Competition and Consumer Act Part IV: cartels, misuse of market power, and anti-competitive conduct

What Part IV prohibits

Part IV of the Competition and Consumer Act 2010 establishes the federal anti-competitive conduct provisions, overseen by the Australian Competition and Consumer Commission (ACCC). This section of the Act focuses on behaviours that restrict competition within the Australian market.

The Act specifically prohibits cartel conduct, encompassing activities such as price fixing, output restriction, market sharing, and bid rigging, when undertaken between competitors. These actions are considered unlawful regardless of their specific impact. Beyond cartels, Part IV also prohibits anti-competitive contracts, arrangements and understandings, which are unlawful if they substantially lessen competition, either as their intended purpose, their actual effect, or their likely effect.

Further prohibitions extend to actions involving substantial market power. Corporations possessing such power are restricted from engaging in conduct that has the purpose, effect or likely effect of substantially lessening competition. This includes specific practices like exclusive dealing, resale price maintenance, and anti-competitive mergers.

Cartels — civil + criminal

Cartel conduct represents a serious breach of the Competition and Consumer Act and is subject to both civil and criminal sanctions. The criminal offences relating to cartel activity were formally incorporated into the Competition and Consumer Act in 2009.

Corporations engaging in cartel conduct face substantial penalties. The maximum corporate penalty is the greater of $50 million, three times the value of the benefit obtained from the conduct, or 30% of the corporation's adjusted turnover during the period the conduct occurred. Individuals found to have participated in criminal cartel activity may face a maximum penalty of 10 years imprisonment and a fine of up to $750,000 per offence. penalty estimator

The Australian Competition and Consumer Commission (ACCC) offers a pathway for potential participants in cartel activity to avoid prosecution. Cartel immunity is available under the ACCC's Immunity and Cooperation Policy, but it is only granted to the first cartel participant to come forward and satisfy particular conditions.

Defences and exemptions

Part IV contains mechanisms that allow conduct which might otherwise be considered anti-competitive. Joint ventures can be exempt from the prohibition on cartel conduct if they meet specific conditions.

The Australian Competition and Consumer Commission (ACCC) can grant authorisation, permitting businesses to engage in conduct that would otherwise contravene Part IV. This occurs when the ACCC determines that the public benefit resulting from the conduct outweighs any anti-competitive detriment.

Certain exclusive dealing and resale price maintenance arrangements are subject to notification regimes. These regimes allow businesses to seek guidance from the ACCC before engaging in the conduct, and may provide protection from legal action if the conduct proceeds following notification.

Enforcement focus

The Australian Competition and Consumer Commission (ACCC) actively enforces Part IV of the Competition and Consumer Act. The ACCC has previously taken action against conduct including price-fixing, observed in industries such as shipping, freight and building materials. Similarly, investigations have addressed concerns relating to misuse of market power, particularly within the supermarkets, banking and platform sectors.

Detection of cartel activity remains a key priority for the ACCC. This includes supporting the cartel immunity program and engaging in international cooperation to identify and address anti-competitive behaviour. These efforts aim to ensure a competitive market environment.

Individuals and businesses experiencing loss or damage as a result of Part IV contraventions also have recourse through private litigation. They may pursue legal action to seek damages and injunctions.