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One of 33 Bills rushed-through: Barnaby Joyce’s “Birdsville amendment” to section 46 of the Trade Practices Act, too vague on “substantial share of a market”

Posted by gmarkets on 4 October, 2007

The introduction of Barnaby Joyce’s “Birdsville amendment” to section 46 of the Trade Practices Act introduced a new threshold concept in relation to predatory pricing — the notion of companies with a “substantial share of a market” reported The Australian Financial Review, (17/9/2007, p. 71)

“Ultimately, the so-called Birdsville amendment may result in higher prices for consumers and some Australian companies competing in their home market with “their hands tied behind their back”, wrote Dave Poddar, partner in the Competition Law Group of Mailesons Stephen Jaques.

Too fuzzy: “There is no meaningful guide to what this means and it has the potential to apply inadvertently to a far broader number of businesses (even small businesses). The new test may apply to market shares as little as 20 per cent. Critically, a market could be as small as a town, a region or even a suburb, as found in one recent case on liquor licensing. It is worth noting that the Australian Competition and Consumer Commission’s only successful predatory pricing prosecution was against a small ferry business at Eurong Beach in Queensland”.

What does this mean in practice? “It means that corporations that have a substantial share of a market may choose not to discount to match low prices of a new entrant. It may also mean an existing Australian company will be prohibited from supplying below cost to match low priced imports

The Australian Financial Review, 17/9/2007, p. 71

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