Authorisation and notification

Overview

Conduct that would otherwise contravene the Act may be authorised or notified in advance on public benefit grounds or may be protected by a class exemption

Parties wishing to engage in conduct that may infringe the competition law provisions of the Act may seek advanced authorisation on an individual basis. The ACCC may authorise the conduct on competition and/or public benefit grounds (depending on the conduct) and, while authorised, that conduct will not contravene the Act. The party seeking authorisation bares the onus of proving the conduct satisfies the authorisation criteria.

In the case of exclusive dealing, resale price maintenance and small business collective bargaining, parties may instead 'notify' the conduct to the ACCC. This prevents the conduct contravening the Act unless the ACCC revokes the authorisation on competition/public benefit grounds. In the case of notification it is the ACCC that must be satisfied the conduct does not meet the competition/public benefit criteria.

Since November 2017 the ACCC has also been given the power to create class exemptions for particular types of conduct.

Authorisation

Overview

Parties wishing to engage in conduct that may infringe the competition law provisions of the Act may seek advanced authorisation on an individual basis.

The ACCC may authorise the conduct on competition and/or public benefit grounds (depending on the conduct) and, while authorised, that conduct will not contravene the Act (section 90). The party seeking authorisation bares the onus of proving the conduct satisfies the authorisation criteria.

A party dissatisfied with the ACCC's authorisation determination may apply to the Tribunal for a review of the determination (section 101).

Until November 2017 separate applications needed to be made for different forms of conduct that might contravene multiple provisions. Different tests also applied to different provisions. The 2017 Harper Reforms simplified this process so that there are now only two tests that apply, with the different depending on whether the conduct is prohibited 'per se' or is subject to a competiton test.

The Harper Reforms also extended the conduct to apply to misuse of market power (previously not capable of being authorised directly). Merger authorisations, previously dealt with separately, are now considered under the same substantive test as other authorisations.

Authorisation (for conduct prohibited with a competition-test)

The ACCC may authorise conduct prohibited by way of a competition test if either (section 90(7)):

the conduct would not substantially lessen competition; or
the conduct would result in a public benefit likely to outweigh the detriment that would be likely to result from the conduct

The forms of conduct that may be authorised in this way include:

anti-competitive agreements (s 45)
misuse of market power (s 46)
exclusive dealing (s 47)
mergers (s 50)

Authorisation (for conduct prohibited per se)

For conduct that otherwise constitutes a per se contravention, the first limb of the authorisation test does not apply (section 90(8)). As a result, authorisation for

cartels
secondary boycotts and
resale price maintenance

require demonstration that the conduct would produce a net public benefit.

Guidelines for non-merger authorisation

In August 2018 the ACCC published Guidelines for non-merger authorisation:

See ACCC Guidelines for non-merger authorisation (30 August 2018)

Class exemptions

The ACCC has been given powers to create ‘class exemptions’ for particular types of conduct. Class exemptions can be granted where conduct of that ‘kind’ would not have the likely effect of substantially lessening competition or would result in a public benefit likely to outweigh the detriment that would be likely to result from the conduct.

The ability to provide class exemptions followed recommendations made in the Harper Report (2015) the ACCC has been given power to create class exemptions for particular types of conduct. No such exemptions have yet been granted, but see 'ACCC considering collective bargaining exemption'.

Determining a class exemption

Section 95AA provides that the ACCC may determine (by legislative instrument) that one or more of the competition provisions do not apply to a particular kind of conduct, provided the ACCC is satisfied that:

conduct of that kind would not have, or be likely to have, the effect of substantially lessening competition; or
conduct of that kind would result, or be likely to result, in a public benefit that would outweigh the detriment likely to result from the conduct

The ACCC may apply various limitations to the exemption.

The determination must also specify its period of operation and cannot run for more than 10 years from the date made.

Withdrawing the benefit of a class exemption

The ACCC may give a person written notice if a class exemption determination applies to them but the ACCC is satisfied that the conduct engaged in by that person would be likely to substantially lessen competition and would not result in a net public benefit. The ACCC must give reasons for such notice and while in force the determination does not apply to the person to whom notice has been given.

Notifications

In the case of exclusive dealing, resale price maintenance and small business collective bargaining, parties may instead 'notify' the conduct to the ACCC. This prevents the conduct contravening the Act unless the ACCC revokes the notification on competition/public benefit grounds. To revoke notification he ACCC that must be satisfied the conduct does not meet the competition/public benefit criteria.

Guidelines

Exclusive Dealing Notification Guidelines (November 2017)

Resale Price Maintenance Notification Guidelines (November 2017)

Small business collective bargaining guidelines (December 2018)

Legislation

Part VII - Authorisations and notifications

Division 1 - Authorisations

Division 2 - Notification

Sub-Division A - Exclusive dealing

Sub-Division B - Collective bargaining

Sub-Division C - Conferences

Sub-Division D - Register of notifications

Division 3 - Class exemptions

Cases

See cases database

Below are some select examples, but there are a plethora of authorisation and notification decisions: see generally the ACCC’s authorisation and notification register.

Authorisation

Tribunal

Re Medicines Australia Inc [2007] ACompT 4 (27 June 2007)
Imposition of conditions for authorisation. Discretion of ACCC.

Qantas Airways [2004] ACompT 9

Re Queensland Independent Wholesalers Limited (1995) 132 ALR 225; (1995) ATPR 41-439
Merger authorisation case

Re Queensland Co-Op Milling Association Limited and Defiance Holdings Limited (QCMA) (1976) 8 ALR 481; (1976) ATPR 40–012
Merger authorisation case

ACCC

Qantas Airways Limited & Emirates (2023) ➤
Application granted with conditions. Revocation of previous authorisation and substitution of new relating to cooperation on planning, scheduling, sales, marketing etc.

Juno Pharmaceuticals Pty Ltd & Ors (2022) ➤
Application related to proposed settlement of patent dispute. ACCC issued draft determination proposing to deny authorisation and applicants (Juno, Celgene, Natco) subsequently withdrew authorisation application.

Myer Pty Ltd - Revocation & Substitution - A91091 (2008) ➤
"Myer sought ... authorisation to allow Myer to be able to continue to invite concession businesses operating within Myer Stores to participate in storewide and category wide discount promotions, bonus MYER one points offers, Myer Card and Myer Visa Card promotions, a Discount Price Matching Policy and other agreed bonuses."

Tooltechnic Systems (Aust) Pty Ltd - Authorisation - A91433 (2014)
First RPM authorisation