Last week, the Parliament passed amendments to section 46 of the Competition and Consumer Act 2010 (CCA), which prohibits the misuse of market power.

The amendments strengthen section 46 in a number of ways, most importantly by removing the ‘take advantage’ test and extending it so that it focuses on “purpose and effect or likely effect of substantially lessening competition”. This has sometimes also been referred to as “the effects test”.

The new section will make it illegal for a business with substantial market power to engage in conduct that has the purpose, effect or likely effect of substantially lessening competition in the market in which it has substantial market power or in markets in which it or related businesses supply or are likely to supply or acquire goods or services.

The changes are not yet in force and the Government has not yet announced a date for them to commence. The Treasurer has announced that he will wait for other legislative reforms to the CCA to be enacted by Parliament before announcing a date for those amendments and the amendments to section 46 to commence.

Here is a link to the bill that has passed both houses of Parliament.

We’re preparing to publish guidelines about the amended section 46. They’ll outline the way we intend to investigate conduct under the amended law. We’ll distribute these guidelines to you once they are available.

Kind regards
ACCC Small Business Team