Government to amend Trade Practices Act: small business protection

The Treasurer has announced that the Government intends to introduce the Trade Practices Legislation Amendment Bill
(No. 1) 2007 (the Bill) to amend section 51AC and section 46 of the Trade Practices Act 1974 (the Act) on 20 June 2007.

The Bill will improve protection for small business from unconscionable
conduct and from the misuse of market power, such as predatory pricing.

The Bill substantially implements the Government’s response to the
March 2004 Senate Economics References Committee (SERC) report on The effectiveness of the Trade Practices Act 1974 in protecting small business.

Based on the discussions with small business, the Government will change its legislation, to provide that:

  • for the purposes of section 46, more than one corporation can have a substantial degree of power in a market;
  • a corporation can have a substantial degree of market power even though it does not substantially control a market;
  • a corporation can have a substantial degree of market power in a market
    even though it does not have absolute freedom from constraint in that
    market by the conduct of its competitors or persons to or from whom the
    corporation supplies or acquires goods or services; and
  • in regard to below-cost or predatory pricing, the Court may have regard
    to any conduct that consisted of supplying goods or services for a
    sustained period at a price that was less than the relevant cost to the
    corporation of supplying such goods or services, and the reasons for
    that conduct.

An earlier proposal to insert
reference to a reasonable prospect or expectation of being able to
recover losses incurred by below‑cost pricing as a factor in section 46
will not be pursued, in light of concerns that it may limit the ability
of the court to find breaches of section 46 in cases of predatory

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