Someone recently bought our

students are currently browsing our notes.

X

Authorisations Notes

Law Notes > Competition Law Notes

This is an extract of our Authorisations document, which we sell as part of our Competition Law Notes collection written by the top tier of University Of New South Wales students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Competition Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Authorisations

*

*

Authorisations are not available for misuse of market power. If you try to get an authorisation you have alerted the ACCC to your conduct. If you are already engaging in the conduct, you cannot get immunity for it. The ACCC

The Power to grant an authorisation

S 88

* Provides for the granting of authorisations by the ACCC for conduct that would otherwise contravene one or more of the substantive prohibitions in Part IV (restrictive trade practices).

* (8) allows the ACCC to grant an authorisation for exclusive dealing under s 47.

* (8A) is for an authorisation for RPM under s 48.

* (9) is for an authorisation by the ACCC in relation to s 50A.

* For mergers, this power is given directly to the Tribunal. S 89

* You must apply to the ACCC to revoke or make a minor alteration to the authorisation. A record of all authorisations, including those that have been withdrawn must be on the public register. S 90

* The ACCC can dismiss or accept the authorisation in writing. It shall state its' reason.

The tests to be applied

*

*

There are two different tests to be applied by the ACCC and the Tribunal in deciding whether to grant or refuse an application for authorisation. Neither test requires consideration of whether there are less restrictive alternatives for achieving the claimed public benefits. 1) The public benefit outweighs the anti-competitive detrimentThe ACCC must be satisfied that the conduct will result in a benefit to the public and that that benefit would outweigh the detriment to the public constituted by any lessening of competition associated with the conduct.It is the test for exclusive dealing (other than third line forcing) = section 90(6).

* Also cartels (sections 90(5A) and (5B)) and anti-competitive agreements (sections 90(7)).

* This test is for the SLC provisions but now applies to cartels too. 2) The public benefit is such that the conduct should be allowedThe ACCC must be satisfied that the conduct would result in such a benefit to the public that it should be allowed to be made.It is the test for third line forcing (section 90(8)(a)(iii)), resale price maintenance (section 90(8)(a)(iv)) and mergers (section 95AZH(2)).

* Also exclusionary provisions.

* This test is for the per se offences.

The onus

*

The imposing the restrictions on consumer welfare bear the onus of proving on the balance of probabilities that they are in the public interest.

Time limits and fees for authorisation applications

*

*

There is a time limit of 6 months for the consideration of non-merger authorisations by the ACCC. It may be extended by a further 6 months or if there is a pre-decision conference. The fee is $7500 for non merger applications.

*

*

The ACCC can waive, in whole or part the fee payable for filing non-merger applications for authorisation (a request must be made in writing). If the ACCC waives the fee, the company still has to pay $2,500. ACCC Guide to Authorisation (Dec 2010) states that the fee will be waived if the fee would 'impose an unduly onerous burden on the applicant.' For merger applications the fee is $25,000!! Tribunal must make its' decision in three months, but can extend the time by another three months. If Tribunal fails to make decision it is assumed that the merger may not go ahead. The ACCC is required to make a report to held the Tribunal in its' decision (and may include any matters it considers relevant).

Test one

Re John Dee (Export) Pty Ltd (1989)

* The onus is on the parties seeking authorisation to satisfy the ACCC or Tribunal that there is a benefit to the public enough to outweigh the likely anti-competitive detriment.

* Second, the Tribunal must consider the likely shape of the future both with and without the conduct in question.

* Third, the task will involve an understanding of the functioning of the relevant markets with and without the conduct for which the authorisation is sought (i.e. a future with and without test).

Test two

*

*

*

The ACCC and then Tribunal on appeal (unless it is a merger) will look only at whether or not the conduct is likely to result in such a benefit to the public that it should be allowed to take place. For mergers there are certain likely outcomes deemed to constitute public benefits for the purpose of the Tribunal's assessment. Under s 95AZH(2), a significant increase in the real value of exports; and a significant substitution of domestic products for imported goods; and all other relevant matters that relate to the international competitiveness of any Australian industry MUST be regarded as benefits to the public. This test can consider a wider range of public detriments (as the detriment does not need to result from a SLC). o The first test requires a balancing exercise, necessitating a consideration of the extent to which competition is likely to be lessened by the conduct. The second test doesn't require that the public benefit be balanced against anti-competitive detriment; although in almost all cases it is unlikely the public benefit will be such as to allow the conduct where it does not outweigh the anti-competitive detriment.

Procedure for granting an authorisation and review by the tribunal

ACCC Guide to Authorisation (December 2010)

* Authorisation is a process under which the ACCC, in response to an application, can grant immunity on public benefit grounds against action under the CCA.

* The ACCC cannot authorise the conduct retrospectively.

* The ACCC is often asked to authorise collective bargaining arrangements where two or more competitors come together to negotiate terms and conditions with a supplier or a customer.

* Overview: the process involves the ACCC: 1) Inviting interested parties to lodge written submissions commenting on the application and supporting submission. 2) Meeting with the applicant and interested parties as appropriate. 3) Inviting the applicant to lodge a written submission in response to interested party submissions. 4) Conducting its own market inquiries and research while consulting with interested parties. 5) Issuing a draft determination.

*

6) Inviting written submissions in response to the draft determination and inviting the applicant or interested parties to call a conference to make oral submissions to the commissioner. 7) Holding a conference, if one is called. 8) Issuing a final determination. The same test in practice: Simply because the test is lessening of competition does not mean that other detriments are not weighed in the balance when a judgment is being made - something relied on as a benefit may also have a detrimental effect on society. Thus the ACCC can also take into account all public detriments likely to result from the relevant conduct into account either by looking at the detriment side of the equation or assessing the extent of the benefits.

What are public benefits and public detriments?

Re 7Eleven (1994)

* A big public benefits case where 7-Eleven managed to argue successfully that there was a

*

*

*

change of circumstances and that the newspapers should not have authorisation to exclusively deal with the newsagents. This allowed 7-Eleven to purchase its newspapers at a more competitive cost. This had been going on for 20 years.

Public benefit (not defined in the Act) but it has been defined to be: anything of value to the community generally, any contribution to the aims pursued by the society including as one of its' principle elements the achievement of the economic goals of efficiency and progress. This must be judged from the perspective of society as a whole; the best use of society's resources. Efficiency usually encompasses progress and allocative efficiency, production efficiency and dynamic efficiency. A broad view is taken of 'benefit' found in VFT Chicken Meat Growers and includes anything that increases the well being of members of society. Public detriment (not defined in the Act) but the Tribunal found it to mean any impairment to the community generally, any harm or damage to the aims pursued by the society including as one of its principal elements, the achievement of the goal of economic efficiency. Public benefit standard:

VFF Chicken Meat Growers

* The Tribunal said that the 'public' includes all members of society in all their roles as investors, shareholders, workers and consumers and people incidentally affected by market outcomes.

* There should be no difference in the weight attached to the benefits irrespective of who are the beneficiaries. Qantas Airways

* The Tribunal found that whether a benefit is a public benefit should be directed towards the extent to which the benefit has an impact on members of the community - does it fall into the category of 'anything of value to the community generally?'

* Cost savings arising from increases in productive efficiency constitute public benefits, as the community at large has an interest in these resource savings. It is a form of 'total welfare standard.'

* While the benefit of an arrangement or merger does not necessarily need to be passed on to consumers it may be in some cases that gains flow through to only a limited number of members in the community and this will carry less weight.

* What weight is given to the benefit will be decided with regard to its nature, characterisation and the identity of the beneficiaries of it.

Buy the full version of these notes or essay plans and more in our Competition Law Notes.