The ICCC Act prohibits behavior that restricts trade or substantially lessens competition in the market. It is illegal to engage in business conduct, behavior, or practices that have, or, are likely to have the effect of substantially lessening competition in a market. The ICCC Act refers to the prohibitions as Market Conduct Rules (MCR).

There is no precise definition of a substantial lessening of competition (SLC). In practice, it will depend on the circumstances in the market. It includes a reference that defines the consequences or unacceptable competitive behavior prohibited by the ICCC Act.

There are also a range of other exceptions under the ICCC Act.  Included in these exceptions are, for example, an exception for acts or things specifically authorized by other legislation; intellectual property agreements; and employment agreements.

Cartel is a form of anti-competitive behavior where competing businesses collude to coordinate their actions in a way that restricts competition between themselves in the market. Cartels typically involve agreements between competitors to fix prices, allocate markets, limit production or supply, and rig bids. Such collusive practices harm consumers by creating an artificial environment where prices are higher, choices are limited, and fair competition is stifled.

Certain business behaviors that can raise cartel concerns are as follows:

The prohibition of this anti-competitive market behavior may apply in a case where a person or business has a substantial degree of power in a market. They are prohibited from taking advantage of that power for anti-competitive purposes which are to restrict the entry of a competitor, to prevent or deter someone from engaging in competitive conduct, or to eliminate a competitor- in that market or another market. Examples of abuse of market power conduct may include but are not limited to margin or price squeeze, refusal to deal, predatory conduct, and discriminatory conduct, amongst others. 

Resale price maintenance (RPM) is the practice of a supplier requiring its resellers not to sell its products below a certain price as set by the supplier. Thus, a manufacturer or supplier cannot insist that its retailers do not sell the manufacturer’s products for less than a certain price. RPM would also apply where a manufacturer threatens to withdraw supply to a reseller who was discounting the manufacturer’s products while others were not.

In the context of MCR, exemptions refer to specific situations or categories of conduct that are excluded from the application of certain regulatory requirements or prohibitions. These exemptions are typically granted to recognize that certain activities or participants may not pose significant risks to the market or consumers, or that applying the rules in certain circumstances could be overly burdensome or counterproductive.

Exemptions for market conduct rules include:

Part VI of the ICCC Act empowers the ICCC to grant authorizations for certain business practices and arrangements based on public benefit grounds. Otherwise, such practices and arrangements are considered anti-competitive.

The purpose of authorizing restrictive trade practices under Section 76 is to exempt proposed conduct that would otherwise breach the MCR. These exemptions are granted when the conduct is deemed to generate sufficient public benefits despite potentially having some anti-competitive effects.

The Authorization here does not apply to price fixing and taking advantage of substantial market power.

Before filing an Authorization application, businesses are strongly encouraged to seek guidance from the ICCC on an informal basis. This should be done as soon as there is a genuine possibility that a potential anti-competitive arrangement would be entered into; well in advance of the completion of the acquisition.

By obtaining formal approval from the ICCC, parties involved in an arrangement can proceed with their plans confidently, without risking a contravention of the ICCC Act. This is legal and certainly allows businesses to operate within the bounds of the law while enjoying the benefits of the authorized arrangement.

Whilst there is no timeframe for a determination of such an application, the ICCC ensures to expedite the assessment and determination.  

Please refer to the Public Register to access information on previous decisions and applications currently progressing.