Business Law Section

Draft guidelines on the repeal of subsection 51(3) of the Competition and Consumer Act 2010 (Cth)

The submission to the Australian Competition and Consumer Commission (ACCC) in relation to draft guidelines concerning the repeal of subsection 51(3) of the Competition and Consumer Act 2010 (Cth) (CCA) (Draft Guidelines) was prepared by the Competition and Consumer Committee and the Intellectual Property Committee of the Business Law Section of the Law Council of Australia (Committees). 

The Draft Guidelines provide an opportunity to guide parties involved in the licensing of intellectual property as they seek to ensure their compliance with the full scope of Part IV of the CCA, in particular:

(a) their potential exposure to the cartel provisions;
(b) the operation of the anti-overlap provisions pertaining to exclusive dealing; and
(c) the ACCC’s approach to assessing whether conduct has the purpose, effect or likely effect of substantially lessening competition (competition test).

Upon analysing the Draft Guidelines, the Committees consider that further guidance on the above issues would be extremely helpful. In addition, the Committees consider that some reframing of the current examples provided in the Draft Guidelines, as well as additional examples, would assist businesses greatly in understanding the full implications of the repeal of subsection 51(3). This submission contains detailed comments and examples for the ACCC’s consideration.

The Committees are also of the view that the Draft Guidelines highlight several shortcomings in the law as currently drafted. These principally relate to:

(a) the scope of the existing joint venture defence; and
(b) the prescriptive requirements of the exclusive dealing provisions, which have the effect of limiting parties’ ability to rely on the anti-overlap provisions. As a consequence, for example, certain types of franchise agreements may now be exposed to the cartel provisions, potentially creating significant issues for franchisors operating company-owned businesses.

You can read the full submission below.

 

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