Australia

• Pages: 609-646

609

Chapter XIX

AUSTRALIA

A. The Sources and Basics of Australian Antitrust Law

1. Basic Statutory Scheme

The Australian antitrust regime is contained in the Competition and

Consumer Act 2010 (CCA or Act). 1 Part IV of the CCA contains

prohibitions on a range of anticompetitive or restrictive trade practices.

The CCA covers a wide range of different conduct and arrangements

that may be considered to be anticompetitive. The prohibitions that are

particularly relevant to intellectual property licensing transactions are

discussed below.

2. Agreements That Restrict Competition

a. Prohibited Arrangements Between Competitors

Corporations are prohibited from making or giving effect to cartel

provisions and exclusionary provisions in contracts, arrangements or

understandings between competitors.

Cartel provisions are defined to include:

provisions that have the purpose or likely effect of fixing,

controlling or maintaining prices for goods or services;

provisions preventing, restricting or limiting the production

or likely production of goods, the capacity of parties to

supply services, or the supply or likely supply of goods or

services to other persons;

market sharing arrangements; and

bid rigging.2

Corporations that enter into or give effect to a prohibited cartel

provision may be subject to criminal and civil sanctions.3

1. Competition and Consumer Act 2010 (Cth) pt. IV (Austl.).

2. Id. § 44ZZRD.

3. Id. §§ 44ZZRF-44ZZRG, 44ZZRJ-44ZZRK.

610 Antitrust Issues in International IP Licensing Transactions

Entering into or giving effect to exclusionary provisions in contracts,

arrangements or understandings also are prohibited. An exclusionary

provision is defined as a provision of a contract, arrangement, or

understanding between persons, at least two of whom compete with each

other, which has the purpose of preventing, restricting, or limiting the

supply or the acquisition of goods or services to or from, particular

persons. 4 The prohibitions on exclusionary provisions are “per se”

prohibitions that typically will cover some horizontal market sharing

arrangements between competitors.5

Corporations that enter into or give effect to an exclusionary

provision are subject to civil sanctions.6

The prohibitions on cartel provisions and on exclusionary provisions

also may cover certain arrangements where firms carry on business at a

number of different levels (for example, manufacturer and wholesaler,

distributor and retailer).7 As a result, a manufacturer that reserves the

right to supply its products directly to some end-users risks violating this

prohibition if it seeks to impose a territorial or customer restriction on a

distributor.8

3. Arrangements That Substantially Lessen Competition

The CCA contains general provisions prohibiting entering into and

giving effect to contracts, arrangements, or understandings that contain

conditions that have the purpose, effect, or likely effect of substantially

lessening competition.9

4. Id. §§ 4D.

5. Id. §§ 4D, 45(2)(a)(i); News v. Austl. Rugby Football League Ltd. (1996)

64 F.C.R. 410.

6. CCA §§ 45(2)(a)(i), 45(2)(b)(i), 76, 80 (Austl.).

7. Visy Paper Pty Ltd. v. Austl. Competition & Consumer Comm’n (2004)

216 C.L.R. 1.

8. Where such conduct falls within the exclusive dealing prohibition in

section 47, it will be dealt with under that section and not section 4D/45.

See id.

9. CCA §§ 45(2)(a)(ii), (b)(ii).

Australia 611

4. Unilateral Misuse of Market Power

Under section 46 of the CCA, companies with a substantial degree of

market power10 are prohibited from taking advantage of that market

power for the purpose of eliminating or substantially damaging a

competitor, preventing entry of a person into that or any other market, or

deterring or preventing a person from engaging in competitive conduct in

that or any other market. 11 This is roughly the equivalent of the

prohibitions on dominance and monopolization in the European Union

and the United States.12 The section recently has been expanded to

prohibit sustained below-cost pricing for specified purposes.13

5. Other Provisions

a. Resale Price Maintenance

Corporations are prohibited by the CCA from engaging in minimum

resale price maintenance.14 The practice of resale price maintenance is

defined to involve:

communicating to a second person that they will not supply

goods to the second person unless the second person agrees

not to sell those goods at a price less than the price specified

by the supplier;

inducing or attempting to induce a second person not to sell

the supplier’s goods at a price less than a price specified by

the supplier;

entering or offering to enter into an agreement that the

second person will not sell the goods at a price less than a

price specified, or that would be specified by the supplier;

withholding supply because the second person has not

agreed not to sell the goods at a price less than the price

specified by the supplier, or the second person has sold or is

10. The Australian Courts have held that a company possesses a substantial

degree of power in a market if it is free from constraint from the conduct

of competitors or customers. Boral Besser Masonry Ltd. v. Austl.

Competition & Consumer Comm’n (2003) 195 A.L.R. 609.

11. CCA § 46.

12. See Treaty on the Functioning of the European Union, art. 102, Sept. 5,

2008, 2008 O.J. (C115) 47; 15 U.S.C. § 2.

13. CCA §§ 46(1AA), 46 (1AAA).

14. Id. § 48.