Competition and consumer law

Competition law

Part IV of the Competition and Consumer Act prohibits the following anti-competitive practices:

• cartel conduct;
• concerted practices and arrangements which substantially lessen competition;
• misuse of market power;
• anti-competitive exclusive dealing;
• resale price maintenance; and
• mergers or acquisitions that are likely to substantially lessen competition in a market for goods or services in Australia.

Cartel conduct

Cartel conduct involves contracts, arrangements, or understandings between competitors that have:

• the purpose or effect of fixing, controlling or maintaining the price of goods or services; or
• the purpose of
  • restricting output (production and supply);
  • allocating customers, suppliers, or territories; or
  • bid-rigging.

There are limited statutory exceptions to the prohibition against cartel conduct in relation to:

• certain restrictions on supply or acquisition;
• joint ventures;
• collective bargaining arrangements duly notified to the Australian Competition & Consumer Commission (ACCC);
• collective acquisition or joint advertising of goods;
• cartel provisions authorised by the ACCC; and
• arrangements between related bodies corporate.

Cartel conduct may be prosecuted as either a civil or criminal offence. Individuals can face criminal penalties of up to 10 years imprisonment or fines of up to $660,000 and be banned from being a company director or company manager for life. Individuals can face civil penalties of up to A$2,500,000. Corporations are subject to a maximum penalty of the greater of A$100 million, three times the value of the benefit gained, or, if the gain cannot be ascertained, 30% of annual group turnover.

Misuse of market power

Section 46 of the Competition and Consumer Act prohibits misuse of market power. It prohibits any corporation with a substantial degree of power in a market in Australia from engaging in conduct which has the purpose or is likely to have the effect of substantially lessening competition in that market or in any other market in which the corporation supplies or acquires goods or services. The mere acquisition or possession of substantial market power does not violate s.46. However, once market power is acquired, the corporation must avoid conduct which has the proscribed purpose or effect.

Merger clearance

A mandatory merger review regime operates in Australia.

Please refer to Section 5 (‘Competition Law’) of this Guide for information on the requirements for parties to obtain ACCC approval before completing an acquisition that meets the specified thresholds.

Consumer law

Anyone offering to supply goods or services to end users in Australia will be affected by federal, state and territory laws, regulations, and codes which provide rights and protections for consumers.

The key legislation is the Australian Consumer Law (ACL) which is which is in Schedule 2 of the Competition and Consumer Act. The ACL contains various protections including:

• a general prohibition on misleading or deceptive conduct in trade or commerce;
• specific prohibitions on false or misleading representations in relation to the supply of goods or services or interests in land;
• prohibition on engaging in unconscionable conduct;
• consumer guarantees which apply to supplies of goods or services to a consumer;
• a prohibition on “unfair” terms in standard form small business and consumer contracts; and
• actions against manufacturers in respect of unsafe goods.

The Australian Government has also proposed laws prohibiting certain unfair trading conduct, which are anticipated to come into effect on 1 July 2027.

The ACL provides a set of consumer protection laws which apply both nationally and, in each state, and territory, and which apply to anyone engaged in business conduct (corporations, partnerships, associations, individuals) that involve or may affect consumers.

The ACL does not apply to conduct in relation to financial products and services. The Australian Securities & Investments Commission Act 2001 (Cth) contains consumer protection provisions that apply in respect of the supply of financial services - many of which mirror or are similar to the provisions set out in the ACL.

As well as the ACL, consumer protection regulation in Australia includes:

• mandatory codes of conduct (which are given force of law under various Acts and regulations); and
• voluntary codes of conduct (which are generally administered through industry-based bodies and associations).

Enforcement of the Competition and Consumer Act

The ACCC is responsible for enforcing the civil penalty provisions of the Competition and Consumer Act, although a variety of other agencies and institutions play roles as well. The Commonwealth Director of Public Prosecutions is responsible for the prosecution of criminal violations under the Competition and Consumer Act.

For consumer law, the ACCC and the various state and territory consumer protection agencies share the administration and enforcement of the ACL.

These agencies have broad powers to investigate breaches of the ACL and to bring proceedings in relation to such breaches, including on behalf of consumers. The ACCC, in particular, is very active in enforcing the Competition and Consumer Act and regularly obtains significant penalties in Court for contraventions of these laws.

Other government bodies and agencies also have responsibility for administration of consumer protection regulation. For example:

• the Australian Securities & Investments Commission is responsible for the administration of regulation governing financial products and services, including consumer credit; and
• the Australian Communications and Media Authority is responsible for the administration of regulation governing certain telecommunications products and services.