16 Sep 2010

Round-up: Competition and trade practices

by Tim Hemingway

Changes to the laws on consumer protection, unconscionable conduct, and creeping acquisitions all affect the transport and logistics sector.

Following the introduction of criminal penalties for cartel conduct under the Trade Practices Act in the second half of last year, legislators have continued to be busy in the Trade Practices space. Recent changes will impact everyone involved in the transport and logistics sector.

Unfair contracts

Consumer law reforms have introduced a single, national consumer law which brings new provisions dealing with unfair contracts and remedies for breach of certain unfair competition and consumer protection provisions of the Trade Practices Act.These will potentially impact any business which operates using a standard form consumer contract.

Unfair terms in standard form contracts (with unfairness being determined by reference to whether the term causes a significant imbalance in the parties' rights and obligations under the contract) are void. If you are using a standard form consumer contract, you should consider having it reviewed to determine whether or not it contains "unfair terms" and needs to be re-balanced in its drafting. 

Unconscionable conduct

The ACCC now has greater powers to take action for breaches of the unconscionable conduct provisions. Corporations are prohibited from engaging in unconscionable conduct in connection with supply or acquisition of goods or services for a business purpose. The changes aim to develop a new law for small business protection in this area and come in the wake of the recent introduction of civil fines of up to $1.1 million for businesses found to be engaging in unconscionable conduct. These provisions will affect anyone who deals with small business.

The list of factors against which conduct is to be judged potentially broadens the sorts of conduct that may be found to be unconscionable and makes it easier for the ACCC to pursue a case against a business. For example, "systems" may be found to be unconscionable in their operation or design, even if there is no clear instance of the system causing significant loss or harm.

Creeping acquisitions

Creeping acquisitions (being a small-scale acquisitions that, individually, may not substantially lessen competition in a market, but collectively may do so over time) have raised concerns primarily in relation to the independent supermarket sector in Australia. However, they are equally relevant to other industries, including the transport and logistics sector.

The Australian Consumer Law reforms have proposed amendments to section 50 of the Trade Practices Act to re-focus the courts' and the ACCC's analysis of the impact of an acquisition on the local market and on secondary markets, rather than on the broader, primary Australian market in which the relevant business operates.

 

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.