to office. The review, which was undertaken without preconceived notions or entrenched attitudes, led to the issuing in February 1984 of a Green Paper entitled `The Trade Practices Act: Proposals for Change'.

The shipping provisions in Part X of the Act, administered by my colleague the Minister for Transport (Mr Peter Morris), are the subject of a separate review and are not dealt with in this Bill. That review has resulted in the recent release of the Liner Shipping Report. The introduction to the Green Paper indicated that it was intended to be a catalyst for public discussion and debate about the Trade Practices Act. The Green Paper succeeded in fostering debate, and 120 submissions were received from a wide range of groups including large and small business groups, representatives of other special interest groups, trade unions, consumer organisations, academics and other individuals. The original proposals were substantially reviewed in the light of these comments. Further changes were made following consultations earlier this year with key interest groups including large and small business, consumers and the Australian Council of Trade Unions. The process of consultation was extensive and proved valuable. As a result of that process, a number of the provisions of the Bill differ in significant respects from the proposals which were put forward in the Green Paper. The Bill also contains some provisions, not foreshadowed in the Green Paper, to deal with specific problems that have come to light since that paper was published.

Proposals for recall of unsafe products were canvassed in a White Paper entitled `Recall of Unsafe Products` issued for public comment by the Office of Consumer Affairs in my Department in June 1985. The paper was the culmination of discussion over some years with industry and consumer groups on the options for an effective product recall system. The proposals in the Bill have been developed in the light of that process of consultation and of comments received on the White Paper.

As indicated in the Australian Labor Party platform, this Government is committed to the development of uniform consumer protection legislation throughout Australia. The Standing Committee of Consumer Affairs Ministers is actively pursuing this issue, and has created a special working party of officials. Together with the Green Paper, the Government released a list of amendments to the Act sought by the State and Territory governments to facilitate the achievement of uniformity by making the Act a suitable basis for mirror legislation elsewhere in the Commonwealth. Public comment was invited and extensive consultation with the State and Territory governments has taken place. Some of the amendments to Division 1 of Part V have been formulated specifically to make Division 1 a more suitable basis for mirror legislation. Several States have now indicated their willingness to enact legislation mirroring the majority of Division 1 of Part V and related provisions in Part VI of the Act as proposed to be amended.

I cannot overemphasise the importance of achieving uniform legislation in the consumer protection areas. Differences and conflicts between legislative provisions in force in the various jurisdictions can pose real problems for businesses and cause confusion on the part of consumers. By promoting uniform consumer protection legislation throughout the Commonwealth, it is expected that the costs of compliance for business, and ultimately the community, will be reduced. The Government will be actively encouraging those States which have not yet undertaken to enact mirror legislation to do so, and will be seeking to ensure that the uniformity is maintained in the future. Once the so-called mirror fair trading legislation is enacted, we will turn our attention to other areas of consumer protection law and will seek to promote uniformity in those areas also. The question of uniformity is not a major problem in relation to the competition provisions in Part IV of the Act since the States have not generally legislated in this area.

The Government, in its approach to business regulation, is committed to ensuring that unnecessary existing regulation is wound back, and adequate justification is put forward for new regulation. The Trade Practices Act lays down rules designed to preserve an environment in which the forces of competition can be effective and, at the same time, to protect consumers and reputable businesses from practices which are unfair. Beyond that, the Act does not seek to regulate the way in which firms carry on their businesses. Its aim is to enable businesses to make their own decisions in a free but fair market. Anti-competitive private regulation of business can be just as restrictive as, or even more inhibiting than, government regulation without being based on the same broad concern with public interest. In improving the effectiveness of the Trade Practices Act, we will ensure that anti-competitive private regulation of business is kept to a minimum, so that free and fair competition becomes the prime regulator for business.

Content of Bill

The more important features of the Bill, which I will now outline, represent significant advances in restrictive trade practice and consumer protection law. Mr Deputy Speaker, from here, the speech is the same as that which was delivered at the time of the introduction of the other Bill on 9 October last year, but it has to be read into Hansard.

Definition of 'consumer'

The definition of `consumer' in section 4b determines the types of transactions to which the conditions and warranties contained in Division 2 of Part V apply. The current definition, which involves a monetary limit of $15,000 on some transactions, was set in 1977. The real value of that monetary limit has been significantly eroded since that time. It is proposed to increase the monetary limit to $40,000 to restore the protection given by the Act to consumer and small business purchasers. Also, the Government sees a need to provide protection for truck owner-operators whose business is directly affected by the dependability of their vehicles. After consideration of the recommendation of the National Road Freight Industry Inquiry-the May report-section 4b is to be amended to provide to purchasers of commercial road vehicles the protection given to consumers under Division 2 of Part V of the Act.

Misuse of Market Power

A competitive economy requires an appropriate mix of efficient businesses, both large and small. Whilst large enterprises may frequently have advantages of economies of scale, there are many occasions when large size does not of itself mean greater efficiency. However, a large enterprise may be able to exercise enormous market power, either as buyer or seller, to the detriment of its competitors and the competitive process. Accordingly an effective provision controlling misuse of market power is most important to ensure that small businesses are given a measure of protection from the predatory actions of powerful competitors. Unfortunately, section 46 as presently drafted has proved of quite limited effectiveness in achieving that result, principally because the section applies only to monopolists or those with overwhelming market dominance. Even in those cases, it has been extremely difficult for a plaintiff to establish the requisite predatory purpose on the part of the defendant corporation.

The amendments proposed in clause 17 address these two problems and are designed to make section 46 much more effective. The test for the application of the section is to be reduced from that of a corporation being in a position substantially to control a market to a test of whether a corporation has a substantial degree of market power. As well as monopolists, section 46 will now apply to major participants in an oligopolistic market and in some cases, to a leading firm in a less concentrated market. The amendment will also make it clear that the court can infer the requisite predatory purpose from the conduct of the corporation or from the surrounding circumstances. Section 46 in its proposed form, which will be described as misuse of market power rather than monopolisation, is not aimed at size or at competitive behaviour as such of strong businesses. What is being aimed at is the misuse by a business of its market power. Examples of misuse of market power may include in certain circumstances, predatory pricing or refusal to supply.

Price Discrimination

I should mention that the Bill does not propose amendments to section 49, which deals with price discrimination. The Government has concluded that amendments of the kind which were canvassed in the Green Paper could have unintended and undesirable effects in particular leading to price rigidity. However, predatory price discrimination can be merely one manifestation of misuse of market power. The strengthening of section 46, and its more effective application to powerful buyers, will extend the potential application of that provision to predatory price discrimination.

Mergers

There has been much public debate recently about the level of merger activity in the Australian economy and the extent to which it should be regulated. Whilst the level of the debate has intensified recently following merger activity in the retail sector and in other markets, the public discussion was largely initiated by proposals in the Green Paper relating to section 50. Section 50 prohibits mergers which will result in a corporation being able to control or dominate a market, except where prior authorisation is obtained, on public benefit grounds, from the Trade Practices Commission. The Bill will close several loopholes which have come to light in section 50 in the last few years. The relevant provisions are directed to joint venture acquisitions and acquisitions by natural persons. Clause 19 inserts a new section 50A to deal with offshore mergers which affect a market in Australia.

The Government is firmly committed to the encouragement of efficient Australian industry and to increasing our competitiveness on world markets. It has been decided that the existing `dominance' test in section 50 should remain essentially unchanged. The coverage of section 50 will not be extended beyond those mergers which result in undue concentration in a market. The competitive conduct of firms which increase their market power as a result of other mergers will be subject to scrutiny under section 46 as proposed to be amended. At present the Act provides an opportunity for merger participants to seek authorisation from the Trade Practices Commission on public benefit grounds. Some business groups have claimed that the existing authorisation procedures are not adequate for dealing with industry restructuring. While the Government does not accept this view, this has resulted in reluctance to approach the Commission to ascertain its views on possible authorisation. The Commission has, however, made it clear that it regards desirable industry restructuring as a public benefit and has been prepared to authorise mergers for that purpose. In recognition of the reluctance and time constraints in merger cases, the Bill contains provisions designed to speed up considerably the authorisation process. In addition, the Bill widens the scope of directions which the Minister may give to the Commission pursuant to section 29. This will provide greater flexibility in relation to directions which can be given to the Commission in respect of particular issues to be taken into account or bodies to be consulted in authorisation cases. In this respect I am considering directing the Commission to consult the Industries Assistance Commission in such matters.

Other Changes in Competition Provisions

The Bill contains a number of other provisions which are of significance in relation to Part IV. By clause 51, the divestiture remedy in section 81 is being made more effective, particularly where the parties to the merger have conspired to breach section 50. To ensure Australia's international relations are not adversely affected, private proceedings which rely on the extraterritorial operation of the Act will require the Minister's consent. Provisions relating to the disclosure of financial interests by members of the Commission and the Tribunal are being brought into line with current practice. Also, it will now be made clear that the Court can grant consent injunctions and consent divestiture orders, and the Tribunal will be able to make consent determinations, without the need to have a full hearing of the matter.

Prohibition Against Unconscionable Conduct

The Green Paper proposed a prohibition on unconscionable conduct by corporations in relation to a contract or proposed contract. Following consultation with business, industry and consumer groups, the scope of this amendment has been refined and the proposed section 52a will now prohibit, on a civil basis, unconscionable conduct by corporations in relation to consumer-type transactions. Where a contravention is proved, remedies under section 87 will be available, and the Trade Practices Commission will enforce the section by seeking injunctions where appropriate. The section is directed at conduct which, while it may not be misleading or deceptive, is nevertheless clearly unfair or unreasonable. For example, a corporation which attempted to take advantage of a buyer's obvious lack of understanding of a transaction might fall foul of this section. The new provisions will supplement existing provisions of Part V and strengthen the protection afforded to consumers against unscrupulous trading practices.

Recall of Unsafe Products

The Act already contains provisions enabling bans to be placed on the supply of unsafe products. However, these provisions have no application to unsafe products supplied before a banning order is issued. There are at present no powers available to deal with the problem of unsafe products which have already reached the hands of consumers. The Government recognises that many industries have established voluntary procedures for the recall of unsafe products in the market-place, and it commends this responsible approach. However, to provide an adequate mechanism for remedial action across the range of potentially unsafe products, the Government considers it necessary to provide mandatory recall powers which can be used when necessary. Where no voluntary procedures exist, or the procedures are inadequate, these powers will be able to be exercised to ensure unsafe products are recalled from circulation or other remedial action is taken. Clause 35 proposes the inclusion in the Act of a new Division 1a in Part V. The new provisions, dealing with product safety and product information, represent a most important development in measures for the protection of consumers. The Division incorporates, with some amendments, the existing sections of the Act dealing with product safety and product information standards. It also includes new powers dealing with the mandatory recall of unsafe goods supplied after 1 July 1986 and notices to warn the public of goods that are under investigation.

I stress that the provisions for mandatory recall are designed to provide reserve powers which will be available for use where the safety of the public is threatened and the situation cannot be handled adequately by voluntary recall schemes or other means. In all cases, primary responsibility for ensuring the safety of consumer goods remains with manufacturers and importers. The Attorney-General will be relying on advice from his colleagues the Minister for Transport in relation to motor vehicles, and the Minister for Health in relation to pharmaceuticals, therapeutic goods and foodstuffs, who would undertake the appropriate consultative procedures within their areas of responsibility. Further, when the Government proposes to issue a mandatory recall order or banning order, there will ordinarily be an opportunity for suppliers of goods affected by the proposed order to seek a conference before the Trade Practices Commission before the order can be issued. In circumstances where there is an imminent risk of illness or serious injury the Attorney-General will be able to make an order without delay. In those cases which involve a declaration that the goods are unsafe, there will be an opportunity for a conference after the event to review the declaration. The review procedures will provide opportunity for full canvassing and testing of the issues consistent with quick action when necessary to protect the safety of the public.

Commission Action on Behalf of Consumers

Clause 55 provides for the amendment of section 87 to enable the Trade Practices Commission to obtain redress on behalf of particular named persons who have suffered loss or damage because of the conduct of a corporation or person in breach of the consumer protection provisions in Division 1 or 1a of Part V. One of the main obstacles preventing consumers from enforcing their rights under the Act is the high cost of litigation. By allowing the Commission to seek compensation on behalf of particular consumers in certain circumstances, consumers will more easily gain redress.

The amendment will be particularly useful where the Commission takes enforcement action in situations such as where a large number of consumers have each been defrauded of relatively small amounts, or where a small group of consumers have lost their savings as a result of a fraudulent representation.

This kind of proceeding will be a representative action rather than a so-called `class action'. The question of remedies for aggrieved consumers will only arise once the Commission has established a contravention of Part V in a prosecution or a proceeding for an injunction. The aggrieved consumers must be identified in the application and must have consented in writing to the Commission acting on their behalf. The Court is not empowered to make awards of damages to a class of persons, but only to particular named persons. The amount of the loss suffered by each individual by reason of the contravention will have to be established.

Other Amendments to Part V

The Bill also contains other amendments to strengthen the operation of Part V, and their enforcement under Part VI. I draw attention to amendments dealing with misleading representations about employment opportunities, to provide greater protection for unemployed people looking for work; and, with fraudulent claims for payment for unsolicited advertising, to ensure that small businesses have adequate protection against such claims. Further details of the amendments are given in the explanatory memorandum.

Financial Impact Statement

Generally speaking, this Bill will have only a minor impact on Government expenditure. This Bill does not involve additional staff or resources for the Trade Practices Commission. The only direct impact on Government expenditure concerns the administration of the reserve mandatory recall powers. This will require five staff in the Office of Consumer Affairs, to monitor industry product recall systems and advise the Attorney-General on the need to exercise the reserve powers when those systems are not adequate to arrange testing of allegedly unsafe goods, and to conduct advertising to notify the public of unsafe goods. The full year cost is estimated at $250,000. I expect that this Bill will enhance the protection offered by the Act to consumers and will promote fair business practices and competition, to the ultimate benefit of the whole community. Further, if, as expected, several of the State governments enact legislation mirroring the majority of Division 1 of Part V of the Act and repealing State legislation thereby rendered unnecessary, I expect that the costs for business and industry of complying with Government regulation in the consumer protection area will be reduced.

Conclusion

This Bill contains many important features aimed at promoting fair business practices and competition to the benefit of business interests and the broader community alike. In pursuing these objectives, the Government is demonstrating again its commitment to strong, efficient and internationally competitive Australian industry and to a fair market-place. I commend the Bill to the House, and present the explanatory memorandum to this Bill.

Debate (on motion by Mr Tim Fischer) adjourned.

Section 46

The Griffith Committee report notes that the lower threshold for s 46 introduced by the Act 'extensively strengthened the provision' (para 4.1.4), it being intended that s 46 would be 'applicable to the conduct of a wider range of corporations'; in particular, 'that it would no longer apply only to corporations in an absolute or near monopoly situation, but also to major firms in a market which had an oligopolistic structure and, in some cases, to a leading firm in a less concentrated market.'