Section 2
Object of this Act

Inserted by Competition Policy Reform Act 1995 (Act 88 of 1995)

Section 3. After section 1 of the Principal Act the following section is inserted:

Object of this Act
"2. The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.".

Air New Zealand Ltd v Australian Competition and Consumer Commission [2017] HCA 21
(cartel conduct)

Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd and Ors [2007] HCA 38

The introduction of the 'object' provision followed the Hilmer Report in 1993. The Committee discussed the purpose of competiton policy extensively. Its comments included the following:

[page 26] 'In broad terms, competitive conduct rules could have two possible objectives. First, they could be designed to protect the competitive process per se. In such a regime, the effective functioning of the competitive process, and hence economic efficiency and the welfare of the community as a whole, is the primary objective. Consumers and competitors benefit from such rules to the extent that their interests coincide with the interests of the community as a whole.

Secondly, such rules might be cast so as to confer special benefits on a particular sector of the community, whether that be consumers or a particular class of competitors, such as small businesses. Under a regime of this kind, the benefits to the community as a whole are subordinated to the interests of a particular category of beneficiaries.

The Committee unhesitatingly embraces the objective of protecting the competitive process as that most appropriate for the competitive conduct rules of a national competition policy. The rules themselves should not be aimed at favouring particular sectors of society. If such objectives are to be achieved it should be through accommodations to the rules according to the principles and exemption mechanisms discussed in Chapters Five and Six. To the extent that protecting the competitive process does not promote economic efficiency in a particular market, or where other policy goals conflict with economic efficiency and require some trade-off to be made, exemptions from the general rules should also be granted through those exemption mechanisms, such as authorisation.' [emphasis added]

[page 79-80] 'The Committee does not consider that competition policy should be distorted to provide special protection to any interest group, including small business, particularly where this is potentially to the detriment of the welfare of the community as a whole.'

The Explanatory Memorandum to the Competition Policy and Reform Act does not explain the reason for its insertion.

In Air New Zealand Ltd v Australian Competition and Consumer Commission [2017] HCA 21 Justice Gordon observed [footnotes omitted]:

[68] The statutorily defined object of the TPA is “to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection”. In other words, the purpose of the TPA is “to promote competition, not to protect the private interests of particular persons or corporations”. It is the “flow-on result that is the key — the effect on consumers, not the effect on other competitors”.

[69] Part IV of the TPA broadly manifests legislative concern with injury to competition by practices apt to keep up prices. And, accordingly, Pt IV of the TPA proscribes various practices in respect of pricing which merit the label “restrictive” in the heading for Pt IV.

In Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd and Ors [2007] HCA 38 (in which the High Court dealt with an application for derivative Crown immunity) Chief Justice Gleeson and Justices Gummow, Hayne, Heydon and Crennan observed:

[15] Section 2 of the Act declares that the object of the Act, relevantly, is to enhance the welfare of Australians through the promotion of competition and fair trading. It was inserted in 1995, but it is plain from the detailed language of the key provisions that the object of the Act was the same before 1995, and would have been the same after 1995 even if s 2 had not been inserted.

[48] Section 2 of the Act states the object as enhancing the welfare of Australians through the promotion of competition and fair trading. Identifying the operation of the Act as a benefit or a burden for government agencies, even in a particular instance, may not be straightforward. Plainly, in the case of procurement of supplies through the tender process, the anti-competitive practice of collusive tendering often would harm directly the interests of the procuring agency. That would be a form of conduct in relation to the Crown in right of a State, but it seems improbable in the extreme, at least since 1995, that the Act was not intended to apply to such conduct.

[64] ... it would be wrong to conclude that ss 46 and 47 had no application to any conduct of the first respondent in relation to its dealings with the second, third and fourth respondents. The first respondent was a trading corporation. A conclusion that, in carrying on dealings with a government in the course of its own business, it enjoyed a general immunity not available to the government when the government was carrying on business itself would be remarkable. Such a conclusion would be impossible to reconcile with the object of the Act as now declared in s 2. Furthermore, such a conclusion would go far beyond what is necessary to protect the legal rights of governments, or to prevent a divesting of proprietary, contractual and other legal rights and interests. As a result of changes to the Act since Bradken, State and Territory governments no longer enjoy any general immunity from the Act. Acting under s 51(1), State and Territory Parliaments may legislate to protect governmental interests, but the legislative emphasis on the specificity with which they must do that (increased since Bradken) draws attention to the importance attached to the pursuit of the object declared in s 2.

In a separate judgment in that case, Justice Kirby observed [footnotes ommitted]:

[137] Upholding the Act's purposes: Pending the enlightenment, and approaching this appeal within the constraints, assumptions and concessions accepted by the parties, I am brought ultimately to the same conclusions as are stated in the joint reasons. Those conclusions accord more closely with my own approach, in many cases, to questions (uncomplicated by issues of governmental immunity) concerning the ambit and application of the Act, so as to fulfil the large national objects declared in s 2. The conclusions also conform more closely with the course of statutory amendments designed to strengthen the operation of the Act. ...

[138] ... there is in the joint reasons what I regard as appropriate attention to the large national, economic and protective purposes of the Act. As this purposive approach to the application of the Act has been a repeated theme of my minority reasons in earlier cases on the Act, I will encourage the new dawn. Now that it has at last emerged, I endorse it and hope that it will survive to future cases involving the Act.

[139] By reference to the object of the Act, as inserted in 1995 to reflect inter-governmental agreements in Australia concerning competition policy and its importance for the whole nation, I accept the observations of Mr Wright:

The parliaments of the Commonwealth, states and territories have determined that promoting competition is in the interests of all Australians because it enhances their welfare. It is difficult, therefore, to conclude that the legislatures intended that non-government parties should be able to reach anti-competitive arrangements with the Crown (when not carrying on a business) or engage in anti-competitive conduct involving the Crown (when not carrying on a business) with impunity or that arrangements of this type should be enforceable. Such an approach could potentially frustrate the achievement of the object of the Act in all markets in which the government (when not carrying on a business) is a significant participant.

In Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] FCA 336 Justice Goldberg observed

[17] The agreement with Baker Bros that SIP, through Mr Ippaso, procured, and to which Mr Ippaso was a party, was calculated and intended deliberately to ensure the elimination of competitive conduct insofar as it existed between Baker Bros and SIP. Such elimination is precisely the vice to which PtIV of the Act in particular is directed. S2 of the Act provides that the object of the Act is:

"to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection."

The object of the agreement promoted, procured and implemented by SIP through Mr Ippaso was the elimination of such competition as between SIP and Baker Bros.

In Stirling Harbour Services Pty Ltd (ACN 008 767 600) v Bunbury Port Authority [2000] FCA 1381 Justices Burchett and Hely stated:

[11] Amongst the objectives sought to be achieved by TPA is the promotion of competition (TPA s2) as a means to protect the interests of consumers: Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1989) 167 CLR 177, 191. The objective is to protect and promote the competitive process; not individual competitors: Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 410, 442.

Alexandra Merrett, Rhonda Smith and Rachel Trindade, 'The consumer is king! (Out of sight, out of mind)', State of Competition (Issue 10 (Feb 2013))